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

The Indian markets after witnessing choppiness, recovered and ended with modest gains in last session, today the start is likely to be in green, however choppiness will continue on the penultimate session of the F&O series expiry. Also, traders will be bit cautious with World Bank chief economist Kaushik Basu’s statement that the Indian economy is expected to grow at 7 to 7.5 percent in 2016. Until October, the World Bank retained India's growth forecast at 7.5 percent for 2015-16 and expected it to be 7.8 percent in 2016-17 and 7.9 percent in 2017-18. However, there will be some encouragement too, Finance Minister Arun Jaitley has said that a number of sovereign and pension funds, including from Singapore, the United Arab Emirates and Russia, have evinced interest in the National Investment and Infrastructure Fund (NIIF). There will be some buzz in companies related to insurance business, as the Insurance Regulatory and Development Authority of India (Irdai) has said that the existing micro insurance products will continue to be on offer till March 31, 2016. Earlier, it was mandated that all existing micro insurance products that are not in compliance to the IRDAI regulations 2015 shall be withdrawn with effect from January 1, 2016.

The US markets surged in last session, amid easing concerns that a recent interest rate hike from the Federal Reserve will hurt the economy. Although, the trading activity remained relatively subdued, but traders lapped up the report of consumer confidence, which showed rebound of more than expected in December. The Asian markets have made a mixed start with some of the indices trading marginally in red, though the Japanese market has extended the gains on weakness in yen against the dollar, after upbeat consumer confidence and home-price data from US.

Back home, Indian markets despite falling in red for a brief period during noon, followed a broad range and ended with modest gains on Tuesday. Traders though remained cautious in the F&O expiry week but the rebound in Chinese markets, which rose a day after marking their biggest loss in a month, boosted the morale of the local markets. Earlier, the markets made a flat but positive start getting some encouragement with Finance Minister Arun Jaitley’s statement that rolling out the ambitious GST regime is “certainly” doable in 2016 and he is in continuous touch with the Congress party in a bid to persuade them to cooperate. There was buzz in the infra sector from the very beginning, after a government appointed panel recommended an array of measures to revive public private partnership projects (PPP). The eight-member Vijay Kelkar Committee came up with host of recommendations, including a review of the model concession agreements, allowing fund raising through zero coupon bonds and setting up of independent sectoral regulators. It also called for a legal framework for PPPs in the form of PPP Act Law Policy. On the global front, shrugging off the weak cues from the US markets, Asian markets ended mostly in green, while the European markets also made a positive start. Back home, the local markets were dragged in red for some time during noon, with benchmarks paring all their early gains on some profit booking in bluechips like Coal India, HCL Tech, HUL, BHEL, ONGC, BoB, Infosys, TCS and Tata Motors etc,  and on some weakness in rupee, which declined on month-end dollar demand from importers. Major bourses rebounded in the second half supported by positive start of the European markets. Also, there was report that FDI inflows during January-September period increased by 18 per cent to $26.51 billion. The government expects FDI inflows to rise by 40-45 per cent in the New Year while further steps could be on anvil to attract foreign capital. Stocks of liquor companies came under pressure after the Supreme Court upheld the Kerala government’s new excise policy restricting the sale and consumption of liquor at the bars in five star hotels only, thereby restricting other liquor bars from business. The liquor policy restricting the sale and consumption of liquor at the bars was upheld by the Kerala High Court on March 31. Finally, the BSE Sensex gained 45.35 points or 0.17% to 26,079.48, while the CNX Nifty ended up by 3.80 points or 0.05% to 7,928.95.