Markets to make a flat-to-positive start on F&O expiry day

The Indian markets showed signs of recovery in the final hours in last session, but could manage only a flat closing. Today the start of the trade is likely to be in green on the F&O expiry day with Nifty reclaiming its crucial psychological level of 8350, though volatility is expected but some short covering may take the markets higher towards the end. Traders will be getting some support with industry body CII saying that India’s economy can grow at 9-10 percent in the medium-term with a multi-pronged economic strategy. It has outlined ten areas requiring policy attention that can bring huge economic benefits for growth, investment and employment creation. The sugar stocks are likely to remain in action, as the Allahabad High Court has directed Uttar Pradesh government to ensure that sugarcane growers in the state were paid 75 per cent of their dues by July 15 and that legal action was taken against Directors of those sugar mills which failed to pay up in compliance with the order. The power sector stocks too will be buzzing, as Coal and Power Minister Piyush Goyal has said that government is looking at seeding power fund for stressed assets with support from international investors. Fertiliser sector too may see some upmove with Chemicals and Fertilisers minister Ananth Kumar stating that the country will become self-reliant in urea and fertiliser in the next four years.

The US markets bouncing back from their previous session’s sell-off ended higher in last session with the tech-heavy Nasdaq reaching a new record closing high. Sentiments improved with optimistic comments from Greek Prime Minister regarding his nation’s negotiations with creditors. The Asian markets have made mostly a positive start tailing the global gains and led by the Japanese market which was advancing for a 10th day, as the yen traded near an almost eight-year low.

Back home, Indian equity benchmarks ended the choppy day of trade on quiet note as investors remained on sidelines on penultimate day of F&O expiry. Disappointing quarterly results from companies such as Tata Motors and Tech Mahindra dampened the sentiments. Meanwhile, the Indian rupee breached the 64 level to trade at 64.03 per dollar level at the time of equity markets closing. Additionally, cautiousness ahead of GDP data which is scheduled to be released on Friday also weighed on the sentiment. However, markets showed some strength in late trade and pare most of their initial gains with Sensex ending in green with a gain of one tenth of a percent, while Nifty ending slightly in red. Some support came 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. On the global front, European markets made a firm opening, though Asian shares ended mostly lower. Back home, some support came with report that foreign portfolio investors bought shares worth a net Rs 114.81 crore, while domestic institutional investors (DIIs) bought shares worth a net Rs 123.85 crore on May 26, 2015, as per provisional data released by the stock exchanges. Meanwhile, stocks related to banking space remained on buyers’ radar on speculation that the Reserve Bank of India (RBI) is likely to cut its benchmark interest rate by 25 basis points to 7.25 per cent when it meets early next week and make a similar move before December. Additionally, Shares of public sector oil marketing companies (PSU OMCs) advanced on decline in global crude oil prices. Finally, the BSE Sensex gained 33.25 points or 0.12% to 27564.66, while the CNX Nifty lost 4.75 points or 0.06% to 8,334.60.