Markets to get a positive start of the F&O series expiry session

The Indian markets managed a positive close in last session despite paring most of the early gains. Today, the start of the F&O series expiry session is likely to be in green as the Union Cabinet approved changes in the GST Constitutional Amendment Bill providing for full compensation to states for first five years of roll out of the new indirect tax regime, taking it a step closer to reality. Traders will also be getting some support with global rating agency Crisil’s report that India’s GDP growth could rise to 7.9 per cent because of good monsoon so far, with agriculture expected to grow by 4 per cent and consumer price inflation likely to be restricted to 5 per cent in 2016-2017. NITI Aayog Vice Chairman Arvind Panagariya too has said that a good monsoon can help add 'a percentage point' to India's GDP growth in the current fiscal, from 7.6 percent in 2015-16. Markets may see some volatility in the latter half of the trade, as the marketwide F&O rollovers till Wednesday were lower compared with average rollovers during the past three series. There will be some buzz in the stocks related with defence, as the government has approved the abolition of existing guidelines for establishing Joint Venture Companies by Defence Public Sector Undertakings (DPSUs).

There will be lots of scrip specific actions based on the earnings announcements. PNB, Eicher Motors, Dish TV, CEAT, Hexaware Technologies, GSK Pharma, Glaxo, GSFC, HCC, Novartis, Blue Dart and Escorts are among many to announce their numbers.

The US markets once again showed a lackluster trade and ended mixed in last session, after the Federal Reserve announced its widely expected decision to maintain the target range for the federal funds rate at quarter to half a percent. Also, a Commerce Department report showed a much bigger than expected drop in durable goods orders in the month of June. The Asian markets have made mostly a lower start with some indices trading lower by over half a percent, even though Federal Reserve reiterated its gradual approach to raising interest rates, despite acknowledging risks to the economy had abated.

Back home, Indian stock markets went through a disappointing day of trade on Wednesday, as what started on a promising note ended as a dismal show, with investors turning cautious ahead of the US Fed meet outcome later today and expiry of July derivative contracts on Thursday. The US Fed is likely to hold the rate, but the comments will have an influential impact on the liquidity standpoint and for any chance of an increase in the interest rate by Dec-2016. Investors got some confidence after media reports indicated that Japan’s Prime Minister Shinzo Abe has stated that his government would line-up a stimulus package of $265 to boost the struggling economy. On the domestic front, sentiments got some support from reports that Infrastructure spending has picked up in the country and NHAI is executing 205 projects including 18 worth Rs 13,500 crore on hybrid annuity mode. Also, NHAI is looking to bid out 30,000 km of projects in the next 2-3 years, which include several Greenfield expressway projects.  Some support also came with NITI Aayog Vice Chairman Arvind Panagariya’s statement that a good monsoon can help add a percentage point to India’s GDP growth in the current fiscal, from 7.6% in 2015-16. In a big boost for the passage of the key GST Bill, a majority of states on Tuesday backed the government on key issues which have been stalling the Bill. This has raised hopes that with greater numbers backing the bill, it could be taken up in the Rajya Sabha or upper house in the current monsoon session of Parliament. The GST is seen as the biggest ever tax reforms in the country since independence. On the global front, most of the Asian markets ended the session on positive note, while the European stocks and US futures moved higher in early trade. interest rates. Finally, the BSE Sensex gained by 47.81 points or 0.17% to 28024.33, while the CNX Nifty rose by 25.15 points or 0.29% to 8,615.80.