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

The Indian markets surged around a percent in last session taking cues from the global markets. Today, the start of the holiday truncated F&O expiry week is likely to be a bit cautious and some volatility too can be expected, as the derivative expiry is schedule a day ahead of the usual. However, traders will be getting some support with Prime Minister’s Economic Advisory Council (PMEAC) Chairman C Rangarajan’s statement that India's Current Account Deficit (CAD) is expected to be around two percent of GDP during the current fiscal on the back of slackening imports and increased shipments. Meanwhile, RBI Governor Raghuram Rajan has said that the central banks of developed nations must also keep in mind emerging nations while framing monetary policies, though he asserted that India is well placed to weather financial crisis. There will be some action in the steel sector stocks, as the Union Steel Secretary G Mohan Kumar has said that Centre is not in favour of closing down some of operational iron ore mines in the wake of Justice M B Shah Commission report on illegal mining activities in Odisha. The power stocks too may see some action as the Central Electricity Regulatory Commission (CERC) has allowed higher tariff as well as compensation of Rs 329.45 crore for Tata Power's 4,000 MW Mundra project in Gujarat, the decision may pave way for tariff hike in five states.

The US markets ended modestly lower in last session on getting weak housing starts data, previously owned homes sales declined 5.1 percent in January. The Asian markets have made mostly a soft start with Chinese shares in the mainland and Hong Kong suffering major plunge on reports of property-lending curbs.

Back home, Friday proved a good day of trade for the Indian markets when the benchmarks reversing their last session's fall posted good gains, though they fell short of recovering all their losses but still managed to post decent gains for the week. Once again the guiding factor was the global markets, albeit positive for the day which helped the domestic markets to remain in fine shape. The gains were spread across the sectors, however, banking that had suffered sharp profit booking in last session showed remarkable come back and strengthened the market. Earlier, the markets made a positive start after US indices ended higher overnight on getting report of preliminary manufacturing index, The Asian markets outside China too made decent gains, while the European markets made a cautious but positive start. Back home, the market showed a steady trade going to the F&O expiry week, there was not even iota of profit booking seen throughout the trade and benchmarks once after acquiring a high range kept gyrating within the limits. The good thing of the trade was that not only the blue-chips but the broader indices equally participated in the upmove. Traders were encouraged by the International Monetary Fund (IMF) revising its previous forecast of GDP growth upwards to a 4.6 per cent in FY14 and an improvement to 5.4 per cent in FY15. However, it has recommended India to go for more interest rate hikes to tackle high inflation and its expectations. On the sectoral front, all the beaten down sector showed smart recovery and banking along with Capital Goods, IT and FMCG surged by over a percent. In non sectoral gauges the Cement sector stocks were in most jubilant mood on some reports of rise in cement prices across the region.ACC was up by 6%, UltraTech Cements gained 5.29% and Ambuja Cements surged by 6.16%. On the other hand the telecom stocks remained in somber mood since beginning on some brokerage downgrade after the intense bidding in the recent 2G auction and after the Department of Telecom issued the much-awaited guidelines for merger and acquisition (M&A) in the industry. The operators have said that the clause that merged entity would need to pay the market price for the entire spectrum holding minus the entry fee already paid by the seller would increase M&A costs and potentially scuttle a lot of deals. Finally, the BSE Sensex gained 164.11 points or 0.80%, to settle at 20,700.75, while the CNX Nifty added 64.00 points or 1.05% to settle at 6,155.45.