Markets to get a cautious start of the penultimate day of F&O expiry

The Indian markets extended their gaining streak in last session supported by some upbeat earnings announcement and positive sentiments generated by the government on its stand on reforms, after Prime Minister Manmohan Singh said that India's fundamentals are intact and the country will revert to 8 percent growth path. On his Japanese trip he also assured business leaders that India would be taking more steps to attract foreign investments. Today, the start of the penultimate day of the expiry of May F&O series is likely to be cautious and lots of volatility can be expected in latter trade. There will be some buzz in the Cable TV operators and DTH service providers, as the Telecom Regulatory Authority of India (Trai) has revised the tariff for DTH, cable TV. The aviation sector too is likely to remain in action, as the civil aviation ministry is considering a proposal to allow scheduled regional airlines to induct smaller aircraft for deployment on regional routes.

Also, there will be lots of result reactions of earnings announced after the market hours and lots of important result announcements. Aditya Birla Nuvo, Alok Inds, BGR Energy, BPCL, Canara Bank, Cipla, Eveready Inds,  HDIL,  J Kumar Infra, MCX, Mcnally Bharat, NMDC, Shree Renuka Sugars, SJVN and Tata Motors are among the many to announce their numbers today.

The US markets showed a jubilant performance on Tuesday, coming after a long weekend. Though, there was some pull back in late trade but major indices managed to remain firmly positive on slew of upbeat economic data. Consumer confidence jumped to a five-year high in May, while home prices in major metropolitan areas rose more than expected. Most of the Asian markets have made a positive start taking lead from the US markets; however the Hang Seng market has lost about a percent in early trade due to decline in developers on concern of slowing city home sales.

Back home, Indian equity markets continued their northward journey for third consecutive day as investors piled up positions in risky assets on the back of firm global cues. The benchmarks, after an hour of positive start, turned negative mainly due to profit booking. But, buying which emerged in second half mainly acted as saving grace for domestic equity markets. Frontline indices tested the psychological 6,150 (Nifty) and 20,200 (Sensex) levels in the session and met with stern resistance around those levels but managed to finish the session with a gain of over half a percent and settled comfortably above 6,100 (Nifty) and 20,150 (Sensex) levels as investors took to hefty across the board buying. Some strength to the markets also came in from Finance Minister P Chidambaram’s statement that regardless of any government at the Centre the country will grow by 5-6 per cent, but to reach the brisk rate of 8 or 9 per cent effective governance is needed. Sentiments also remained upbeat after Coal India reported better than expected fourth quarter numbers. The company, on consolidated basis, has reported 34.90% jump in its net profit after taxes, minority interest and share of associates at Rs 5413.91 crore in Q4FY13 as compared to net profit of Rs 4013.41 crore in the same quarter previous year. Global cues too remained supportive as European markets traded firmly in early deals on hopes that global central banks would continue their stimulus measures to boost economy. Back home, some strength came in from PSU sector, which rose about one and a half percent as the government is working out norms for utilization of surplus funds of cash-rich PSUs with a view to boost investment and promote growth. Some buying was also seen in selected stocks from fast moving consumer goods sector on report that the monsoon is expected to hit Northeastern states in 3-4 days. Monsoon had brought its first showers to the Andaman Sea on May 17, three days before the normal onset date. Additionally, index heavyweight Reliance Industries (RIL) advanced for second day in a row after the company along with partners announced huge gas discovery in KG-D6 block. Finally, the BSE Sensex gained 130.05 points or 0.65% to settle at 20,160.82, while the CNX Nifty rose by 28.10 points or 0.46% to end at 6,111.25.