Markets to continue the momentum on penultimate session of F&O expiry

The Indian markets surged in last session adding another around a percent for the day, with Nifty closing at record highs. Today, the start of the penultimate session of the F&O series expiry is likely to be in green. Traders will be getting some encouragement with report that the outperformance of the domestic stock market has pushed India’s contribution to the global market capitalisation to a six-year high. Traders will also be reacting to NITI Aayog member Bibek Debroy’s statement who made a strong case for removal of exemptions on personal income tax and bringing agriculture under the tax net with a view to increasing the resources of state. There will be some buzz in the PSU banking stocks, as the RBI Governor Urjit Patel has said the Indian banking system could be better off if some public sector banks are consolidated to have fewer but healthier entities, as it would help in dealing with the problem of stressed assets. There will be some reaction in services sector stocks too, as the government has said that there will be two slabs for services under GST, with segments such as transport facing a lower levy compared to the 18% tax on several services. There will be some buzz from the primary market too, as the bidding process of the Rs 728 crore initial public offering of S Chand Company will start today.

The US markets extended their upmove and ended higher in last session, the tech-heavy Nasdaq climbed to a new record closing high on getting some upbeat earnings numbers and also as the new home sales saw a substantial increase in the month of March. The Asian markets continuing their rally mood have got a positive start, as corporate results and hopes of US tax reform boosted optimism for global growth. Japanese market was leading the pack as the yen weakened further.

Back home, Euphoric Indian equity indices showcased an impressive performance on Tuesday by conquering the crucial 9,300 (Nifty) and 29,900 (Sensex) levels as they got underpinned by a series of encouraging leads. Monday's optimism got spilled over into the Tuesday's session helping the local indices in extending the winning momentum for second successive session as encouraging global developments buttressed domestic sentiments. Investors continued to build hefty positions across the board as sentiments got a boost after a centrist victory in the first round of the French presidential election. Polls show Emmanuel Macron defeating anti-euro nationalist Marine Le Pen by as much as 30% points in the second round of the French presidential election in two weeks. Sentiments were also bolstered by a string of optimistic quarterly results including from Reliance Industries, which were announced yesterday post market hours. For the March quarter, RIL's consolidated net profit rose 12.3% to Rs 8,046 crore, against Rs 7,167 crore for the same period a year ago. Its turnover in the March quarter rose 45.2% year-on-year to Rs 92,889 crore, largely meeting street expectations for net profit. Further, investors’ sentiments remained buoyant with Finance Minister Arun Jaitley's statement that India will continue to grow at 7-8 per cent rate, an 'absolute normal' for the nation under the current global environment. Jaitley also said as far as the economy is concerned, all the decisions taken by the Modi-Government are consistently in one direction. Moreover, paving the way for July 1 roll out of the GST, the Bihar assembly in a special session unanimously passed the Goods and Services Tax Bill, 2017. Prime Minister Narendra Modi has said the consensus on Goods and Services Tax (GST) reflects the spirit of 'one nation, one aspiration, one determination'. Meanwhile, banking stocks gained traction on the report that mutual fund managers continued to be bullish on bank shares, with their allocation to the sector reaching an all-time high of over Rs. 1.26 lakh crore at the end of March 2017. Also, Indian Bank has reported solid performance in January-March quarter as profit soared 3.4 times to Rs 319.7 crore compared with Rs 93.62 crore in year-ago quarter despite higher provisions. Net interest income, operating profit and tax credit boosted profitability. Finally, the BSE Sensex gained 287.40 points or 0.97% to 29943.24, while the CNX Nifty was up by 88.65 points or 0.96% to 9,306.60.