Markets to get a soft-to-cautious start of the F&O expiry week

The Indian markets witnessed mild recovery in last session and the major indices managed a positive close after four sessions of decline. Today, the start of the crucial F&O expiry week is likely to be cautious and the benchmarks may begin on a slightly soft note, though traders will be getting some support with Prime Minister Manmohan Singh’s statement that government is trying to remove investment bottlenecks, which is holding up the growth and further added that India’s economic growth would accelerate to 6-6.5 percent in the current financial year as compared to around five percent growth registered in the previous year. There will be buzz in the oil and gas space along with fertilizers, ahead of an Empowered Group of Ministers (EGoM) meet on Tuesday to consider abolishing the priority ranking in natural gas allocation so that fuel currently consumed by urea plants can also be diverted to fuel-starved power plants.PSU stocks too will see some action, as the government is working out norms for utilisation of surplus funds of cash-rich PSUs with a view to boost investment and promote growth.

There will be lots of important result announcements and some result reaction of earnings announced during weekend.  Ansal Properties, Bhushan Steel, Everest Kanto, Jindal Saw, Jindal Stainless, JK Tyre, Lakshmi Vilas Bank, Mcleod Russel, Tata Chemicals, TV Today and Wockhardt are among the many to announce their numbers today.

The US markets mostly ended in red on Friday, though there was some recovery on getting good durable goods orders but concern about Federal Reserve withdrawing stimulus kept looming large. The Asian markets have made a mixed start, while the Chinese markets has gained strength after the Chinese President Xi Jinping said that the country won’t sacrifice environment for short term growth, on the other hand the Japanese market plunged again after top central banker highlighted concern that 2% price goal may be elusive.

Back home, Indian equity indices witnessed consolidation in a volatile session of trade after four straight days of decline as investors opted to remain on the side-lines after yesterday’s crash in global markets amid brewing concerns that the US Federal Reserve may withdraw stimulus earlier than expected. Though, markets after a positive opening suddenly entered into red in early trade owing to the decline in Japanese market with the Nikkei coming off over 2 per cent from the day’s high. But, the key gauges found strong supports around the crucial 5,950 (Nifty) and 19,650 (Sensex) levels on the downside and rebounded from those levels. Market participants were seen piling up positions largely across the board as they hunted for undervalued but fundamentally strong bargains after the recent sell-off. Both the frontline gauges managed to keep their head above water at the end after changing directions several times during the trade. Global cues remained mixed with European counters opening in red despite better-than-expected German business confidence data, while, most of the Asian equity indices ended the session in the positive terrain. Back home, foreign institutional investors (FIIs) bought shares worth a net Rs 316.23 crore on May 23, 2013. Sentiment also got some boost from Finance Minister P Chidambaram’s statement that there is no need for any kind of nervousness. He said the Indian markets should read the situation correctly rather than be influenced by something elsewhere. Some support also came in after India’s largest steel maker by sales -- Tata Steel -- surged as its March-quarter operating profit beat streets expectation. The company’s consolidated earnings before interest, taxation, depreciation and amortization (EBITDA) rose 27.75 per cent to Rs 4368 crore in Q4 March 2013 over Q4 FY12. Sentiments also remained upbeat after shares in Wockhardt recovered substantial ground after plummeting 19 per cent in intra-day trade, lowest since August 2012, after the US Food and Drug Administration imposed an ‘import alert’ on a plant operated by the generic drug maker. Finally, the BSE Sensex gained 30.00 points or 0.15% to settle at 19,704.33, while the CNX Nifty rose by 16.50 points or 0.28% to end at 5,983.55.