Markets to get a sluggish start of the F&O series expiry day

The Indian markets after a range bound and volatile day of trade ended flat in last session. Traders were apprehensive of further rate cuts by the RBI as the government’s effort to control fiscal deficit will be playing the major role in further easing. Today, is the expiry of the January F&O series, so far the indices have moved up by around 3 percent for the series. The start of the markets is likely to be slightly sluggish but in later trade it may gain momentum with traders covering their short or rolling their positions to the next series. Traders will be concerned with the Reserve Bank of India’s statement that future decisions on monetary easing will not only be driven by the inflation trajectory but also by the widening current account deficit. There will be buzz in the oil & gas sector as the Cabinet's panel for promoting investment by cutting red tape has asked the oil and defence ministries to resolve within a month their differences over allowing oil hunt in 47 blocks and seek fresh approval.The sugar sector too may remain in action as a government panel is likely to approve nearly a 25% hike in sugarcane prices that the mills have to pay to farmers in a season in which plantings are expected to be lower than that of last year's.

Alembic, Allahabad Bank, Cummins India, Godrej Consumers, Grasim Inds, ICICI Bank, Jagran Prakashan, Lupin, Mangalore Refinery, PNB, Punjab & Sind Bank, Satyam Computers and Shree Renuka Sugars are among the many to announce their numbers today.

The US markets ended lower on Wednesday weighed down by Federal Reserve’s statement that growth in economic activity has paused in recent months largely due to weather-related disruptions and other transitory factors.Adding further pressure, GDP unexpectedly fell by 0.1 percent in the fourth quarter after surging up by 3.1 percent in the third quarter. Most of the Asian markets have made a weak start on profit booking after much weaker than expected GDP figures from the United States. Also, Japanese industrial production missed estimates.

Back home, domestic benchmarks, a day after the Reserve Bank of India (RBI) cut key lending rates in its third quarterly review of monetary policy, witnessed consolidation on penultimate day of F&O expiry. Though, domestic bourses re-conquered their crucial 6,050 (Nifty) and 20,000 (Sensex) levels as some support came in from finance minister P Chidambaram’s statement that the government will present a responsible budget next month. Finance Minister has also said that government will cut fiscal and current account deficits to help economy return to the 8 percent growth path. Sentiments also got some boost after foreign institutional investors (FIIs) bought shares worth a net Rs 899.83 crore on January 29, 2013. However, the gains remain capped as risk appetite was frail after the RBI made further rate cuts conditional on government moves to control fiscal deficit. The investors also stayed cautious ahead of US Federal Reserve’s monetary policy decision due later in the day. Global cues remained mixed as European counters traded lower in the early deals. However, most of the Asian equity indices shut shop in the green terrain. Back home, buying in index heavyweights like Reliance Industries (RIL) and ICICI Bank too supported the frontline gauges. RIL recovered from a four-sessions losing streak, while ICICI Bank rose a day ahead of its quarterly earnings results. Interest rate sensitive banking and realty shares edged higher as the RBI announced a 25 basis points reduction in its key policy rate viz. the repo rate on January 29, 2013. Rise in metal counters too aided the sentiments as stocks like Sesa Goa, Sterlite Technologies, Tata Steel and Coal India edged higher as global metal prices increased. Sentiments also got lifted after export oriented companies like Titan Industries, Arvind and Rajesh Exports all edged higher as Reserve Bank Governor D Subbarao expressed worries over low share of export credit in the books of banks, constituted a technical advisory group to look for solutions to help the sector. However, selling in software and technology counters limited the gains as stocks like Infosys, HCL Technology, Satyam Computers and Mphasis edged lower as rupee rose to its highest level in more than three months on Wednesday on the back of dollar inflows and positive sentiment from a stronger euro. Finally, the BSE Sensex gained 14.10 points or 0.07% to settle at 20,005.00, while the S&P CNX Nifty rose by 5.85 points or 0.10% to end at 6,055.75.