Markets to get a gap-down start on penultimate day of F&O expiry

The Indian markets extended their decline in last session and the benchmarks lost about another half a percent on some weak earnings and developments in Greece. Today, the start of the penultimate day of F&O expiry is likely to be weak on bleak global cues and Nifty may retest its crucial psychological level of 8,300 at the opening trade. Though there will be bouts of volatility too, as traders will be adjusting their position a day ahead of the series expiry. Marketmen might get some support with Chief Economic Advisor (CEA) Arvind Subramanian  pinning hopes on adequate food grain stock helping to keep inflation under control even with below-normal monsoon  and pitching for rate cut by the Reserve Bank in its upcoming policy review to boost growth. CEA has though cautioned that the government needs to reconsider levy of one percent additional tax by states over and above GST rate as it could make intra-state movement of goods expensive and hurt the 'Make in India' campaign. Infra stocks will be in action, as the government has constituted a committee to revitalise the public private partnership (PPP) mode for infrastructure development. There will be lots of result reactions too, to keep the markets buzzing, Tata Motors came out with its March quarter numbers post the market hours on Tuesday, reporting a surprise 56 per cent drop in quarterly net profit to Rs 1,717 crore, while Tech Mahindra posted below the Street estimates net profit of Rs 472 crore.

The US markets suffered sharp sell-off in last session coming of a long weekend, following the release of a batch of largely upbeat US economic data, which led to concerns about the outlook for interest rates. The Asian markets have made a weak start with many of the indices trading down by over a percent in early trade, taking cues from the US markets amidst worries of higher interest rates in the world’s largest economy.

Back home, Tuesday was not a different day from the previous one when the markets lost further ground with benchmarks just slipping off their crucial psychological levels of 8350 (Nifty) and 27550 (Sensex) respectively. Although selling was not intense but across the board profit taking was seen throughout the day amid the caution of the May F&O series expiry on Thursday. Traders remained cautious with Reserve Bank Governor Raghuram Rajan’s statement that growth is slow in picking up even as macro-economic parameters have improved, while stressing the role of state governments in improving fiscal performance. He also said that there was a need to make State Level Coordination Committees (SLCCs) more active and effective. Trade was weighed down by a survey of NCAER which said that business sentiment fell sharply in the March quarter due to concerns over investment climate amid “patchy” and “uneven growth”. The day of trade was also impacted by the weakness in rupee which extending losses for the second straight day, against the dollar came near the 64 mark as the American currency firmed up overseas. Traders were also eyeing the developments in Greece after its government said it intends to make good on its debt obligations but needs aid urgently to be able to do so. On the global front, the European markets after falling in last session fluctuated in early trades, while the Asian markets ended mostly in green. Back home, the markets made a flat start and after slight upmove showed signs of consolidation, however selling in bluechips kept pressurizing the markets and benchmarks gradually started slipping deeper in red. It was in the final moments that some recovery was seen that helped the markets to pare some losses on Chief Economic Adviser Arvind Subramanian’s statement that India's adequate food stocks would help contain inflation, even if summer monsoon rains turn out to be weak. Sectorally, barring banking and to some extent power, none of the gauges showed any resistance till last and ended in red. The broader indices too after fluctuating through the day ended modestly in red. Finally, the BSE Sensex dropped by 112.47 points or 0.41% to 27531.41, while the CNX Nifty declined by 30.90 points or 0.37% to 8,339.35.