Markets to get a soft start of the F&O series expiry week on feeble global cues

The Indian markets suffered sharp profit taking in last session, today the start of the F&O series expiry week is likely to be in red tailing the weakness in the global markets and the metal and commodity stocks are likely to remain most impacted. There will be some cautiousness in the markets and traders will be reacting to the Supreme Court-appointed special investigation team's proposal to tighten rules on participatory notes. The recommendations were released after trading hours on Friday and have urged Sebi to ensure that it is able to track the actual beneficiary of the P-Note investments. Meanwhile, the government has said that it will soon take a decision on the Justice AP Shah Committee report on applicability of minimum alternate tax (MAT) on foreign investors. Markets, mood is likely to be volatile but there will be some support with a report that Foreign Portfolio Investors (FPIs) have pumped in over Rs 8,400 crore in the Indian capital markets so far this month. There will be some buzz in the steel stocks, as it has been reported that Steel Ministry approved as many as 83 R&D projects worth Rs 696.27 crore in 2014-15 as it aims to expand the industry's product portfolio. Traders will also be reacting to some high profile earnings announced during the weekend and to be announced today. Reliance reported just over 4% growth in its Q1 profit, while Bharat Electronics reported over two fold jump in its net profit.

The US markets slumped in last session, with Dow pulling back toward the five-month lows set earlier this month. The declines were contributed by a report showing new home sales unexpectedly fell to their lowest level in seven months in June.  The Asian markets have made mostly a lower start and some of the indices are trading lower by around a percent, reacting to a report that Chinese industrial company profits declined 0.3 percent in June from a year earlier.

Back home, Friday turned out to be a disappointing session for the Indian equity indices which got pounded by around a percentage point as investors sold stocks across sectors amid weakness among the global peers coupled with disappointing Q1 earning. After a negative opening, the domestic bourses never looked in recovery mood and ended the trade near intraday lows, breaching their crucial support levels of 28,200 (Sensex) and 8,550 (Nifty). Selling was both brutal and wide-based as, barring FMGC and Consumer Durables; none of sectoral indices on BSE could manage a green close. Counters which featured in the list of worst performers included capital goods, realty and metal. Sentiments remained down-beat since beginning with report that India’s southwest monsoon has been 26% below normal so far in July. India Meteorological Department (IMD) said the shortfall in rains during the week ended July 8 was 50%, while the deficit was 12% for the July 16-22 week. Lack of any progress in reforms such as GST in the present Monsoon session of Parliament too dampened the sentiments. Sentiments also remained dampened after a private poll report stated that India's economic prospects have dimmed since April due to the government's inability to pass much-needed reforms. Growth forecasts too were nudged down from April owing to concerns the government still faces substantial challenges in kick-starting a reform-driven growth cycle. On the global front, European counters, after making cautious start, while Asian markets stumbled. Back home, depreciation in Indian rupee too dampened the sentiments. Disappointing quarterly earnings from some blue-chip companies too weighed on the sentiments. GAIL reported a 32% slump in net profit for the quarter ended June 2015 on lower production and price realization. Lupin reported a 16 per cent year-on-year drop in its consolidated net profit for the quarter ended June. Finally, the BSE Sensex plunged by 258.53 points or 0.91% to 28112.31, while the CNX Nifty declined by 68.25 points or 0.79% to 8521.55.