Sensex, Nifty likely to make positive start of F&O expiry session

Indian markets wiped out all of their initial losses and ended in green territory on Wednesday, supported by gains in shares of private bank and auto companies. Today, the start of the F&O series expiry session is likely to be in green tracking firm global cues. Traders will be getting some encouragement with a private report stating that with global crude oil prices slumping to below $50 a barrel just months after crossing $86, the Prime Minister Narendra Modi-led government is now confident that the current account deficit (CAD) for 2018-19 (FY19) can be contained at about 2 per cent of gross domestic product (GDP). Earlier, the government had estimated the CAD would be 2.8 per cent of GDP. There will be some support with a Reserve Bank of India study showing that private sector non-finance firms reported a 41 per cent growth in net profits during the July-September quarter, despite higher expenditure as other income contributed to growth. The central bank attributed this to the strong growth in manufacturing sector profits, which received support from other income. Traders may take note of a report that tightening norms for e-commerce firms having foreign investment, the government Wednesday barred online marketplaces like Flipkart and Amazon from selling products of companies where they hold stakes and banned exclusive marketing arrangements that could influence product price. The revised policy on foreign direct investment in online retail, issued by the commerce and industry ministry, also said that these firms have to offer equal services or facilities to all its vendors without discrimination. There will be some buzz in the airline industry stocks with report that Aviation watchdog DGCA has proposed duty time limits and rest hours for air traffic services personnel, wherein an individual can be on duty for up to 12 hours in a day. This is the first time that the regulator has mooted duty time limits for Air Traffic Services (ATS) personnel and it also comes at a time when air traffic has been growing exponentially.

The US markets ended significantly higher on Wednesday with traders picking up stocks at reduced levels on the heels of recent weakness. Asian markets were trading in green on Thursday following an overnight surge on Wall Street as markets, battered by a recent drum roll of deepening political and economic gloom, cheered upbeat US data and the Trump administration’s effort to shore up investor confidence.

Back home, late hour recovery helped the Indian equity benchmarks to close the Wednesday’s trading session in green, with Sensex and Nifty gaining more than 150 and 50 points, respectively. After a sluggish start, key indices remained weak for the most part of the session, impacted with former chief economic advisor Kaushik Basu’s statement that distress in some sectors of the economy has slowed India’s GDP growth, the consequences of which could be far reaching. Basu said distress has been very much visible in the agriculture sector as the condition of farmers is bad. Domestic sentiments also got hit with a private report stating that as India near 2019 general elections, populist steps by the government may exert pressure on India’s fiscal scenario. It expected the general government debt at 70.1% of the GDP in FY19. Weakness in broader markets along with heavy sell-off in IT, Realty and Healthcare stocks also, kept the markets down. Sun Pharma Industries and Yes Bank also contributed to the losses during the trading session. However, key indices recovered all of their losses in late noon deals to enter into positive territory, on account of last hour buying. The street got encouragement, after investments in the Indian capital market through participatory notes climbed to Rs 79,247 crore in November after hitting a nine-and-a-half year low at the end of preceding month. Some comfort also came with Finance Minister and GST Council Chairman Arun Jaitley raising hopes of further pruning the peak rate (28%) and merging the 12% and 18% slabs. Traders also took some support with a private report that the government is considering several measures to support farmers in distress as pressure mounts for a nationwide loan waiver scheme ahead of the general election. Some relief also came with the commerce ministry Suresh Prabhu’s statement that India is preparing a specific strategy for exports to each geography as part of plans to make 2019 a year when outward shipments would start driving the country's overall economic growth. Finally, the BSE Sensex surged by 179.79 points or 0.51% to 35,649.94, while the CNX Nifty was up by 66.35 points or 0.62% to 10,729.85.