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

Indian markets ended lower for second straight session on Friday as investors exercised caution and avoided long positions amid mixed global cues. Today, the start of the crucial F&O series expiry week is likely to be slightly in green following positive global cues. Investors will be looking ahead to the Gross Domestic Product (GDP) data due later in the week. Traders will be taking some encouragement with data showing that after declining for four consecutive months, investments through participatory notes (P-notes) in the Indian capital market marginally rose to Rs 76,773 crore at the end of October. Some support will come with a survey by the National Statistical Office (NSO) showing that urban unemployment rate dropped to the lowest level in four quarters at 9.3 per cent during January-March 2019. Also, the Reserve Bank of India (RBI) data showed that India's forex reserves rose by $441 million to a fresh lifetime high of $448.249 billion in the week to November 15 on an increase in core currency assets. However, there may be some cautiousness as the government raised concerns over fake invoices being generated in the business-to-business (B2B) segment which is impacting GST collections. Also, traders may be concern with CARE Ratings’ report that the ongoing growth slowdown is taking a toll on investments, as fresh funding for projects fell to a 15 year low in the first half of FY20. Traders may take note of Reserve Bank of India (RBI) Governor Shaktikanta Das’ statement that there is a great need to institutionalize state finance commissions and helping the local bodies enhance their revenue generation capacities. Meanwhile, the government plans to amend the Insolvency and Bankruptcy Code (IBC) to provide immunity to companies taking over stressed assets from prosecution for financial crimes committed by erstwhile promoters. This will help make the insolvency process more attractive for the bidders and instill confidence in them. There will be some buzz in the banking stocks with Deputy Governor N S Vishwanathan’s statement that the Reserve Bank is looking at introducing new rules on corporate governance for banks in sync with global ones, and would also like lenders to disclose more. There will be some reaction in oil stocks with report that the government may end the cross-holding structure existing in the oil sector as it looks to further consolidate operations of public sector enterprises and go ahead with its privatization plan by getting a fair valuation of assets.

The US markets ended higher on Friday after Chinese President Xi Jinping called for Beijing and Washington to strengthen communications, but still lost ground for the week. Asian markets are trading in green on Monday after the US and China made positive comments on the trade deal.

Back home, bears tightened their grip on Dalal Street on the last trading day of the week, with Sensex and Nifty ending lower by over 200 and 50 points, respectively.  After a cautious start, key benchmarks remained negative throughout the day, as credit rating agency ICRA expects further deterioration in the growth of India's GDP to 4.7 per cent in Q2 of FY2020, due to weakening momentum in industry. Adding more worries among investors, Former Reserve Bank of India (RBI) governor C Rangarajan said that reaching the $5-trillion Gross Domestic Product (GDP) target by 2025 is simply out of question at the current growth rate. Indices extended their losses in the second half of the session, despite positive cues from global markets. The street remained pessimistic with a report that merger & acquisition (M&A) deals in the month of October dropped by 45 percent in value terms and 40 percent in volume terms compared to the corresponding period last year.  Traders paid no heed towards the Confederation of Indian Industry’s (CII) jointly survey report, conducted along with Grant Thornton, that over 95 percent of businesses believe that good corporate governance practices help organizations achieve better operational and financial results. Finally, the BSE Sensex lost 215.76 points or 0.53% to 40,359.41, while the CNX Nifty was down by 54.00 points or 0.45% to 11,914.40.