Down start expected for the Indian markets of F&O expiry week

The Indian markets extended their losses on Friday after the catastrophic fall in previous session. The daunting global cues continued weighing on the sentiments while there wasn’t any supportive cue either from the domestic front. Today, the start is again likely to be weak with benchmarks plunging further. This is the F&O expiry week and the trade is also likely to remain volatile, however the development in Europe will mainly guide the markets. Meanwhile, Finance Minister Pranab Mukherjee has said that BRICS economies have been key drivers of the global recovery, but even their growth is faced with the challenge of inflation and continuing uncertainty in global financial markets. There is good news for the corporate as the finance ministry and the Reserve Bank of India, have decided to allow Indian firms to borrow overseas at rates that are higher than the ceilings now applicable on short, medium and long-term borrowings, to help local lenders and corporates access relatively cheaper funds.

The Securities and Exchange Board of India (SEBI) has said that the new takeover norms, which include raising the ownership trigger for a mandatory takeover offer in a company to 25 percent from 15 percent now, will come into effect in 30 days.

There is one new listing today, PG Electroplast, a company engaged in providing electronic manufacturing services will make its debut on the bourses. The company has fixed issue price at Rs 210, higher end of price band of Rs 190-210 a share. The issue, which opened during September 7-12 for subscription, was subscribed 1.34 times.The company manufactures and assembles a comprehensive range of consumer electronic components and finished products such as colour television (CTV) sets & components, air conditioners (ACs) sub-assemblies, DVD players and Compact Fluorescent Lamps (CFL) for third parties.

The US markets managed a close of modest gains on Friday but the mood remained cautious amid the European debt concerns, as Europe’s failure to tame the its sovereign-debt crisis threatens global economic growth. The Asian markets have made a weak start and the Japanese market is leading the pack after a long weekend.

Back home, the carnage in Indian stock markets prolonged for yet another session as the benchmarks continued to sway to the tune of depressing global developments and deposed another over a percentage point on the last trading session of the week. The session was characterized by extreme volatility as the frontline indices went through a rollercoaster ride amid lack of direction and a pandemonium across global equity markets. Marketmen looked at every rise as opportunity to take profits off the table as there emerged no encouraging factor that could halt the unrelenting selling pressure. With deteriorating situation in the US and Europe and fresh worries over a global economic recession after disappointing Chinese and European factory output data investors were left with the only option to take cash off the table and sit on the sidelines until something really revitalizing happens. Meanwhile, investors were seen covering lot of short positions in afternoon trades after some pessimism got petered out on the back of strong European market opening. The brief optimism in sentiments came after the Group of 20 finance ministers and central bank Governors reassured markets that they would take all necessary measure to preserve financial stability and increase the flexibility of the euro zone's rescue fund. However, the recovery proved short-lived and the markets weakened again, as inflation and rate hike worries prompted investors to cut positions ahead of the weekend. Earlier on Dalal Street, the benchmark got off to a gap down opening, in tandem with the somber sentiments prevailing in Asian markets. Thereafter, the frontline indices tried to pare the early losses and crawled towards the neutral line. But the key gauges could not succeed as selling pressure at higher levels brought the indices to intraday lows in late morning session. Benchmarks once again treaded on the road to recovery in afternoon and even managed to break into the green territory but only for a brief period as fresh bouts of profit booking again brought the indices to lower levels by the end of trade. On the BSE sectoral space, metal, capital goods and rate sensitive counters did the maximum damage as they went home with huge losses. However, information technology pocket showed some resilience for most part of the session and attracted buying interests since rupee depreciated considerably against the American greenback. Finally, the BSE Sensex shaved off 199.09 points or 1.22% to settle at 16,162.06, while the S&P CNX Nifty plunged by 55.90 points or 1.14% to close at 4,867.75.