Markets likely to get a weak start on the F&O expiry day

The Indian markets after a round of volatility ended modestly in red in last session on sluggish global cues and economic concern, however there were some good earnings announcements but traders preferred to remain on sidelines. Today, the start is likely to be a bit soft on weak global cues, though the trade may remain choppy, owing to the F&O May series expiry, though there were lots of setbacks during the series but the end is likely to be on a positive note around 6100 Nifty levels. There is likely to be some concern related to economy as the Organization for Economic Cooperation and Development (OECD) has said that the combined gross domestic product of the OECD’s 34 members will grow by 1.2% this year, rather than the 1.4% rate forecast in November. For India it has slashed its growth forecast to 5.3% in 2013 as against its earlier forecast of 5.9%. The power sector stocks are likely to remain in action, as a group of ministers (GoM) has approved setting up of coal regulator that could potentially benefit the power companies that have been strained by the scarcity and poor quality of coal supplied to them. There will be some buzz among the foreign investors too, as the government is examining the possibility of putting in place a formal framework for resolving tax disputes, though traders will be eyeing the movement of rupee, which breached 56 a dollar mark in last session. There will be some action in the PSU oil marketing companies as well, on buzz of price hike due to sharp depreciation in rupee.

Also, there will be lots of important result announcements. Aanjaneya Lifecare, ABG Shipyard, AIA Engineering, Aurobindo Pharma, Berger Paints, Deepak Fertilizers, DLF, EIH, Financial Technologies, Fortis Healthcare, Indian Hotel and IOC are among the many to announce their numbers today.

The US markets ended lower on Wednesday, reversing almost all their previous session gains on worries about the outlook for the Federal Reserve's stimulus program after getting more upbeat economic data and as OECD lowered its forecast for global economic growth in 2013. Most of the Asian markets have made a weak start with the Japanese market suffering cut of over two percent in early trade, as the yen traded near a three-week high and exporters dropped.

Back home, snapping their three days rally, Indian equity indices ended the session slightly in red on Wednesday as investors opted to book their profits on penultimate day of the expiry of May F&O series. Key benchmark indices reversed direction after a positive start in the absence of any positive trigger. Meanwhile, traders remained little concerned, ahead of the government’s announcement of the FY13 GDP numbers on May 31, economists have forecast sub-five per cent readings in the March quarter GDP that takes the overall economic expansion in FY13 to a decade low of around five per cent. Though, after hitting fresh intraday low in early afternoon trade, frontline gauges showed some recovery in late trade on selective buying in heavyweights like Sun Pharmaceuticals, Hero MotoCorp and Coal India. Sentiments also remained down-beat as banking counter declined by over half a percent after Income Tax department issued notices to three top private lenders in the country -- ICICI Bank, Axis Bank and HDFC Bank -- in connection with alleged money laundering charges leveled by online portal Cobrapost. The department has asked these banks to produce documents for verification as part of its tax evasion probe. Global cues too remained sluggish with European markets trading lower as investors remained on sidelines ahead of the release of a raft of economic data. Back home, sentiments also remained somber after the Indian rupee fell by 22 paise to trade at fresh ten-month low of 56.29 against the US dollar during the trade on the Interbank Foreign Exchange due to month-end demand for the US currency from importers and banks. Some pressure also came in from selling in metal space after the International Monetary Fund (IMF) cut its growth forecast for China this year to 7.75% from 8%, citing a weak global economy and exports, adding to concerns that the world's second-largest economy is losing momentum. China is the world's largest consumer of copper and aluminum. However, the downside remain capped as some buying was witnessed in fast moving consumer goods sector after India Meteorological Department (IMD) forecasted that conditions are again favorable for the advance of the southwest monsoon towards India after nearly a week-long lull from May 29, 2013. Finally, the BSE Sensex lost 13.18 points or 0.07% to settle at 20,147.64, while the CNX Nifty declined by 6.95 points or 0.11% to end at 6,104.30.