F&O series expiry session to start on a soft note

The Indian markets slumped in last session on some disappointing earnings. Today, the start of the F&O expiry session is likely to be in red on weak regional cues, but lots of volatility can be seen going further and some upmoves too can be expected as traders will be adjusting and rolling over their positions. Traders will be getting some support with Finance Minister Arun Jaitley’s statement after India jumped 12 positions to rank 130th in the world on ease of doing business, that the improvement in ranking does not fully reflect the reforms initiated and the position will improve further next year. The infra stocks will be in action, as the National Highways Authority of India (NHAI) has decided to carry out detailed risk assessment of each stretch for which the tenders would be floated. Government has set up a target to push the award of highway projects to 12,000 km annually for the next four to five years from 8000 km at present. The fertilizers stocks too will keep buzzing, as it has been reported that India’s urea production is estimated to increase by more than 6 percent to 240 lakh tonnes in this fiscal on the back of new policy initiatives.

There will be lots of earnings announcements too, to keep the markets in action. From among the majors Nestle India, Dr Reddy's Labs, NTPC, Grasim Industries and Bharat Forge are going to report their September quarter earnings today.

The US markets rallied in last session with all the major indices surging by over a percent, lifting the Dow to a three-month closing high, after the Fed left interest rates unchanged as expected and reiterated its assessment that economic activity has been expanding at a moderate pace. The Asian markets though have made a soft start, with Fed outlook bolstering prospects for a December interest-rate increase.

Back home, extending their southward journey for third day in a row, Indian equity benchmarks ended Wednesday’s trade in the red on back of sustained selling by fund and retails investors ahead of a policy statement from the US Federal Reserve later in the day today. Besides, caution ahead of expiry of October month contracts in the derivatives segment tomorrow also influenced the trading sentiment. After a gap-down opening, markets traded sluggish throughout the session. The indices even went on to test important psychological 27,000 (Sensex) and 8,150 (Nifty) levels, however markets witnessed modest bounce back at those levels in the final moments on some reports that government is mulling hiking foreign direct investment (FDI) cap in public sector banks to 49% from the present 20%, it was also reported that government may consider raising FDI cap in media too. Traders even overlooked the development of government setting up a high-level committee under a former Delhi High Court judge to suggest simplification of Income Tax laws, a report that could form basis for tinkering with the controversial retrospective applicability of tax. Traders also failed to get any sense of relief from World Bank’s report that India now ranks 130 out of 189 countries in the ease of doing business, moving up 12 places from last year. On the global front, European counters were trading mostly in green in early deals, however, Asian markets ended in red. Back home, depreciation in Indian rupee too dampened the sentiments. Selling in banking counters mainly played spoil sport for Indian equity markets. Private lenders came under sharp selling pressure, tracking the selloff in Axis Bank shares, slumping nearly 7.5 per cent on concerns over its asset quality. Shares related to oil exploration and production space too edged lower on slide in global crude oil prices. On the flip side, the jewellary stocks remained in jubilant mood after a report that India regained its top position from China as the biggest overall consumer of gold in the first nine months this year with a total consumption of 642 tonnes. Finally, the BSE Sensex plunged by 213.68 points or 0.78% to 27039.76, while the CNX Nifty declined by 61.70 points or 0.75% to 8171.20.