Markets to make a cautious start on the penultimate day of April series expiry

The Indian markets continued their jubilant run with a rally of around a percent on Monday. Despite political jitters and mixed earnings, traders lapped up stocks at attractive valuation, expecting further upmove. Today, the start is likely to be cautious as the Asian peers have slipped into red, there is likely to be volatility in the markets too, as due to a market holiday on Wednesday it’s the penultimate day of April series expiry and lots of rollover and adjustments will take place. The power and oil & gas sector is likely to remain buzzing after the Cabinet Committee on Investment (CCI) cleared 25 exploration and production blocks out of the 31 blocks where work had been stalled on account of security restrictions. The panel also approved 13 power projects entailing investments worth Rs 33,000 crore that were stuck due to various reasons. However, the Cabinet Committee on Economic Affairs has dropped the proposal to pool prices of imported and domestic coal to make the fuel affordable to new power plants. The mood is also likely to be impacted with a report that foreign direct investment (FDI) in the country dipped by 19% at $1.79 billion in February.

There will be some important result announcements too, to keep the markets buzzing. AP Paper, HDFC Bank, Indiabulls Securities, Mahindra & Mahindra Financials and Coromandel International will be announcing their numbers today.

The US markets closed higher on Monday supported by the latest batch of earnings news from some big companies, while the technology and resource stocks firmed up after witnessing steep losses last week. Most of the Asian markets are trading soft after a positive start, as China’s flash April PMI showed that manufacturing expanded less than estimated in the country. Japanese shares too were witnessing some profit booking at its five years high after yen failed to break through 100 to the dollar.

Back home, buoyed by firm global cues, key domestic benchmarks showcased an enthusiastic performance on first day of F&O expiry week of April series. Frontline indices conquered their crucial 5,800 (Nifty) and 19,150 (Sensex) bastions, hitting their highest level in almost five weeks, supported by rally in rate-sensitive sectors such as banks, real-estate and auto amid hopes that the central bank would ease monetary policy more aggressively next month to boost growth into the Asia’s third-biggest economy. Back on street, after a cautious start, markets soon entered into green terrain with investors turning optimistic after data showed that foreign funds remained net buyers of Indian stocks on April 18, 2013. Foreign institutional investors (FIIs) bought shares worth a net Rs 940.07 crore on Thursday. Some profit booking was witnessed during the trade after the second part of the Budget session of Parliament began on a stormy note as members from various parties forced adjournment of Lok Sabha on various issues, including heckling of Mamata Banerjee, incidents of rapes and demand for separate Telangana. But, markets managed to trade above their crucial levels supported by buying in capital goods and metal counters. The local gauges extended their gains in noon deals as European counters traded firmly after a positive start on Monday with Italian shares posting the biggest gains after the Italian parliament over the weekend re-elected Giorgio Napolitano as president. Back home, continued buying in banking stocks helped benchmarks to end near intraday high. Scrips like, SBI, PNB, ICICI Bank, HDFC Bank Axis Bank and IDBI Bank edged higher as the Reserve Bank of India (RBI) is likely to cut interest rates next week for a third time this year, drawing comfort from a fall in inflation as it seeks to help lift the economy from its lowest growth in a decade. Rally in stocks from power sector too aided the sentiments as the government is likely to take a final decision on the blending of prices of imported coal and domestically-produced fuel or price pooling of coal. Additionally, FMCG counters garnered gain of over half a percent on reports of likely normal monsoon this year. On the flip side, shares of software stocks declined after Wipro’s issuing weak Q1 revenue outlook. company is expecting revenues from its IT services business to be in the range of $ 1.575-1.610 billion for the first quarter (April-June) of the current fiscal. Though, the company reported 16.73% increase in net profit to Rs 1,728.7 crore for the fourth quarter ended March 31, 2013 as against Rs 1,480.9 crore in the year-ago period. Finally, the BSE Sensex gained 153.37 points or 0.81% to settle at 19169.83, while the CNX Nifty rose by 51.30 points or 0.89% to end at 5,834.40.