Markets likely to get a flat start of the F&O expiry session

The Indian markets ended marginally lower in last session led by the decline in rate sensitives’ on concern that the apex bank may not go for any rate cut soon. Today, the start is likely to be in green on supportive regional cues but the mood of the market is likely to remain volatile with the expiry of October F&O series slated today. There will be buzz in the PSU stocks, as Prime Minister Manmohan Singh has urged the PSUs to invest and grow, and set the pace for India's growth in the process, regardless of how the rest of the world is doing. Markets will also be reacting to the Sebi demand to the government to frame a strong central legislation to tackle the menace of companies collecting large amount of money from the public without requisite regulatory approvals. There will be some buzz in the pharma stocks after the Department of Pharmaceuticals sought opinion from the Law Ministry on the Supreme Court interim order restraining the Government from altering the current pricing mechanism for essential medicines.

There will be lots of important result announcements too, Adani Enterprises, Asian Paints, Delta Corp, IPCA Lab, Kotak Mahindra Bank, KPIT Cummins, Mahindra & Mahindra, Oriental Bank and Novartis India are among the many to announce their numbers today.

The US markets witnessed a mild pullback in last hour after a sharp selloff in last session but still ended marginally lower. The Federal Reserve stuck to its plan to keep stimulating the US economy until the job market improves and acknowledged hints of strength in the US housing market, as sales of new homes in the US climbed to a two-year high. The Asian markets have mostly made a positive start supported by Chinese flash manufacturing data, which showed growth shrank for a 12th straight month in October, but output was at a three-month high.

Back home, Indian equity indices exhibited a bleak session of performance on Tuesday, erasing all their previous session’s gains, as market participants adopted cautious approach on the penultimate day of F&O October series expiry ahead of Dussehra holiday. Bourses tried hard to remain above their pre-close mark in morning trade supported by PSU stocks, which moved higher ahead of the chiefs of PSUs meet with the Prime Minister, they are expected to highlight interference by their administrative ministries in the meeting. But, the frontline gauges lost their crucial 5,700 (Nifty) and 18,750 (Sensex) levels as investors kept themselves busy in offloading positions in sectors like power, software, auto and FMCG amid global weakness. The selling got intensified in second half of trade as European markets, after a positive start, entered into red terrain as third quarter results presented a mixed picture. Cues from regional peers too remain subdued as most of the Asian equity indices shut shop in the negative territory. Back home, some amount of pessimism also came in from money markets as rupee falls to 53.59/60 versus its previous close of 53.47/48 as oil importers stepped up dollar purchases to meet month-end import commitments in a holiday-shortened week. Sentiments also remain dampened after rate sensitives banking and realty space ended lower as Reserve Bank of India (RBI) is unlikely to take any key policy measures in its upcoming policy meet on October 30, 2012 as inflation remains sticky. Some amount of pressure also came in from Metal which dropped near a percent after copper prices slipped in the global market on Tuesday. However, the downside remained capped as sentiments got some support from Idea Cellular’s second quarter numbers. The company, on consolidated basis, reported 126.97% rise in its net profit after tax at Rs 240.04 crore for the quarter ended September 30, 2012 as compared to Rs 105.76 crore for the same quarter in the previous year. Moreover, Cairn India too beat the street expectation, on consolidated basis, posted a rise of 204.34% in its net profit after tax at Rs 2322.18 crore for the quarter ended September 30, 2012 as compared to Rs 763.03 crore for the same quarter in the previous year. Better than expected numbers from United Phosphorus, Bank of Maharashtra, Tata Coffee and JK Lakshmi Cement too aided the sentiments. Finally, the BSE Sensex lost 83.42 points or 0.44% to settle at 18710.02, while the S&P CNX Nifty declined by 25.75 points or 0.45% to end at 5,691.40. The Indian markets remained closed on Wednesday on account of Dussera.