Markets to make a positive start of the penultimate session of F&O expiry

The Indian markets coming off their initial choppiness surged in the final hours of the last session to post their fourth consecutive day of gains, with Nifty closing above the crucial 8900 mark. Today, the start of the penultimate session of the F&O series expiry is likely to be in green and the major indices will be extending the gains. Traders will be getting some support with a private report stating that India's millennial population is a massive disruptive force and driven by this supportive demographics alongwith government's policy action, Indian economy is likely to reach $ 5 trillion by 2025. Also, the government hopes to overshoot the Rs 45,500 crore disinvestment target for the current fiscal amid strengthening of equity markets. The Finance Ministry has cleared disinvestment in two more PSUs last week. Meanwhile, Prime Minister Narendra Modi has pressed the US to have a 'balanced and farsighted perspective' on the movement of skilled professionals, remarks which came against the backdrop of the Trump Administration's move to curb H1B visas that will hurt India. Commerce and Industry Minister Nirmala Sitharaman too said that the issue has been discussed in detail with a group of US Congressmen. The banking stocks will see some action, as the newly-appointed Reserve Bank deputy governor Viral V Acharya has called for some urgent steps to resolve NPAs, saying none of the “piece-by-piece approach” offered so far has worked, including the AQR, simply because of “the many discretions given to banks” as also their “skewed incentive system”.

The US markets coming after a long weekend scaled fresh record highs in the last session, amid optimism about more business friendly policies under President Donald Trump. The Asian markets have once again made a mixed start, as the dollar fell against most major currencies while oil extended a rally. The Japanese market was however struggling amid a strengthening yen.

Back home, Indian benchmark indices carried forward their northbound journey for yet another session on Tuesday on sustained buying by funds and retail investors ahead of February series F&O expiry on Thursday. Sentiments got a boost with report that yearly SBI Composite Index (year-on-year) for February 2017 improving to 49.5 compared to last month’s index of 47.0, indicating some improvement in sentiments. The monthly Index though declined marginally to 49.2 in February 2017 from 50.9 in January 2017, which means IIP growth may continue to contract in January and February 2017. Some support also came with the report that the government hopes to overshoot the Rs 45,500 crore disinvestment target for the current fiscal amid strengthening of equity markets. However, gains remained capped with the rating agency ICRA’s  report indicating that the economy based on the gross value added (GVA) is set to slip to 6.2% in the December quarter from 6.9% a year ago and GDP growth will decline to 6.5% from 7.2%. The slippages will be driven by the slowdown in growth of the industry and services, offsetting the healthy agricultural expansion during the period. Furthermore, a private report indicated India's growth momentum witnessed a recovery in January but it is not broad-based and overall economic activity remains below pre-demonetization levels. The slowdown that started in the October-December quarter of 2016, post demonetization is spilling over into the first quarter of 2017 (January-March). Meanwhile, some steel stocks gained traction as the government has extended anti-dumping duty on import of certain steel products from China for five years with an aim to protect domestic players from the cheap shipments. The levy has been imposed in the range of $961.33 - 1,610.67. Furthermore, Telecom stocks slipped as Reliance Jio's free data offer has hit rivals, raising concerns about competition and margins in the sector. Jio has launched the new Jio Prime subscription plan that offers the same free data and other services, customers have received as part of the Happy New Year plan for another 12 months at Rs 303 per month. Finally, the BSE Sensex surged 100.01 points or 0.35% to 28761.59, while the CNX Nifty was up by 28.65 points or 0.32% to 8,907.85.