Markets likely to make slightly negative start of F&O series expiry week

Indian equity benchmarks before going to long weekend ended Thursday’s volatile trading session in red territory and snapped four-day winning streak, tracking weak cues from Asian peers. Markets remained shut on Friday on account of Good Friday. Today, the start of the F&O series expiry week is likely to be slightly negative tailing weak cues from global markets amid higher crude oil prices. There will be some cautiousness with a private report that business sentiments continue to decline for the country's financial and macro-economic conditions in the second quarter of the year compared to the same period a year before. As per the report, Composite Business Optimism Index stands at 78.4 during Q2 2019 as against 85.0 during Q2 2018 marking a 7.7% decline. Traders may take note of Arvind Panagariya’s statement that India must focus on growth of labour-intensive sectors to create decent jobs for the masses as well as give serious thought to privatising the public sector banks (PSBs), emphasized that the reform process must be completed in the coming five years. However, some respite may come later in the day with the Reserve Bank of India’s (RBI) data that India’s foreign exchange reserves continued its northward push, increasing by $1.105 billion to touch $414.886 billion in the week to April 12. Besides, Counsellor in India's Permanent Mission to the UN Ashish Sinha has said that India’s growth trajectory holds immense potential for global stakeholders to establish energy, infrastructure and technology collaboration with the country. Meanwhile, the government has extended the last date for filing summary sales return, GSTR-3B, for March month by three days until April 23. There will be some buzz in the insurance companies stocks with the Insurance Regulatory and Development Authority of India (Irdai) data showing that non-life insurance firms registered a rise of 13 per cent in their collective premium income to Rs 1.70 trillion in the financial year ended March. There will be lots of earnings reaction based on the performance of the companies.

The US markets settled higher on Thursday ahead of the holiday weekend as gains in industrial stocks slightly outweighed weakness in health-care and energy shares. Asian markets are trading mixed on Monday as investors awaited the return of major financial markets from the Good Friday holiday.

Back home, Indian equity benchmarks paused the four days gaining rally on Thursday, with Sensex and Nifty closing near their day’s low points. The start of day was positive, buoyed by the Securities and Exchange Board of India’s (SEBI) data report stating that the share of foreign portfolio investments (FPI) in domestic capital markets through participatory notes (P-notes) jumped to Rs 78,110 crore at the end of March from Rs 73,428 crore at the end of February. Of the total, P-notes holdings in equities at March-end were at Rs 56,288 crore, while in debts and derivatives were at Rs 20,999 crore and Rs 119 crore respectively. In early deals, traders also got comfort with the rating agency ICRA’s latest report showing that the issuance of government-fully serviced bonds (GoI-FSBs) has significantly shot up to Rs 64,192 crore during the financial year 2019 as compared to Rs 15,095 crore during FY18. The agency also noted that such borrowings are estimated to have accounted for 0.34 percent of Gross Domestic Product (GDP) for FY19, as against 0.09 percent of GDP for FY18. However, key indices soon slipped in red terrain to trade lower for the rest of the session, amid reports that unemployment rate in India has doubled in eight years to 2018 as 50 lakh lost jobs in last two years beginning with demonetisation in November 2016. Further, adding more worries among investors, a private report stated that the first quarter of 2019 recorded 110 merger and acquisition deals worth $ 12.5 billion (about Rs 86,500 crore), a 33 per cent fall in value terms as against the year-ago period, due to factors such as global economic conditions and uncertainty around Brexit. Trading sentiments also got hit with former Reserve Bank of India Governor Raghuram Rajan’s statement that protectionism does not really help preserve jobs and offers little defence against the job-destroying effects of automation and Artificial Intelligence, asserting that industrial and developing nations cannot afford to ignore the democratic reaction from those left behind by globalisation and technological change. Finally, the BSE Sensex slipped 135.36 points or 0.34% to 39,140.28, while the CNX Nifty was down by 34.35 points or 0.29% to 11,752.80.