Markets to start on a cautious but positive note on F&O expiry day

The Indian markets after a volatile trade managed a flat close with positive bias in last session. Today, the expiry session of the January F&O series is likely to be cautious and volatile movement can be witnessed throughout the day, as the traders will be settling their positions and rolling over to next series. Though, the trade may remain somber in early deals on some disappointing earnings number from some bluechip companies, but tailing the positive regional cues the mood may recover in latter trade. The infrastructure companies will remain in limelight, as the government has approved the hybrid annuity model for building national highways, paving the way for construction of 28 projects worth Rs. 36,000 crore this fiscal year. Also, the names of first 20 cities to be developed as Smart Cities will be announced by the government today. The telecom stocks too will be in action, as the Trai has recommended a mega auction of mobile airwaves - the biggest-ever so far- to tackle deficient consumer services and unlock revenues from the scarce national resource. A record windfall of nearly Rs 5.5 lakh crore could flow into the coffers of the government with the mega auction of mobile airwaves. The oil stocks too will be buzzing, as the World Bank has slashed its forecast for crude oil prices for 2016 but said India's growth story remains strong and robust.

The US markets ended lower in last session, weighed down by Federal Reserve's monetary policy announcement, as it talked about gradual rate increases but did not completely rule out a rate hike at its next meeting in March. The Asian markets have made mostly a positive start, overlooking weak US market leads. Japanese market has recovered from the early decline ahead of the Bank of Japan’s meeting starting today.

Back home, Indian stock markets prolonging the lull for second straight day finished the session on a dull note, marginally above the neutral line as investors at large remained reluctant to build on long positions ahead of the expiry of January derivative contracts tomorrow and the US Federal Reserve meet outcome later today. Sentiments got some support  with Standard & Poor's Rating Services’ statement that Indian economy is less vulnerable to external shocks as it is mainly driven by household consumption and government spending, and not dependent on hot money which can move out quickly. Some support also came with the report that business sentiment among Indian companies rose for the first time in three months in January, largely supported by the first increase in new orders since last June. MNI India Business Sentiment Indicator, a gauge of current sentiment among BSE-listed companies, rose from 60.7 in December to 61.8 in January -- the highest since October 2015, as domestic orders strengthened. However, gains remained capped with the report that manufacturing activity in the country dipped to a one-year low in January, suggesting moderation in growth.  The yearly SBI Composite Index fell below the 50 mark to 47.3 in January -- its lowest level in the past one year. Market participants also remained cautious with the buzz that the government has to make some big bang announcements in the forthcoming Budget to resurrect investment in the public projects, or else the Indian economy can soon catch up the Chinese flu with serious consequences. On the global front, Asian markets barring China, closed higher, however, European equity markets suffered losses in early deals. Back home, after getting good start, Indian benchmarks slipped into negative territory on account of selling in frontline stocks and absence of positive triggers ahead of the expiry of January derivatives contracts on Thursday. Thereafter, the frontline indices traded near neutral line, altering between positive and negative territory, though some buying was witnessed in noon trade, but by the end of session the gains vaporized. Finally, the BSE Sensex gained 6.44 points or 0.03% to 24492.39, while the CNX Nifty ended up by 1.60 points or 0.02% to 7,437.75.