Markets to extend the gains with a positive start on F&O expiry day

The Indian markets moved higher in last session despite a volatile day of trade on some good earnings announcements and recovery in other global markets. Today, the start of the F&O July series expiry session is likely to be in green tailing cues from the regional peers after Fed left interest rates unchanged, though the Fed has kept traders guessing on the precise timing for policy tightening. Traders will be getting some support with a statement of World Bank official that India has the potential to become a multi-trillion dollar economy with a per capita income of about $40,000 by 2050 if it manages to grow at seven percent annually for the next 30-35 years. Also, as the Union Cabinet has approved amendments as proposed by Rajya Sabha Select Panel on GST Constitution Amendment Bill. There will be some buzz in the infra stocks, as the Union Cabinet approved creation of a Rs 20,000-crore National Investment and Infrastructure Fund (NIIF), a sort of sovereign fund, for development of infrastructure projects, including the stalled ones. The fund could also consider funding nationally important projects in the manufacturing sector. There will be lots of result related reaction based on the earnings announcements of some major companies.

The US markets extended their gains in last session after Federal Reserve announced its much awaited monetary policy, leaving the interest rates unchanged, though it reiterated economic activity has been expanding moderately. The Asian markets have made mostly a positive start, led by Japanese shares amid better-than-estimated company earnings.

Back home, snapping four days losing streak, Indian equity benchmarks ended the Wednesday’s trade with a gain of around half a percent as investors opted to buy beaten down but fundamentally strong stocks. Domestic gauges traded with volatility but in green throughout the session and ended the session near their intraday highs, recapturing their crucial 8,350 (Nifty) and 27,550 (Sensex) bastion. Some support came with Lok Sabha Speaker Sumitra Mahajan convening an all-party meeting amid continuous disruptions by opposition members, to discuss better functioning of the Lok Sabha, proceedings of which have been virtually washed out in the Monsoon Session so far. However, gains remained capped as participants remained cautious ahead of the expiry of July derivative contracts tomorrow and the outcome of the two-day US Federal Reserve policy meet late Wednesday. Traders also remained concerned with Reserve Bank India (RBI) Governor Raghuram Rajan’s statement that lack of good economists is impacting policy-making in the country. Meanwhile, the union Cabinet is likely to approve a new Consumer Protection Bill 2015 that seeks to replace the existing law and proposes setting up a regulatory authority to curb unfair trade practices. Meanwhile, foreign institutional investors sold equities worth Rs 1,376 crore on Tuesday. Positive opening in European counters supported the sentiments, while the Asian markets exhibited mixed trend. Back home, buying in metal pack too aided the sentiments after commodity prices firmed up on rebound in the China shares. Finally, the BSE Sensex surged by 104.20 points or 0.38% to 27563.43, while the CNX Nifty gained 38.05 points or 0.46% to 8375.05.