Markets to make mildly soft start of F&O expiry session

Indian markets snapped two sessions of losses and ended higher on Wednesday, on the back of strong Q3 earnings. Today, the start of the F&O series expiry session is likely to be mildly soft tailing the weakness in Asian peers. Traders will be concerned as India Ratings and Research (Ind-Ra) expects aggregate fiscal deficit of the states to come close to 3 per cent of gross domestic product in the current fiscal year, higher than the budgeted 2.6 per cent. In its note, it has revised the outlook on state finances to stable-to-negative for the current fiscal year from stable. Also, there will be some cautiousness as industry body Ficci said its Economic Outlook Survey has projected the country's annual median GDP growth for 2019-20 at 5 percent, in line with the projections made by the National Statistical Organisation (NSO). The survey has put the median growth forecast for agriculture and allied activities at 2.6 percent for 2019-20, the industry and services sector at 3.5 percent and 7.2 percent, respectively, during the current year. Though, it added that growth is likely to improve to 5.5 percent in 2020-21 as per the projections. Meanwhile, in a move that will help lessen the burden on the National Company Law Tribunal (NCLT), the government has notified the rules for winding up of companies under the companies law. There will be some buzz in the cement stocks with ICRA’s report that Even though the demand growth has slowed down, profitability of the cement companies is expected to rise supported by the higher realisations and benign input cost. Oil and gas stocks will be in focus as ahead of the Union Budget, the Oil Ministry made a renewed pitch for the inclusion of natural gas in the ambit of GST to promote the use of the environment-friendly fuel by reducing the multiplicity of taxes and improving the business climate.  There will be some reaction in textile stocks as Southern India Mills' Association said the new Remission of Duties or Taxes on Export Product benefit would refund all embedded/ blocked duties and taxes and cover all textile products like fibres, yarn, fabrics and garments across the value chain to have a level playing field globally and remain competitive. There will be some result announcements to keep the markets in action.

The US markets ended mostly higher on Wednesday amid the US Federal Reserve kept interest rates on hold and investors continued to watch for developments on the ongoing coronavirus outbreak. Asian markets are trading mostly lower on Thursday amid the increasing evidence of a hit to economic growth from the deadly coronavirus.

Back home, Indian equity bourses came back in green on Wednesday to settle higher after a two days of continuous fall. The start of the day was fabulous aided by NITI Aayog CEO Amitabh Kant’s statement that a $5 trillion economy goal is achievable even as it’s a tough task, noting that the states need to play a critical role for the national economy to meet the challenging target. Some support also came with report that in order to protect prudent commercial decision of bankers, the government has taken a slew of decisions, including doing away with personal responsibilities of MD and CEO of PSBs for compliance in dealing with large value frauds committed by bank officials. Benchmarks maintained their strong gains throughout the trading session, on account of positive cues from the global markets.  Market participants remained optimistic, after the commerce ministry said that India has pitched for elimination of trade-distorting subsidies on agriculture and ensuring differential treatment to developing countries by the WTO members. Adding more comfort among traders, a private report stated that government is expected to raise spending on infrastructure and cut some personal tax in its 2020-2021 budget, to spur consumer demand and investment. Finally, the BSE Sensex rose 231.80 points or 0.57% to 41198.66, while the CNX Nifty was up by 73.70 points or 0.61% to 12129.50.