Markets likely to get a stable start on the F&O expiry day

The Indian markets witnessed a tumultuous day of trade on Wednesday and the benchmarks lost their momentum after S&P revised India’s Sovereign outlook to negative, though it reaffirmed the ratings but traders fearing further exodus of foreign investors, opted to book profit. Today is the April F&O series expiry and volatility is likely to creep in the latter part of the day, however the start is likely to be stable and the tailing the good global cues the markets may get a positive opening. There is likely jitters in many companies who have got a outlook downgrade by S&P, State Bank of India, ICICI Bank, HDFC, NTPC, SAIL, TCS, Infosys, Wipro and IIFCL are among the major one. The power sector is likely to keep buzzing as ministry of environment and forests has said that promoters of a thermal power plant will have to wait till the linked mine gets a stage 1 forest clearance. Meanwhile, the OMCs are again likely to come under pressure as it has been reported that the UPA government wrangled in coalition politics has assured one of its allies that deregulation of diesel prices would not be carried out soon.

There will be lots of important result announcements to keep the markets buzzing. Bata India, Biocon, Gujarat Gas, Idea Cellular, MRF, Sterlite Technologies, Tamilnadu Petro and L&T Finance Holdings are among the many to announce their numbers today.

The US markets surged on Wednesday with Nasdaq posting its best gain of the year backed by massive post-earnings rally in Apple. The market sentiments were boosted after Federal Reserve Chairman Ben Bernanke said the Fed stands ready to act if further economic help is needed. The Asian markets have once again made a mixed start however some indices in the region have gained traction, South Korean market was trading up as data showed country’s economy grew at the fastest pace in a year.

Back home, stock markets in India went through a turbulent day of trade on Wednesday as the frontline equity indices settled on a negative note with cuts of around three fourth of a percent. After showing signs of consolidation for most part of the morning trades, despite the over seven percent collapse in IT bellwether Wipro post its disappointing quarterly earnings numbers, the markets took a turn for the worse in late morning trades. The frontline equity indices suffered a sharp kneejerk reaction and plummeted over a percentage points to touch the lowest point in the day and looked set to breach the psychological 17,000 (Sensex) and 5,150 (Nifty) levels. The wave of selling pressure hit the shores of domestic markets after global credit rating agency S&P threatened to downgrade the sovereign bond rating of India and revised its economic outlook to negative from stable, citing slow progress on its fiscal situation, as well as deteriorating economic indicators. Sentiments went awry after the reports surfaced as investors took to across the board position squaring as the lowered outlook jeopardizes India's long-term rating of BBB-, which is the lowest investment grade rating. However, the markets soon recovered after finance ministry officials reacted to the reports saying that the rating outlook change was not unanticipated and the revision will not impact capital inflows and India continues to remain an attractive investment destination. Market participants chose to play it safe and added positions in the defensive counters like FMCG and Healthcare, which prevented the downside for local markets while the rate sensitive Automobile index too did its bit by settling with marginal gains.  However, the IT pocket remained one of the top laggards in the space with around one and half a percent cut after industry heavyweight Wipro announced quarterly earnings, which disappointed Dalal Street. The PSU and high beta Realty counters too got pounded over a percent and pressured the frontline gauges. Meanwhile sugar stocks like Shree Renuka Sugars and Balrampur Chini went home with strong gains amid reports that the EGoM is scheduled to meet later in the day to discuss allowing further exports of sugar. Finally, the BSE Sensex lost 56.00 points or 0.33% to settle at 17,151.29, while the S&P CNX Nifty declined by 20.65 points or 0.40% to close at 5,202.00.