Benchmarks to make gap-up opening of F&O expiry session

Indian markets extended their gains for third straight session on Wednesday on positive global cues. Besides, buying in IT stocks such as TCS and Infosys also supported the markets. Today, the markets are likely to make gap-up opening of November future and options (F&O) expiry session on firm global cues as the US Federal Reserve Chair Jerome Powell’s comment boosted investors’ sentiments. Traders will be getting some encouragement with Union Minister Suresh Prabhu’s statement that the commerce and industry ministry is preparing an action plan for implementing the proposed new industrial policy, aimed at promoting manufacturing and economic growth of the country. Traders will also be reacting to a private report that the Reserve Bank of India (RBI) may have to conduct open market operations (OMOs) of another Rs 1,60,000 crore in the fourth quarter of the current fiscal to tide over the banking liquidity crisis. Meanwhile, the RBI’s data showed that India Inc’s foreign borrowings dipped nearly 66% to $1.41 billion in October this year. Moreover, Finance Minister Arun Jaitley will present the interim Budget for 2019-20 fiscal on February 01, 2019. There will be some buzz in the banking sector stocks with Fitch Ratings’ stating that the decision to restructure loans of up to Rs 25 crore for the MSME sector is a step backwards and the risks to the banking sector will manifest in the next 6-9 months.

The US markets extended gains on Wednesday on the heels of Federal Reserve Chairman Jerome Powell’s remarks in a speech to the Economic Club of New York that were interpreted as dovish for interest rates. Asian markets were trading mostly in green on Thursday tracking a Wall Street rally as comments from Jerome Powell boosted investor sentiment towards riskier assets.

Back home, Indian equity bourses logged strong gains on Wednesday to continue northward rally for straight third session, on the back of covering-up of pending short positions ahead of November F&O expiry on Thursday. The markets made a cheerful start, taking support with a report that the Reserve Bank of India (RBI) Governor Urjit Patel told law makers that the note ban’s impact was transient and the economy is robust. He said the economy would get a boost from oil prices cooling off from four-year highs and asserted that the fundamentals were robust. Adding enthusiasm among the traders, banks credit flow to commercial sector has gone up by 15.6% on year-on-year basis, registering highest growth since demonetisation. According to the fortnightly data released by the RBI, the adjusted non-food bank credit stood at Rs 97.32 lakh crore as on November 9, 2018 as compared to Rs 84.22 lakh crore reported in the year-ago fortnight. The trade remained positive throughout the session, following positive global markets. Investors reacted positively to the Commerce and Industry Minister Suresh Prabhu’s statement that he has taken up the issue of declining credit to exporters with the finance ministry to ensure adequate availability of funds to them. The street got comfort with a private report stating that Indian analytics, data science and big data industry is estimated to be $2.71 billion in revenues and growing at a healthy rate of 33.5% CAGR.  Some relief also came with Finance Minister Arun Jaitley stating that as many as 3 lakh poor people have benefited from Ayushman Bharat health scheme in the last one-and-a-half months. Meanwhile, the RBI has decided to inject a higher amount of Rs 40,000 crore through purchase of government securities under open market operations (OMOs) in December 2018. Finally, the BSE Sensex surged 203.81 points or 0.57% to 35,716.95, while the CNX Nifty was up by 43.25 points or 0.40% to 10,728.85.