Markets to start the F&O expiry week on a flat-to-cautious note

Indian markets turned bullish ahead of the long weekend and posted gains of over one and half a percent in the last session. Today, the start of the holiday truncated F&O expiry week is likely to be cautious and some volatility is expected in the latter part of the trade. Traders will be reacting to the Reliance Industries results announced before the weekend. The company has reported net profit rise of 4.7 per cent to Rs 21,984 crore for the full financial year rose, the highest by any private sector firm in the country. There will be some cautiousness in the market with global ratings agency Crisil saying that it may not be easy for India to return to 9% growth during 2014-2019 and instead settle for an average 6.5% growth, provided there is a stable government at the Centre. There will be some somberness in the gems and jewellery stocks as Indian exports of gems and jewellery, which contributes about 15 percent of the country’s overseas shipments, fell by about 9 percent to $39.5 billion in 2013-14. There will be some buzz in fertilizers stocks too, amid buzz that the Fertiliser Ministry has called a meeting of companies charging higher prices for phosphatic and potassic (P&K) fertilizers. There will be some result announcements too, to keep the markets ticking. Hindustan Zinc, LIC Housing Finance, Supreme Petro and HEG are among the important ones to announce their numbers today. The US markets ended higher on Thursday on good reports of unemployment benefit and Philadelphia region manufacturing data. The Asian markets have made a mixed start, though the Japanese market was trading high with the support of weakness in yen after country’s trade deficit widened more than forecast last month. Back home, boisterous benchmarks, snapping three days losing streak, staged an enthusiastic performance on Thursday by rallying over one and a half percentage point and breaking lots of psychological levels in their northward rally. Sentiments remained up-beat since start, as key bourses opened with decent gains and there appeared not even an iota of profit booking in the session and the benchmarks managed to fervently gain from strength to strength as investors continued their hunt for fundamentally strong stocks. Investors’ confidence got boost after Standard and Poor’s said it may upgrade India’s sovereign outlook if the government that is elected next month addresses some of the country’s economic challenges, including approving the proposed goods and services tax. Some support also came after the Reserve Bank of India (RBI) fully sold Rs 20,000 crore ($3.31 billion) worth of debt on offer, accomplishing the country’s biggest-ever auction. Also, better-than-expected fourth quarter earnings from Tata Consultancy Services (TCS) and HCL Tech’s Q3 stellar performance boosted sentiment. TCS reported a 48.2% jump in consolidated net profit to Rs 5,357.6 crore for the quarter ended March 31, helped by growth in Europe and APAC and investments in digital technologies, while HCL Technologies posted a jump of 69.67% in its net profit at Rs 1412.54 crore for the quarter ended March 31, 2014 as compared to Rs 832.96 crore for the same quarter in the previous year. On the global front, supportive cues from US markets provided much needed support to local markets, while the Asian markets exhibited mixed trend on Thursday, however European counters were trading in the red in early deals. Finally, the BSE Sensex surged by 351.61 points or 1.58%, to settle at 22628.84, while the CNX Nifty gained 104.10 points or 1.56% to settle at 6 6,779.40.