F&O series expiry day likely to get a soft start

The Indian markets consolidated and ended modestly lower in last session. Today, the start is likely to remain somber on listless global cues and the day can prove to be another session of consolidation. Though, some volatility too cannot be denied with the expiry of January F&O series scheduled today. Traders may get some support with the government fast-tracking reforms; it has also notified stock exchanges that it would sell up to 10% in Coal India. the Cabinet Committee on Economic Affairs (CCEA) will decide the price band for the offer for sale (OFS) of Coal India. There will be some buzz in the telecom stocks, as the Union Cabinet approved a reserve price of Rs 3,705 crore per megahertz (MHz) for the 2100 MHz band for the March 4 auction of the 3G spectrum. Meanwhile, telecom minister Ravi Shankar Prasad has said that the amount of spectrum that is being offered for auctioning is sufficient and that no shortage will result.

The US markets extended their sell-off in the last session, with the Dow falling to its lowest closing level in over a month. The major cause of the fall was sharp drop in crude prices, which fell to its lowest levels in almost six years; traders even ignored the batch of largely upbeat earnings news. The Asian markets have mostly made a soft start and some indices are down by over half a percent with Japanese market retreating from a seven-week high, tailing US market and as oil traded below $45 a barrel.

Back home, Indian equity benchmarks witnessed consolidation on Wednesday as investors opted to book some profits off the table after eight straight sessions of gains ahead of the expiry of January derivative contracts tomorrow. Investors also remained on sidelines ahead of the Reserve Bank of India’s policy review on February 2 and the federal budget on February 28. Earlier, markets hit their record highs in noon deals but profit booking in blue-chips drag benchmarks lower. However, key gauges somehow managed to end the session near their neutral lines as 29,500 and 8,900 proved to be the strong support levels for Sensex and Nifty, respectively. Some support came with Finance Minister Arun Jaitley, ahead of the Budget, underlining the need for tax reforms and quick decision making to ensure stability in policy regime. He has also expressed confidence that the fiscal deficit target of 4.1 percent of the GDP for the current fiscal would be met. On the global front, European markets traded flat in early deals, while the Asian markets ended mixed. Back home, appreciation in Indian rupee supported the sentiments. The partially convertible rupee was trading at 61.37 per dollar at the time of equity market closing against the Tuesday’s close of 61.39 on the Interbank Foreign Exchange. Meanwhile, foreign institutional investors were net buyers in Indian equities worth Rs 953.50 crore on January 27, 2015, as per provisional stock exchange data. Meanwhile, select stocks related to services sector companies edged higher on report that the government is planning to give incentives to the services sector in the upcoming foreign trade policy and Budget in order to enhance the contribution from the sector. Stocks of some of defence manufacturing companies too traded with traction, as a panel has said that India has to raise the foreign direct investment cap in Defence manufacturing to 51 per cent to get US companies to think seriously about investing in the country and share technology. Finally, the BSE Sensex lost 11.86 points or 0.04%, to 29559.18, while the CNX Nifty added 3.80 points or 0.04% to 8,914.30.