Markets to make slightly negative start of F&O expiry session

Snapping three-day losing streak, Indian markets gained momentum and ended higher with gains of over a percent on Wednesday, as earnings optimism outweighed concerns over elevated oil prices. Today, the start of the F&O series expiry session is likely to be slightly negative tailing the weakness in Asian peers. Besides, lots of volatility may be seen towards the expiry of April series as traders rollover their positions. However, some relief may come with report that giving relief to composition scheme taxpayers under the GST, the finance ministry has allowed such businesses to file self-assessed tax return on quarterly basis in a simplified form. In yet another simplification, the Goods and Services Tax (GST) Council has added flexibility into the way a company can utilise the available input tax credit. Any company would now be eligible to use credit available against paid integrated GST (IGST) to set off tax liabilities of state GST (SGST) and central GST (CGST) in any proportion and in any order. Moreover, the Finance Ministry has introduced changes in the e-way bill system, including auto calculation of distance based on PIN codes for generation of e-way bill and blocking generation of multiple bills on one invoice, as it seeks to crack down on GST evaders. There will be some buzz in the banking sector with report that the RBI has directed banks to disclose loans outstanding to Infrastructure Leasing & Financial Services and the provisions required to be made against the exposure, in their notes accompanying their fourth-quarter financial results. The RBI wants banks to disclose the total loans outstanding as well as the percentage of loans that are non-performing as per the Income Recognition and Asset Classification (IRAC) guidelines but not yet classified as NPAs. There will be some reaction in telecom sector stocks with ICRA’s report that the wireless broadband subscriber base continues to maintain its strong growth trajectory, increasing to 532 million in February 2019, or 45 percent of the total subscriber base, witnessing addition of 10.2 million during the month. There will be lots of earnings reaction based on the performance of the companies.

The US markets ended lower on Wednesday, as investors digested a batch of mixed earnings reports. Asian markets are trading mostly in red on Thursday as a surprise deterioration in German business morale rekindled fears of slowing global growth.

Back home, bulls made a roaring comeback on Wednesday’s trading session, with Sensex and Nifty closing with gains of more than a percent each. After a positive start, the markets remained in green terrain throughout the day, as the Reserve Bank of India (RBI) decided to infuse more liquidity into market. It will buy government securities under Open market operations (OMOs) for an aggregate amount of Rs 25,000 crore in May 2019 through two auctions of Rs 12,500 crore each. But, gains were limited, amid credit rating agency, Care Ratings’ latest report warning that a spike in crude oil prices by 10 percent owing to the US sanctions on Iranian crude exports can result in a 0.40 percent widening of the current account deficit (CAD), which can subsequently play out into a 3-4 percent fall in the rupee and also push up inflation by 0.24 percent. Further, key indices gained traction in the dying hours of the trade, buoyed by Fitch Ratings’ report indicating that the RBI is the first central bank in the Asia-Pacific region to begin an explicit interest rate easing cycle buoyed by benign food inflation and easier global financial condition.  Some support also came with a report that around 3.10 crore small farmers have so far received the first tranche of Rs 2,000 each under the PM-Kisan scheme and 2.10 crore peasants have got the second installment as well, costing Rs 10,500 crore to the exchequer. The market participants took note of another report that the Ministry of Corporate Affairs plans to start gathering 'primary data' from persons who have put in their money in chit funds and deposit-taking schemes, amid continuing efforts to clamp down on illicit fundraising activities. Finally, the BSE Sensex gained 489.80 points or 1.27% to 39,054.68, while the CNX Nifty was up by 150.20 points or 1.30% to 11,726.15.