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

The Indian markets started celebrating Diwali well in advance and the markets neared their all time high in last session, though the economic condition is still not very soothing but traders are getting enough reason to cheer with relentless buying by the FIIs. Today, the start is likely to be in green but being the expiry of long and heavy October month’s F&O series, lots of volatility can be expected as the trade progress. Markets will keep buzzing with the recommendations of expert panel headed by former Planning Commission member Kirit S Parikh who has suggested that Diesel prices should be hiked by a steep Rs 5 per litre, kerosene by Rs 4 a litre and cooking gas (LPG) rates by Rs 250 per cylinder immediately to cut fuel subsidy bill by Rs 72,000 crore. Also, it suggested that the number of subsidised cooking gas cylinders supplied to households in a year should be cut to 6 bottles of 14.2-kg from the current quota of 9. Meanwhile, the Reserve Bank Governor Raghuram Rajan has said that India now is in a better position to face the US Federal Reserve’s unwinding of its easy money policy whenever it takes place. Meanwhile, there will be some action in the mining and mineral stocks as there is likely to be more delay in mining permission with the Supreme Court saying that it may consider constituting one or two panels for looking into various aspects of iron ore mining in Goa including fixation of annual cap over the volume of extractions.

There will be lots of result announcements too, to keep the markets buzzing. 3M India, Adani Enterprises, Allahabad Bank, Aptech, Balrampur Chini, BOB, Century Textiles, Dr Reddys Lab, Future Retail, Glenmark Pharma, HCC, IDFC, Jindal Saw, Kalpataru Power and Muthoot Finance are among the many to announce their numbers.   

The US markets ended lower after getting some weak economic numbers, though as expected the Fed maintained the pace of its asset purchases at $85 billion a month but its statement with the policy were less dovish and excluded any reference to the recent government shutdown. The Asian markets have mostly started in red as the Fed indicated that it may start paring stimulus sooner than previously forecast.

Back home, jubilation continued on Dalal Street for second day in a row, with Indian equity benchmarks ending the session with gain of over half a percent on the penultimate session of F&O expiry. Market traded in the green throughout the session on the back of in-line expectation RBI’s policy review. Positive global-set-up also added to the investors’ sentiments. There was broad based buying witnessed in the markets and apart from the blue chips, the broader markets too equally participated in the rally. Though, investors booked some profit off the table towards the end of the session, but markets managed to end at their highest level in nearly three years and both the benchmarks scaled past the psychological levels of 21,000 (Sensex) and 6,250 (Nifty). Supportive cues from US markets provided early support to local markets and sentiments remained up-beat on optimism that the Federal Reserve after its two-day policy meeting will maintain its asset purchase program. Rally in Asian markets too boosted the traders’ moral with Japanese Nikkei surging over a percent. Moreover, buying in stocks of public sector oil marketing companies (OMCs) viz. BPCL, HPCL and IOC too aided the sentiments as the Kirit S. Parikh Committee’s report on pricing diesel, domestic LPG, and PDS kerosene recommended an immediate increase in diesel prices by at least Rs 4 a litre and, thereafter, doubling the current pace of increase in diesel prices to Re1 per month. However, gains on the up-side remained capped after the rupee depreciated against the US dollar in early trades and traded at Rs 61.49 compared to its previous close of Rs 61.32. Some cautiousness also crept in after India Inc raised apprehension saying that hike in key interest rate by the Reserve Bank of India will hit the already weak investment momentum and impact India’s economic growth. Also, there will be some concern in coal and mining stocks as it has been reported that the auction of coal blocks to private firms may get further delayed to March next year as the Coal Ministry has sought from consultancy firm CMPDIL a report on reserves of four more mines. Finally, the BSE Sensex surged by 104.96 points or 0.50%, to settle at 21033.97, while the CNX Nifty added 30.80 points or 0.50% to settle at 6,251.70.