Markets to make a positive start of the F&O expiry week

The Indian markets extending their upmove surged in last session, today the start of the truncated F&O expiry week is likely to be good taking cues from the global markets with bourses moving further high. There will be some support from a private survey which has stated that India remains one of the most preferred investment destinations for global investors while domestic companies expect stable economic conditions in the near term. Though, traders will be reacting to the Finance Ministry’s Mid-Year Economic Analysis that has stated meeting the 4.1 per cent fiscal deficit target for 2014-15 a "major challenge." There will be another concern from a report that Foreign Direct Investment (FDI) in the country’s services sector, which contributes about 60 per cent to India’s GDP, fell 7.5 per cent to $1.22 billion during the first half of the current fiscal. There will be some buzz in the power sector, as the government has proposed imposing up to Rs 1 crore fine on entities violating norms under the Electricity Act in order to make penal provisions more stringent in the power sector. The PSU banking stocks too will be in action, as the Finance Ministry has asked all public sector banks to submit capital raising plans following the Cabinet approval to reduction in government's stake in state-run lenders to 52 percent.

The US markets moved higher in last session, though the gains were modest but traders continued drawing comfort with Fed’s reassurance of methodical rate increases. The Asian markets have mostly made a positive start supported by gain in commodity stocks amid a rally in crude oil.

Back home, extending their previous session’s jubilation, Indian equity benchmarks ended the Friday’s trade with a gain of around one percent with frontline gauges ending above their crucial 27,300 (Sensex) and 8,200 (Nifty) bastions. Markets after a firm start traded with traction throughout the session as the US Fed’s dovish stance on hiking interest rates in short-term spurred the market momentum across the globe. Also, the Cabinet approval for Goods and Services Tax (GST) buoyed the sentiment, prompting investors to go for short-covering ahead of the expiry next week. Some comfort also came with international credit rating agency Crisil saying that the Indian economy is well prepared to deal with any eventuality arising out of spike in the interest rates by the US Federal reserve. Also, there are reports that Prime Minister Narendra Modi has taken direct control of a project-monitoring body to fast-track investments worth almost $300 billion and revive manufacturing in the country. Global cues too remained supportive with European counters making a firm start, while most of the Asian markets ended the session in the green terrain led by Japanese market. Back home, there was broad based buying witnessed in the markets and apart from the blue chips, the broader markets too equally participated in the rally. Even though the foreign institutional investors (FIIs) have been sellers during the last few sessions, domestic institutional investors (DIIs) swiftly turned buyers picking up the opportunity to buy cheap. Meanwhile, rally in software and technology counters too aided the sentiments and stocks like Infosys, TCS and Wipro gained after encouraging first quarter earnings and revenue growth guidance from global IT major Accenture. Coal and power stocks too remained on buyers’ radar with the government coming out with draft rules for e-auction of 101 cancelled coal mines in the first phase and fixing a floor price of Rs 150 per tonne for sectors like steel, sponge iron, cement and captive power. Finally, the BSE Sensex surged by 245.27 points or 0.90%, to 27371.84, while the CNX Nifty soared by 65.90 points or 0.81% to 8,225.20.