Markets to get a positive start on penultimate day of F&O expiry

The Indian markets came into consolidation mood in last session, mainly on the back of development in the oil & gas sector after EC’s deferral of gas pricing. Today, the start is likely to be in green and the markets may once again move to the gaining trajectory, a day ahead of the F&O series expiry taking cues from the upbeat global cues. Meanwhile, Oil Minister M Veerappa Moily, a day after the Election Commission asked the government to delay the doubling of natural gas prices until the completion of elections has said that top law officers will examine the order before the next course of action is decided. However, there will be some somberness in the export oriented stocks as Commerce and Industry Minister Anand Sharma has said that Indian exports will fall short of the $325 billion target envisaged in the current fiscal. On the other hand the rate sensitives may get some respite with spreading sense that Reserve Bank of India (RBI) will keep the rates unchanged. Credit rating agencies expect the Reserve Bank of India to maintain the status quo on interest rates in its upcoming policy review. Also, the recent gains made by the rupee are a positive for lower rates as this reduces the scope for imported inflation.

The US markets ended mostly higher on getting good report from the Conference Board, showing a significant improvement in consumer confidence in the month of March. The Asian markets have started mostly in green buoyed by the optimism about the outlook for the world’s biggest economy.

Back home, after hitting fresh all time closing highs in last session, Indian equity benchmarks witnessed consolidation on Tuesday. Domestic bourses traded in very-tight band throughout the session and ended the choppy day of trade almost flat. Overall, sentiments remained cautious after the Election Commission sought deferment of the price hike till elections are over. It has been reported that after deliberating gas pricing once again and taking into account government’s version, the EC decided to defer a decision on the contentious issue as the matter was pending in the SC. Meanwhile, the Commerce and Industry Ministry too is concerned over whether its proposals for easing foreign direct investment (FDI) rules in railways and construction development sectors will get EC nod. On the positive front, Economic Affairs Secretary Arvind Mayaram stated that the Finance Ministry expects economic growth to further improve in the next fiscal on the back of better macro-economic fundamentals. Appreciation in Indian rupee too encouraged the equity markets after it turned to more than seven months high. On the global front, Asian markets ended mostly in the red as investors weighed the prospect of a recession in Russia. However, European counters traded with traction in early deals, as investors waited for fresh US housing and confidence data to gauge if the US economy is recovering from the extreme winter. Back home, there was some weakness seen in the stocks hopeful for new banking licenses as the Election Commission may put its spanner in granting of banking licenses by the Reserve Bank of India (RBI) till the election is over. Software and Technology counters too witnessed selling pressure as rupee edged higher against the dollar. On the flip side, shares of tyre companies like, Ceat, Goodyear India, JK Tyre, Apollo Tyres and TVS Srichakra continued their northward journey and edged higher in the range of 1-7 percent with heavy volumes, on hopes of higher margins due to fall in rubber prices. Additionally, stocks related to fertilizers space too remained on buyers’ radar on reports the Election Commission has ordered deferment of an increase in gas prices that was to take effect from April 1, 2014. Finally, the BSE Sensex was down by 0.27 points to settle at 22055.21, while the CNX Nifty added 6.25 points or 0.09% to settle at 6,589.75.