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

Indian markets ended higher Friday led by gains in banking and IT stocks amid mixed global cues. Today, the start of the crucial F&O series expiry week is likely to be positive tailing the Asian cues and as investors continued to follow positive vaccine developments. Traders will be taking encouragement with Industry body FICCI's latest quarterly survey on manufacturing showing that India's manufacturing sector is poised to witness recovery in the July-September quarter, even as hiring outlook for the segment remains bleak. The proportion of respondents reporting higher output during July-September rose to 24 per cent, as compared to 10 per cent in the previous quarter. Some support will come with report that Foreign Portfolio Investors (FPI) have continued to buy domestic equities and debt instruments. So far in November FPIs have bought Rs 44,378 crore worth of stocks and Rs 5,175 crore worth of debt.  Also, the RBI’s data showed that bank credit grew by 5.67 per cent to Rs 104.04 lakh crore, while deposits increased by 10.63 per cent to Rs 143.80 lakh crore in the fortnight ended November 6. Meanwhile, Terming the COVID-19 pandemic an important turning point in the history of humanity and the biggest challenge the world is facing since World War II, Prime Minister Narendra Modi at the G20 summit called for a new global index based on talent, technology, transparency and trusteeship towards the planet in the post-corona world. Though, there may be some cautiousness as the total confirmed case count in India has now crossed 9.1 million. On Sunday, India reported 44,404 fresh Covid-19 cases, taking its tally to 9,140,312. The country's death toll has mounted to 133,773. Banking-related stocks and financials will be in focus, after the RBI panel recommended several changes in the banking industry which includes proposals to raise promoters cap to 26 per cent from current 15 per cent in 15-year period and to allow large corporate houses as promoters of banks or take a significant stake in banks. Infrastructure industry related stocks will be in limelight with report that as many as 437 infrastructure projects, each worth Rs 150 crore or more, have been hit by cost overruns of over Rs 4.37 lakh crore. The Ministry of Statistics and Programme Implementation monitors infrastructure projects worth Rs 150 crore and above.

The US markets ended lower on Friday on a combination of dwindling aid for the US economy and rising novel coronavirus infection rates. Asian markets are trading mostly in green on Monday as hopes for imminent coronavirus vaccines buoyed investor sentiment, but worries over the impact of economic lockdowns and uncertainty over US stimulus capped gains.

Back home, in a volatile session, Indian equity benchmarks ended in green with gains of over half percent each on Friday, tracking gains in index-heavyweights Bajaj Finserv, Titan Company and Bajaj Finance amid largely positive cues from global markets and sustained foreign fund inflow. Benchmarks made positive start, as traders got encouragement with report that investments through participatory notes (P-notes) in the Indian capital market surged to Rs 78,686 crore at October-end, making it the highest level in 14 months, on enhanced global liquidity and measures taken by the government back home. Some support also came as the Reserve Bank announced to conduct simultaneous purchase and sale of government securities under open market operations (OMOs) for Rs 10,000 crore each on November 26. The decision was taken after a review of the current liquidity and financial conditions. However, key gauges cut all of their gains to turn negative in late morning deals, as Global forecasting firm Oxford Economics revised downwards its India growth forecast over the medium term to an average 4.5 per cent over 2020-25, from its pre-pandemic projection of 6.5 per cent. In a research note, it said India's post-COVID-19 scars could be among the worst in the world. But, market indices once again turned bullish in the last hour of trade, as some optimism remained among traders with Rating agency ICRA’s report stated that the Year-on-Year (YoY) contraction in India’s Gross Domestic Product (GDP) (at constant 2011-12 prices) is expected to narrow appreciably to 9.5 percent in the second quarter of the current fiscal (Q2FY21) from 23.9 percent in Q1FY21, as the economy recovered from the lows of the pandemic-induced lockdown. Some support also came with Prime Minister Narendra Modi’s statement that the belief in democracy, rule of law and freedom is the strength of the partnership between India and Luxembourg. He also said India-Luxembourg's partnership amid the COVID-19 pandemic can be beneficial for the recovery of both the countries. Market participants also took a note of Union IT and Communications Minister Ravi Shankar Prasad’s statement that the government was very keen to promote India as a very big centre of the data economy and would finalise a data protection law very soon. Finally, the BSE Sensex rose 282.29 points or 0.65% to 43,882.25, while the CNX Nifty was up by 87.35 points or 0.68% to 12,859.05.