Sensex, Nifty likely to open higher ahead of F&O expiry

Indian markets fell from their record-highs and ended lower on Wednesday after investors booked profits. Banking and financial stocks dragged the most, while IT and pharma stocks also weighed on the indices. Today, the start of F&O expiry day is likely to be positive despite mixed cues from global peers. Traders will be getting encouragement with a private report stating that the Indian economy is likely to have improved in the second quarter with GDP printing in at -7.8 percent as against 24 percent contraction in the June quarter. Some support will come with another private report that India was the fourth major host of greenfield foreign direct investment (FDI) projects and eight major host of cross-border M&A deals between 2004 to 2015. Traders may take note of report that in a bid to push infrastructure creation in the country, the Union Cabinet has approved Rs.6000 crore capital infusion in National Investment and Infrastructure Fund's (NIIF) debt platform over the next two years. Investors will track the meeting of SEBI-appointed Secondary Market Advisory Committee which is expected to discuss big bang reforms for the capital market. However, there may be some cautiousness with report that India reported 44,699 fresh Covid-19 cases on Wednesday, taking its tally to 9,266,697. The country's death toll mounted to 135,261. Meanwhile, market regulator SEBI has relaxed certain surveillance measures, including those pertaining to market wide position limits that were put in place eight months ago to curb volatility in the markets due to the coronavirus pandemic. Metal stocks will be in focus with World Steel Association (worldsteel) report that India's crude steel output increased marginally by 0.9 per cent to 9.058 million tonne (MT) in October 2020. There will be some reaction in real estate sector stocks as a recent CRISIL report on the real estate sector has said that new home sales have seen a surprise surge in the last couple of months bringing it back to pre-pandemic levels in key markets.

The US markets ended mostly lower on Wednesday as investors switched their focus from vaccine hopes to disappointing US jobs data and new Covid-19 lockdowns. Asian markets are trading mixed on Thursday as investors reacted to minutes released overnight from the U.S. Federal Reserve’s November meeting.

Back home, Wednesday turned out to be a dismal day of trade for Indian equity benchmarks, where key gauges went home with a cut of over one and half percent each, breaching their crucial 43,850 (Sensex) and 12,900 (Nifty) levels, as investors booked profit across-the-board. Both indices had scaled fresh record highs in the opening session, as sentiments got a boost after Nilesh Shah, a part-time member of the economic advisory council to the Prime Minister, said the GDP contraction will improve to higher single digits in the September quarter, and the economy will be back to positive growth by the March quarter. Some support also came with CII National Committee on Retail Chairman Shashwat Goenka’s statement that a cohesive national retail policy would go a long way in reviving the sector and help generate up to 30 lakh additional jobs in the country by 2024, He said a thorough national retail policy would help the sector bounce back and grow exponentially in the years to come. However, benchmark indices erased all gains and slipped into the red in late morning deals, as the sentiments turned pessimistic with S&P Global Ratings’ statement that non-performing loans in the Indian banking sector is likely to witness an uptick and may shoot up to 11 per cent of gross loans in the next 12-18 months. Some cautiousness also came after a senior finance ministry official said that India's score on protection of minority investors compiled by the World Bank as part of the Ease of Doing Business rankings has slipped recently and there is a need for stakeholders to improve on this aspect. Traders remain concerned even after Union Commerce and Industry Minister Piyush Goyal has said that the results of the second quarter of major companies show that profitability of most of them has gone up, indicating that the Indian industry has utilized the Covid period to do the belt-tightening, improve the product-mix, and focus on quality and productivity. Finally, the BSE Sensex fell 694.92 points or 1.56% to 43,828.10, while the CNX Nifty was down by 196.75 points or 1.51% to 12,858.40.