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

The Indian markets losing their strength in final hours declined by about a quarter percent in last session. Today, the start of the penultimate session of the F&O expiry is likely to be cautious on weak regional cues, however the trade is likely to turn volatile as the trade progress. Marketmen will be getting some support with Finance Minister Arun Jaitley’s statement that the government is confident of meeting the April 2017 target to implement the Goods and Services Tax as state finance ministers cooperate to make the single tax reform a reality soon. Also, as per latest edition of the Global Competitiveness Index of World Economic Forum (WEF) India has become the second most competitive BRICS economy and will grow faster than China this year. The report showed India’s competitiveness improved the fastest in 2015-16, jumping 16 places to rank 39th among 138 countries on the index. Meanwhile, the tax department came up with two more draft rules and their formats on GST returns and refunds requiring assessees to file monthly returns and specifying procedure for claiming refunds of taxes, interest and fees. There will be some buzz in infra sector stocks, as the Finance Minister Arun Jaitley has said that the deficit in the infrastructure sector was still 'very large' and stressed the need for investment to pick up in the sector. The oil marketing companies will be in action on sharp plunge in crude oil prices.

The US markets made a smart recovery and major bourses moved notably higher ion last session after getting report from the Conference Board, showing an unexpected improvement in US consumer confidence in the month of September. The Asian markets have made mostly a lower start led by the Japanese market which is down by over a percent as the oil slumped and hopes increased of a rate hike after the good economic data from US.

Back home, Indian benchmarks witnessed yet another volatile day of trade ahead of the September F&O expiry scheduled on Thursday. The optimism in domestic markets petered out completely by the end of trade and the benchmarks even drifted in to the negative territory to complete a hat-trick of negative close despite getting off to a positive opening. Sentiments remained subdued with WTO estimates showing that world trade will grow more slowly than expected in 2016, expanding by just 1.7%, well below the April forecast of 2.8%. The forecast for 2017 has also been revised, with trade now expected to grow between 1.8% and 3.1%, down from 3.6% previously. Besides, uncertainty about the US election outcome has made global markets risk-averse. Investors from domestic markets are also looking ahead to the Reserve Bank of India's rate-setting meeting on October 4, amidst the backdrop of declining retail inflation. However, investors got some comfort with statement of Ravindra Dholakia, one of the three government appointees to the newly formed Monetary Policy Committee (MPC) that there will be no tug of war in the MPC. Some support also came with the report that the government is working on a bouquet of reforms to play to the country's core strengths of technology, leisure travel and medical tourism.  The commerce department has circulated a cabinet note on domestic reforms to enhance earnings from services exports, detailing measures that can be implemented after due deliberations. Meanwhile, buying was observed in selected oil & gas counters on Moody's Investors Service’s report that  India's petroleum consumption will grow at 6 percent in 2017-18, double the rate at which fuel demand in China is projected to grow. On the other hand, telecom stocks like Bharti Airtel, Idea Cellular and MTNL came under selling pressure after telecom regulator TRAI said it will slap show cause notices on operators for call drops that are far exceeding the norm. Finally, the BSE Sensex declined by 70.58 points or 0.25% to 28223.70, while the CNX Nifty dropped 16.65 points or 0.19% to 8,706.40.