Markets to get a cautious start on the penultimate day of F&O expiry

The Indian markets witnessed a good short covering rally in last session and snapped their three session’s losing streak, rebounding from their 3-4 months low. There were some good earnings report coupled with strength in rupee that supported the markets in moving higher. Today, the start of the penultimate day of F&O April series expiry is likely to be cautious, however more short covering can be expected in latter trade. Meanwhile, Chief Economic Adviser Arvind Subramanian has said that India is 'a very frustratingly robust democracy' where unleashing “big bang” reforms is not easy given the multiple centres of veto power. There will be some buzz in the infra stocks, as the finance ministry has asked the Reserve Bank of India, public sector banks and other financial institutions to put in place a coordination mechanism to expedite implementation of large infrastructure projects that have been held up so that investment picks up momentum. There will be some somberness in power stocks on a report by the Standing Committee on Energy that India has missed the power generation capacity addition target for the second straight year in last fiscal. According to it, the electricity generation target of 17,830 MW and 17,825 MW for the fiscals 2013-14 and 2014-15, respectively, were not achieved.

The US markets made a mixed closing in last session and while the Dow and S&P ended at fresh highs the Nasdaq ended marginally lower ahead of the Federal Reserve's monetary policy announcement. The Asian markets have made mostly a lower start led by Chinese and Hong Kong markets which are down by around a percent on profit taking, although there were speculation that the Federal Reserve will keep interest rates near zero for longer after weak consumer confidence data.

Back home, snapping their three days losing streak, Indian equity benchmarks ended the session with a gain of over three fourth of a percent with key gauges reclaiming their crucial 8,250 (Nifty) and 27,350 (Sensex) levels as investors opted to buy beaten down but fundamentally strong stocks after three days of continuous drubbing. Markets after a positive start alternately swung between positive and negative zone in noon deals, but hectic buying activity which took place during last leg of trade mainly drove the markets higher, with frontline gauges ending near intraday high levels. Sentiments remained up-beat after World Bank said that India’s economy seems to have turned the corner and outlook has improved significantly, but even then it projected the economy to expand by 7.5 per cent during the current financial year, quite lower than the Budget assumption of 8.5 per cent. Some support came in with report that the foreign direct investment (FDI) in India jumped about 63 percent to $3.28 billion in February, 2015, compared to FDI of $ 2.01 billion in same period last year. Meanwhile, GST Empowered Committee Chairman K M Mani has said that the new indirect tax regime will boost India’s economy and the panel of state finance ministers needs to build a consensus among all states on the contentious matters before April 1, 2016. On the global front, European counters made an awful start, while Asian markets ended mostly in the red. Back home, there was broad based buying witnessed in the markets and apart from the blue chips, the broader markets too participated strongly in the rally. Appreciation in Indian rupee too supported the sentiments. The partially convertible rupee was trading at 63.18 per dollar at the time of equity market closing against the Tuesday’s close of 63.47 on the Interbank Foreign Exchange.  Rally in banking counter too aided the sentiments, led by over 8% surge in ICICI Bank on value buying and in wake of the fact that domestic brokerages upgraded the stock with ‘buy’ rating on expectations of improvement in asset quality going forward. Public sector oil marketing companies too edged higher after global crude oil prices declined. Finally, the BSE Sensex surged by 219.39 points or 0.81% to 27396.38, while the CNX Nifty soared by 71.80 points or 0.87% to 8,285.60.