Markets to get a positive start on penultimate session of F&O expiry

The Indian markets finally broke their jinx and added some strength in last session, even though sentiments remained cautious amid renewed capital outflows on growing concerns of demonetization and its aftermath. Today, the start of the penultimate session of the November F&O series expiry is likely to be in green with markets extending the gains on positive global cues. Traders will be getting some support with Finance Minister Arun Jaitley’s statement that banks are integrating their information technology system with RBI and GST Network as they prepare to handle tax deposits under the new indirect tax regime. However, there will be some cautiousness too with no work in parliament and Lok Sabha getting adjourned again after opposition uproar over demonetization. Meanwhile Fitch Ratings has said that the demonetisation of old Rs. 500, 1,000 notes will raise revenue for the government but warned that the positive effects of the move are unlikely to be strong and long-lasting to support credit profiles. The banking stocks will remain in focus as the Fitch re-affirmed its “negative” outlook for India’s banking sector, saying the financial standing remained “fragile” without bigger capital injections and that the government`s action on banknotes could end up having a mixed impact.

The US markets extended their surge in last session and ended at fresh highs, with traders seen optimistic about the outlook for the economy under Trump, leading traders to move money into stocks and out of assets such as bonds. The Asian markets have made mostly a positive start tracking US gains and led by mining companies, amid bets the Federal Reserve is almost certain to boost interest rates next month with minutes of the Fed’s November meeting to be released on Wednesday.

Back home, a session after displaying a depressing performance, Indian benchmark indices pulled through a scintillating performance by vivaciously rallying over half a percent on Tuesday, thanks to the hefty short covering in the recently beaten down frontline counters ahead of monthly expiry of derivative contract on Thursday. The frontline indices took the quantum leap and halted the three successive session southbound journey. Except for some mild profit taking in early afternoon trades, Tuesday’s session remained a day of recovery as key indices enthusiastically rallied through the day since investors largely focused on firm cues from global markets after crude prices shot up in overnight trade as the dollar weakened a bit and reports suggested that Russia was keen on cutting output. The weakness of dollar in the international market capped the rupee fall against the dollar. Local sentiments also got buttressed by Moody’s latest report, on non-financial corporate, stating that Indian businesses will see strongest profit growth over the next 12 to 18 months on the back of sustained economic expansion and project completions. Meanwhile, the Congress Party on Tuesday held the stubborn approach of the BJP-led NDA regime responsible for repeated disruptions in both Houses and said that the opposition was ready for debate in Parliament. Investors remained cautious over concern of India’s demonetisation move estimated to pulling down gross domestic product growth this financial year from last year’s 7.6%. The domestic rating agency, ICRA has forecasted a 40 bps dip in growth rate to 7.2% in the second quarter of the current fiscal, citing debilitating impact of the demonetisation drive on the economy. Meanwhile, aviation stocks edged higher with report that domestic airlines carried 86.72 lakh passengers during October this year, registering a growth of 23.18% over the 70.39 lakh passengers flown during the same period in the previous year. Finally, the BSE Sensex gained 195.64 points or 0.76% to 25960.78, while the CNX Nifty rose 73.20 points or 0.92% to 8,002.30.