Markets to make a cautious start of the F&O expiry session

The Indian markets had ended marginally in red before going for a day of break. Today, the start of the F&O expiry session is likely to be cautious but mildly in green, traders will be eyeing the winter session of Parliament, which begins today after Prime Minister Narendra Modi striking a conciliatory note at an all-party meeting when he called for a collective effort to make the two Houses function smoothly and ensure passage of important legislations, including the goods and services tax bill. However, there will be some cautiousness too, as the global rating agency Moody’s Investors Service has cautioned that a loss of momentum on reforms may hamper investment and prove to be a 'downside factor' for Indian companies, even as it said most corporates will benefit from strong economic fundamentals and accommodative monetary policy. There will be some buzz in the oil & gas sector, as the Petroleum Ministry is talking to the Finance Ministry on reducing the cess that the industry has been seeking since the steep fall in crude prices beginning June 2014. Metals and mining stocks too will be in action, on report that the new national mineral exploration policy will be ready by January which will seek to tap the private sector, as in the years to come, mining is expected to be a key industry, attracting huge investments.

The US markets made a flat closing in last session, despite some good economic data, as the traders remained on sidelines ahead of the Thanksgiving holiday. The Asian markets have made mostly a positive start with some indices rallying, led by surge in the industrial metal stocks and with recovery in global oil prices.

Back home, Indian equity benchmarks ended the choppy day of trade with modest cut on Tuesday, as investors remained on sidelines ahead of expiry of November derivative contracts on Thursday. Markets will remain shut tomorrow on account of Gurunanak Jayanti. The cautiousness was also ahead of the start of winter session of Parliament on Thursday, which sets the agenda of the government. NDA's recent reverses in Bihar elections have put a cloud over the pace of reforms, and market participants fear that it won't be smooth sailing in Parliament. Moreover, traders will also eye on development on GST after Parliamentary Affairs Minister Venkaiah Naidu said that the government is reaching out to the Opposition to bring it on board to ensure passage of the Constitution Amendment Bill for GST. A key panel on goods and services tax is likely to recommend a revenue-neutral rate of about 18 per cent. The group, headed by Chief Economic Adviser Arvind Subramanian, has zeroed in on the rate after considering various scenarios, brightening the chances for this important reform as the low rate should be acceptable to everyone. Meanwhile, Minister of State for Finance Jayant Sinha has said that the high-powered committee to suggest revenue neutral GST rate will submit its report in the first week of December.On the global front, European counters made weak start, however, Asian counters ended mostly in green. Back home, appreciation in rupee helped benchmarks to limit downfall. Buying in Oil & Gas counters provided some support to the markets after the report that Qatar has agreed to waive USD 1 billion penalty on India for breaking a long-term LNG contract, and has also consented to change the pricing formula. Metal stocks too remained on buyers’ radar after Finance Minister Arun Jaitley’s statement that government is considering “proactive steps” to improve the health of steel and aluminium sectors which are reeling under the impact of decline in global prices. Finally, the BSE Sensex declined by 43.60 points or 0.17% to 25775.74, while the CNX Nifty lost 17.65 points or 0.22% to 7831.60. The Indian markets remained closed on Wednesday on account of a public holiday.