Markets likely to make a somber start of the F&O expiry session

The Indian markets despite holding up to near the neutral lines for most part of the day, slipped in the final hours posting loss of over half a percent, some earnings disappointments too added to the woes. Today is the expiry of May F&O series and it’s likely to be one of the worst series expiries. Though, in a bid to mollify anxious FIIs, Finance Minister has once again stated that I-T assessments, which have been completed, will not be reopened by the Income Tax department under the retrospective amendment proposal of the Finance Bill, 2012. Traders will also be eyeing the Q4 GDP data, slated to be announced later in the day. Though it’s more or less likely to remain flat at about 6.1% but anything higher or lower will take the markets in that direction. Though, there has lots of short built for the series, so upmoves can be expected in the latter part of the day to cover the shorts. Commodity stocks are again likely to remain under pressure, tailing their global counterparts. The traders will also be eyeing the movement in rupee, which has once again started ascending and with other Asian currencies remaining under pressure it is likely to weaken further. There is likely to be buzz in the markets with SEBI’s directives that the defunct stock exchanges and those which are not able to maintain a turnover of Rs 1,000 crore will have to close shops within two years.

There will be some important result announcements too. BEML, Premier Inds, TT and Timex Group are among the many to come up with their numbers.

The US markets were stormed by more concern regarding the European debt crisis mainly the Spain and investors were worried about its plans to raise new funds as the country's borrowing costs rose. Spain is expected to issue new bonds soon to fund its ailing banks. The Asian markets have made a weak start and most of the indices are heading towards their biggest monthly drop since 2008. Japan’s industrial production rising at 0.2 percent in March, remaining much lower than estimated 0.5 percent weighed on the investors sentiments.

Back home, Indian stock markets wrapped up Wednesday’s trading session on a subdued note as the benchmark indices went on to undo most part of the good work done on Monday by shaving off about three fourth of a percentage points and drifting around the psychological 16,300 (Sensex) and 4,950 (Nifty) levels. Market participants remained cautious a day ahead of May series futures and options expiry session and announcement of fourth quarter economic growth numbers. The frontline gauges got pummeled in the dying hours of trade as sentiments went awry tracking the depreciation in rupee and discouraging developments from the Euro-zone where equity indices traded on a pessimistic note. The psychological 16,400 (Sensex) and 5,000 (Nifty) levels proved as stern resistances as the key gauges failed to sail beyond those levels. Local investors’ mood also got hit as despite the repeated measures by the RBI to rein in the downslide in rupee, the beleaguered currency extended its streak of depreciation and looked set to breach the historical lows hit recently amid increased end of month demand for the greenback from oil importers. Apart from the global reasons, the rupee was also being weighed down by deep concerns about India's fiscal and economic challenges, and doubts about slowing policy reforms. On the BSE sectoral front, investors were seen squaring off hefty positions from the rate sensitive Automobile counter, which got battered by close to four percent, being the top laggard in the space. Bellwether Tata Motors remained the main culprit as it got brutally slaughtered by about twelve percent post announcing disappointing quarterly earnings. Other rate sensitive pockets like Bankex and Realty too got pounded by around two percent. Though largely across the board selling was evident, investors showed some buying interest in IT and TECk sectors, which provided some support to the benchmarks. Finally, the BSE Sensex lost 126.43 points or 0.77% to settle at 16,312.15, while the S&P CNX Nifty declined by 39.35 points or 0.79% to close at 4,950.75.