Markets to make negative start to F&O series expiry session

Indian markets edged higher for a second straight session on Tuesday amid improved risk appetite on hopes that a trade war between the U.S. and China is avoidable. Today, the markets are likely to make pessimistic start to the F&O series expiry session, tracking feeble global cues. Traders may also remain cautious ahead of a long holiday weekend, with domestic equity markets likely to remain closed on Thursday and Friday, on account of Mahavir Jayanti and Good Friday, respectively. There will be some concern with report that Goods and Services Tax (GST) collections slid for the second straight month to Rs 851.74 billion in February as only 69 per cent of the assessees filed returns. Around 5.951 million GSTR 3B returns were filed for the month of February till March 25. This is 69 per cent of total taxpayers who are required to file monthly returns. There will be buzz in IT stocks after the Income Tax Department freezed bank accounts and deposits of Nasdaq listed IT firm, Cognizant in Chennai and Mumbai for allegedly evading dividend distribution tax. Telecom stocks too will be in focus after Telecom secretary Aruna Sundararajan said that the much-awaited merger of Idea Cellular and Vodafone is in final stages of approval.

The US markets closed sharply lower on Tuesday, erasing earlier gains, as a decline in the broader tech sector brought the major averages down. Asian stocks are trading lower in early deals on Wednesday after US stocks fell sharply on the back of declines in technology names.

Back home, extending northward journey for second straight day, Indian equity benchmarks ended the Tuesday’s trade in green terrain with frontline gauges recapturing their crucial 33,100 (Sensex) and 10,150 (Nifty) levels amid easing concerns about a potential trade war. Domestic markets started the session with a gain of over a percent, as sentiments remained up-beat with the government’s decision to bring down market borrowings during the first-half of FY19 following careful assessment of its financial needs. The Centre will raise a gross Rs 2.88 lakh crore from market borrowings in the first half of the fiscal. It has also chosen to introduce shorter duration government securities and will also an additional Rs 25,000 crore from the National Small Savings Fund against the Budgeted Rs 75,000 crore to cut down its requirement for fund raising. Afterwards markets pared some of their gains, with traders turning anxious ahead of the fiscal deficit data to be released on March 28. Also, the expiry of the current month futures and options contracts are due on Wednesday and positions will be rolled over to next month. However, the markets gained some strength in second half of the trade and ended the session with a gain of around half a percent, as some support with Economic Affairs Secretary Subhash Chandra Garg’s statement that the country is well poised to click a growth rate of 7-8 per cent and with focus on start-ups, MSMEs and infrastructure investment it can step on to higher growth pedestal. traders drew some support from NITI Aayog’s statement that the Indian economy is growing at 7 -8 per cent which needs to be reflected on the human development index (HDI) wherein the country stands at 131st position out of 188 nations. Meanwhile, Chief Economic Adviser Arvind Subramanian has said the task force on direct tax reforms will submit its report in the next 4-5 months. Traders also took note of the report that over 1,200 fresh foreign portfolio investors (FPIs) were registered with markets regulator Securities and Exchange Board of India (SEBI) during April-January period of fiscal year 2017-18, driven by their continued interest in Indian equity, bonds and real estate. Finally, the BSE Sensex surged 107.98 points or 0.33% to 33,174.39, while the CNX Nifty was up by 53.50 points or 0.53% to 10,184.15.