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

The Indian markets after a slow start picked up pace and despite some choppiness managed a close of about half a percent in last session. Today, the start of the F&O expiry week is likely to be flat and though the regional peers are trading in green in early deals, traders will be a bit cautious about the probable rate hike in the US by year end. Meanwhile, Finance Minister Arun Jaitley too has said that inflation has been brought under control in the past one year but global economy and agrarian situation as well as domestic investments pose challenge to the Indian economy. Traders will be reacting to some important earnings announcements made during the weekend and those scheduled today. There will be some buzz in the infra sector stocks, as the Union urban development minister M Venkaiah Naidu has said that contours have been worked out for the 100 smart cities project and the flagship programme will be launched any day.

The US markets ended lower in last session, jittered by the Fed chief Janet Yellen’s remarks that Fed will likely raise interest rates this year, as long as economic activity picks up. The Asian markets have made mostly a positive start led by the Japanese market which surged on weaker yen and as exports rose more than forecast in April. Exports rose 8 percent from a year earlier, while Imports slid 4.2 percent.

Back home, Indian equity benchmarks ended the Friday’s trade with a gain of around half a percent with frontline gauges recapturing their crucial 27,950 (Sensex) and 8,450 (Nifty) levels. Sentiments remained buoyed on continued hopes of rate cut by the Reserve Bank at its policy review early next month. Some support came with government’s decision of relaxing FDI norms for NRIs, PIOs and OCI. Government has decided that non-repatriable investments by NRIs, OCIs and PIOs will be treated as domestic investments and will not be subject to foreign direct investment caps. Also, the Reserve Bank of India has trebled the limit on trade-linked remittances to Rs 15 lakh from the earlier Rs 5 lakh. It has also allowed overseas banks to enter into swaps with other overseas banks besides domestic banks to facilitate disbursals of rupee loans by overseas lenders. Bulls also turned boisterous after finance minister highlighted the achievements of the government on completion of first year in the office. Finance Minister claimed that there was more enthusiasm in India after Modi assumed office on May 26, 2014 and that the stability returned to the economy in last one year. On the global front, European shares steadied around the previous session's three-week highs on Friday, while the Asian markets ended mostly in the green. Back home, appreciation in Indian rupee too supported the sentiments. Meanwhile, stocks related to fast moving consumer goods space remained on buyers’ radar on report that the Southwest Monsoon has reportedly further advanced and arrived over Sri Lanka. Additionally, upstream oil companies edged higher after the oil ministry set interim rules that exempt state-run upstream companies from giving any discount on crude and refined fuel sales if global oil prices average up to $60 a barrel this quarter. Finally, the BSE Sensex soared by 148.15 points or 0.53% to 27957.50, while the CNX Nifty gained  37.95 points or 0.45% to 8,458.95.