Markets to make a cautious start of the new month and series

Indian markets turned turtle on the F&O expiry session and despite expectations of some short covering ended with sharp cuts of around a percent. Today, the start of the new month and new F&O contract is likely to be a bit cautious, though some bounce back can be expected in the latter part of the trade. Traders will be eyeing the HSBC India Manufacturing PMI, slated to be announced today for more cues about the economy. The auto stocks will be in action with the release of monthly sales data for April.  However, some concern will continue weighing on investors’ mind, as the Bombay High Court will reportedly hear a writ petition filed by five foreign portfolio investors (FPIs) against the income-tax department on Wednesday regarding the payment of minimum alternate tax (MAT).  The PSU OMC companies will be in action after they went for steep hike during the weekend in petrol by Rs 3.96 per litre and diesel by Rs 2.37 a litre, tracking global cues. The fertilizer stocks too will keep buzzing, as the Fertiliser Ministry has moved a Cabinet note on formulating a new urea policy that aims at higher domestic production of the soil nutrient and balanced use of fertilisers.

The US markets ended with good gains in last session despite mixed set of economic data. While, the manufacturing in April held at the weakest pace in almost two year, the consumer confidence increased in April to the second-highest level in more than eight years. The Asian markets have made a mixed start ahead of the report on Chinese manufacturing, which is expected to signal contraction for a second month in April.

Back home, Indian equity markets truly depicted the choppiness of F&O expiry session on Thursday with key gauges ending the session with a cut of around three fourth of a percent. After a cautious start, markets traded range-bound throughout the session and ended the session below their crucial 27,100 (Sensex) and 8,200 (Nifty) levels. Traders still remain concerned about capital outflows by foreign investors on MAT and lower-than-expected Q4 earnings posted by some blue-chip companies. It was reported that finance ministry will likely to bring in clarity on application of minimum alternate tax on other income streams for foreign investors including interest on bond, private equity and foreign direct investments (FDI), in the Finance Bill, 2015 when it comes up for discussion in the Finance Bill, 2015 when it comes up for discussion. Sentiments remained dampened on report that foreign portfolio investors sold shares worth a net Rs 718.31 crore on April 29, 2015, as per provisional data. Moreover, investors failed to draw any sense of relief from report that FDI inflows in the manufacturing sector rose by almost 45% from the period of October, 2014 - February, 2015 at $6,916.99 million compared to $ 4,770.94 million in the same period in the previous financial year. Global cues too remained sluggish on lower-than-expected growth in the US economy. European counters made a soft start, while the Asian markets ended mostly in the red. Back home, depreciation in Indian rupee against dollar weighed down sentiments. Selling in software and technology stocks too dampened the sentiments on weak economic data in US, the biggest outsourcing market for the Indian IT firms. Finally, the BSE Sensex plunged by 214.62 points or 0.79% to 27011.31, while the CNX Nifty declined by 58.25 points or 0.71% to 8,181.50. Indian markets remained closed on Friday on account of a local holiday.