Markets to make a cautious start of F&O expiry week

The Indian markets suffered sharp sell-off in last session after the IT bellwether Infosys came with a disappointing set of numbers. Today, the start of the holiday truncated F&O expiry week is likely to be a bit cautious and Nifty may fluctuate at its 8300 levels. Traders will be eyeing the big earnings announcements scheduled during the week for more cues. Marketmen are likely to get some respite with Finance Minister Arun Jaitley’s statement in order to to contain the adverse fall out of MAT levy on foreign investors that the Indian government will set up a high- level committee to sort out the taxations issues of the past and make the system predictable. Also, the long-pending Bill on Goods and Services Tax (GST), that was moved in the Lok Sabha amid stiff resistance by several Opposition parties, would be taken up for consideration and passing today. The exports oriented stocks are likely to remain under pressure, as the Commerce and Industry Minister Nirmala Sitaraman has said that India failed to meet the exports target of $340 billion set for 2014-15 due to economic slowdown in many countries and that these markets are yet to recover from the financial crisis of 2007-08.

The US markets ended higher in last session supported by some good earnings and reports of increase in durable goods orders with major averages finishing the week at all-time highs. The Asian markets have made mostly a positive start, with some indices surging by over a percent, advancing for a fifth day.

Back home, Friday's trading session turned out to be a daunting one for stock markets in India and benchmarks ended below their crucial 27,500 (Sensex) and 8,350 (Nifty) levels with a cut of over a percentage points. Sentiments remained down-beat since beginning of the trade on report that foreign institutional investors were net sellers in equities to the tune of Rs 277 crore on Thursday, as per provisional stock exchange data. Sentiments also remained dampened after Infosys reported lower-than-expected Q4 numbers. The IT bellwether reported a net profit of Rs 3,097 crore and revenue of Rs 13,411 crore, while dollar revenue came in lower-than-expected down 2.7% at $2,159 for the March quarter. Sentiments also got weighed down after global rating agency Moody’s said that a growth rate of more than 7.5 percent may not be sustainable for India in the present scenario and the country needs to resolve tax issues that are impacting its investment climate. Meanwhile, foreign traders remained watchful despite minister of state for finance Jayant Sinha’s efforts to clear doubts on the Minimum Alternate Tax (MAT) on foreign funds. Investors are worried, even though the minister stated that funds invested through Mauritius and Singapore-countries with which India has treaty for tax exemption on capital gains-will be untouched. On the global front, European markets made a firm start, however, Asian markets ended the Friday’s trade mixed. Back home, depreciation in Indian rupee too dampened the sentiments. Selling in software and technology counters too dampened the sentiments after IT bellwether, Infosys reported disappointing set of Q4 numbers. Finally, the BSE Sensex declined by 297.08 points or 1.07% to 27,437.94, while the CNX Nifty lost 93.05 points or 1.11% to 8,305.25.