Markets to get a cautious start on F&O expiry day

The Indian markets turned into a consolidation mood in last session and some choppiness too was witnessed. Today, the start of the F&O expiry session is likely to be flat-to-cautious and trade is likely to turn volatile in latter trade, as the expiry is expected to be at higher levels than the present. There will be some buzz in the India Inc and the banking sector, as the Reserve Bank of India (RBI) has barred companies from repaying domestic loans through funds raised through external commercial borrowings (ECBs) from foreign branches of Indian banks. It has also asked the banks to put restrictions on their foreign branches in terms of giving guarantees to offshore joint ventures/subsidiaries of Indian companies to avail of foreign currency loans to repay rupee credit. There will be some cautiousness in the oil & gas sector after Oil Ministry reported that India’s fuel demand rose by its slowest pace in almost 12 years, by a meager 0.7 percent to 158.197 million tons in 2013-14. India had recorded a 6 percent growth in fuel consumption in 2012-13 to 157.057 million tons. Today, there will be lots of important result announcements to keep the markets buzzing. Cairn India, Indiabulls Real Estate, L&T Finance Holdings, M&M Finance, SKF India, Ultratech Cements and Yes Bank are among many to announce their numbers. The US markets ended higher, continuing their gaining streak for yet another day on the back of some positive corporate earnings and some M&A news. Also, there was report of a smaller than expected drop in existing home sales in the month of March. The Asian markets have made mostly a positive start, though the Chinese market has pared the gains after preliminary manufacturing data signaled persisting weakness in the world’s second-largest economy. Back home, after clocking record levels in previous session, Indian equity indices went through consolidation on Tuesday as investors remained on sidelines on the penultimate day of F&O expiry. Benchmark indices moved in a narrow range for the major part of the day with bouts of volatility witnessed during the trade. Earlier, markets made a positive start as election euphoria played its part with international credit rating agency Crisil saying that a stable government post-elections is likely to help the country grow at an average of 6.5 percent for the next five years. However, Crisil said it is not the election results which impact the economy, except in improving sentiment, but policies formulated by the new government that will boost growth. Some support also came on report that foreign institutional investors (FIIs) bought shares worth a net Rs 212.85 crore on April 21, 2014, as per provisional data from the stock exchanges. However, sentiments turned down-beat after Indian rupee fell to its weakest level against the dollar since March 21 weighed down by heavy greenback demand from importers, particularly oil firms, as well as weaker regional currencies. On the global front, merger and acquisition (M&A) talk in the pharmaceutical sector lifted European shares and Asian markets shut shop mostly in the green. Back home, metal stock lost its sheen on profit-booking. Nearly one-and-a-half years after it banned mining in Goa, the Supreme Court on Monday allowed mining in the state, but with an annual cap of 20 million tonnes of iron ore extraction. Tyre shares dropped after tyre major MRF declared weak Q2 result. The company reported a fall of 18.87% in its net profit at Rs 170.87 crore for the quarter ended March 31, 2014 as compared to Rs 210.61 crore for the same quarter in the previous year. Finally, the BSE Sensex ended lower by 6.46 points or 0.03%, to 22758.37, while the CNX Nifty was down by 2.30 points or 0.03% to 6,815.35.