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

Indian markets ended higher on Wednesday, with both Sensex and Nifty at their record closing highs led by gains in banking, auto, metal, and IT stocks. Today, the start of F&O series expiry session is likely to be slightly negative amid mixed cues from Asian peers. There will be some cautiousness with report indicating that a majority of economy watchers were quick to point out that Q2FY20 growth rate will be lower than the 5 per cent rise seen in April-June quarter, especially due to the havoc caused by Monsoon rains across India. However, traders may take note of Finance Minister Nirmala Sitharaman’s statement that economic growth might have slowed down but there was no impending threat of a recession. Defending the current state of the Indian economy, the finance minister said that every step that had been taken by the government was aimed at development. Meanwhile, markets regulator SEBI came out with a framework pertaining to preferential issue as well as institutional placement of units by a listed real estate investment trust (REIT) and infrastructure investment trust (InvIT). There will be some buzz in the textile stocks with report that the Indian textile industry can become a $300 billion industry by 2030 and create an additional 35 million jobs. As per the report, this can be achieved if the industry enhanced its focus on exporting higher value added products, modernisation and sustainable business practices. Cement stocks will be in focus with ICRA’s report that the domestic cement demand growth is expected to taper to around 4% in FY2020 from a double-digit growth rate of 13.3% in the previous fiscal year. There will be some reaction in infra stocks with Union Minister Piyush Goyal’s statement that the Centre has chalked out a plan envisaging an investment of Rs 100 lakh crore in the infrastructure sector over the next five years.

The US markets ended higher on Wednesday supported by rosier US economic data and ongoing hopes for a US-China trade deal. Asian markets are trading mixed on Thursday as concerns that tensions over Hong Kong could stymie a US-China trade deal cast a pall over Thanksgiving cheer from unexpectedly positive US economic data.

Back home, Indian equity bourses ended Wednesday’s session at fresh record closing highs. After a fabulous start, indices remained bullish, aided with Commerce & Industry Piyush Goyal’s statement that India's service sector can help achieve the Central government’s target of $5 trillion GDP. He said the service sector has the potential to be the largest job creators in the country & over the next five years, it has the potential to contribute $3 trillion out of the $5 trillion GDP target set by the government. However, in noon deals, some of gains got trimmed, as Moody's showed that Indian states face difficulties in reducing deficits, constraining the country's ability to meet medium-term fiscal consolidation goals as economic growth slows. But, in the last leg of the trade, key bourses gained traction to reach near their intraday high points, tracking firm cues from global markets. Domestic sentiments remained positive, amid a report stating that net investment of equity and debt reported by foreign portfolio investors (FPIs) stayed bullish with net buying logged at Rs 4,677.75 crore from Indian equities. Market participants also remained encouraged with another private report indicating that the Reserve Bank of India (RBI) is expected to cut interest rates in its December bi-monthly monetary policy and again before July. Finally, the BSE Sensex surged 199.31 points or 0.49% to 41,020.61, while the CNX Nifty was up by 63.00 points or 0.52% to 12,100.70.