F&O expiry session to see a flat but positive start

The Indian markets despite choppiness posted modest gains in last session, though some pockets witnessed profit booking but gains in metal and realty helped the markets to end in green. Today, the start of the F&O expiry session is likely to be in green though volatility is expected to be seen as the trade progress. Traders will be getting some support from a report of global credit rating agency Moody’s, stating that Inflows of foreign direct investment (FDI) into India have increased significantly in the current fiscal and the trend will continue in the coming quarters on account the country's pro-growth policy agenda. The rating agency has further said that the sovereign outlook for the country remains stable at Baa3, but future rating trends depend on the reform measures taken by the government. Meanwhile, India has objected to the World Bank ranking the country at a poor 134th on the ease of doing business index saying study of two urban centres cannot be a representative of a vast country. There will be some buzz in India Inc and the PSU banking stocks on report that the finance ministry has revived a proposal to set up a holding company for state-run banks that will find it easier than individual lenders to raise capital and deploy it in banks that need it the most. There will be some action in power and steel stocks too, as the government is likely to auction 49 coal blocks to private companies in the pilot round of bidding, of which 24 are expected to be reserved for steel firms and 17 for the power sector.

The US markets ended flat with a positive bias in last session as the trade remained lackluster throughout the day; however the Dow and the S&P 500 surged to new record closing highs, while the Nasdaq reached its best levels since 2000. The Asian markets have made a mixed start with some of the indices showing negative trend as Japanese shares retreated on a stronger yen and a drop in oil weighed on energy companies.

Back home, Indian markets after witnessing correction in last session remained in consolidation mood on Wednesday, a day ahead of the F&O series expiry. However the volatility increased owing the ensuing expiry and the major bourses remained in red for most part of the day with bouts of short covering and value buying taking the markets in green terrain. Meanwhile, the start was on a sluggish note tailing the mixed global cues and concern of weak GDP numbers, after ratings agency Icra in its latest report said that the Indian economic growth may have slowed to 5 per cent in the July-September quarter due to a low kharif harvest, a slowdown in exports and muted government spending. Traders also remained concerned with the weakness in rupee, which after a positive start turned lower. The global cues remained mixed and some of the major indices in the Asia Pacific region ended lower. The European markets advanced for a fourth day, led by Germany’s DAX Index, which was heading for its 10th straight day of gains, the longest winning streak since May 2013. Back home, markets bounced back in second half supported by surge in the realty sector, though the gains remained modest most of the sectoral indices on the BSE managed a positive close. The Centre hiked the floor area ratio (FAR) norms in the central Capital Delhi, in order to give a boost to the vertical development of real estate. FAR in respect of plots of 750-1000 sq m size has been enhanced from the current 150 per cent to 200 per cent, while the same has been increased from 120 per cent to 200 per cent for plots of 1000 sq m and above. However, profit-taking by funds and retail investors ahead of November month F&O contract expiry tomorrow was visible in the market. Some selling was witnessed in companies having business interest in Nigeria, after country’s central bank devalued the nation’s currency by 8% and raised interest rates sharply. Bajaj Auto and Bharti Airtel were down by 1-3%. Nigeria is a major export market for Bajaj Auto, accounting for nearly 35 percent of its revenues. Bharti Airtel too is having considerable business in Nigeria and it is its biggest market in Africa, falling currencies would impact margins of these companies. On the other hand the gas stocks despite giving up some of their profit, posted good gains for the day, after the Appellate Tribunal for Electricity (APTEL) gave its verdict in favour of Gujarat State Petronet Limited (GSPL) against the Petroleum and Natural Gas Regulatory Board (PNGRB). Finally, the BSE Sensex gained 48.14 points or 0.17%, to 28386.19, while the CNX Nifty added 12.65 points or 0.15% 8,475.75.