Markets to make a positive start of the F&O expiry week

The Indian markets outperforming their regional peers have been maintaining their upmove amid strong inflow of foreign money. Today, the start of the crucial F&O expiry week is likely to be in green, traders will be getting some support with the report that retail inflation for farm workers and rural labourers eased to 8.14 percent and 8.27 percent respectively in February from 9.08 percent and 9.21 percent in January, mainly due to decrease in prices of food items. Meanwhile, Planning Commission Deputy Chairman Montek Singh Ahluwalia has exuded confidence that whoever forms the next government would be in a position to implement key reforms, including the Goods and Services Tax (GST). There will be some action in infra stocks after projects to build 2,500 km of highways have been cancelled. Because of the economic slowdown, firms did not respond to many bids that were floated by the NHAI. There will be some buzz in the iron and steel stocks too, on report that India’s steel production declined 3.2 per cent while globally it averaged a 0.6 per cent rise in February mainly due to higher Chinese output.

The US markets ended modestly lower in last session on possibility of further developments in the Ukraine crisis over the weekend. Though, there was positive news of Fitch Ratings affirming US long-term foreign and local currency credit ratings but traders preferred to remain on sidelines. The Asian markets have mostly made a positive start and have largely shrugged off the unexpected fall in the preliminary Chinese manufacturing survey.

Back home, Indian equity benchmarks ended the choppy day of trade slightly in the green on Friday. Frontline gauges traded in the tight-band throughout the session. Though, markets made gap up opening supported by Moody’s Analytics report that projected the ouster of the UPA government after a disappointing second term, saying that the BJP is likely to form the next government after the general elections. However, gains remained capped on report that foreign direct investment (FDI) into India grew by a meager 1.5 percent to $2.18 billion in January and for the April-January period; foreign investment inflows dipped 2 percent to $18.74 billion from $19.1 billion during the corresponding period of the previous fiscal. Traders also remained concerned with Reserve Bank Governor Raghuram Rajan’s statement that central bank is yet to move to inflation targeting and is still in discussions with the government on the same; he also reiterated his preference for targeting retail price inflation. On the global front, most of the Asian equity indices ended in the green led by Chinese benchmark, which rose around three percent, most in five months on signs of US economic strength. European markets too traded in the green. Back home, continuous buying from foreign institutions supported the gains with FIIs buying shares worth a net Rs 722.02 crore on March 20, 2014. Meanwhile, software and technology stocks viz. Infosys, TCS, Wipro and HCL Technologies all edged higher after reports on leading indicators and regional manufacturing fueled optimism in the US economy. Additionally, shares of tyre companies like, Ceat, MRF, Goodyear India, JK Tyre, Apollo Tyres and TVS Srichakra, remained on buyers’ radar on back of heavy volumes. On the flip side, upstream oil companies especially Reliance Industries and ONGC remained under pressure, as the government is yet to notify the new price for domestically produced gas and there might be a delay in the announcement. There was special short trading session on Saturday March 22, as BSE was to rebalance its four indices viz; S&P BSE IPO, 500 Shariah, Mid Cap and Small Cap with effect from March 24. The trading remained choppy and ended flat. Finally BSE Sensex ended at 21755.32, up by 1.57 points or 0.01%, while the Nifty ended higher by 1.70 points or 0.03% at 6,494.90.