Markets start F&O expiry session on a cautious note

Extending their southward journey, Indian equity benchmarks have made a choppy start ahead of the expiry of May F&O contracts later today. The markets are likely to remain volatile with traders adjusting positions in the futures & options segment. Sentiment was also affected adversely by data showing foreign institutional investors (FIIs) sold shares worth a net Rs 286.54 crore on May 28, 2014, as per provisional data from the stock exchanges. Global cues too remained sluggish with the US markets ending modestly lower overnight, consolidating and ending a four-day winning streak. Although there were good economic reports but traders opted to book profit after recent gains. The Asian markets too were trading cautiously with some of the indices trading in red in early deals led by the Japanese markets after a report of a worse-than-estimated drop in nation’s retail sales. Japan’s retail sales fell 13.7 percent in April from March, the most in at least 14 years. Back home, on the sectoral front, consumer durables, auto and banking witnessed the maximum gain in trade, while software, technology and realty remained the top losers on the BSE sectoral space. The broader indices, however, were outperforming benchmarks, while the market breadth on the BSE was positive; there were 1,049 shares on the gaining side against 766 shares on the losing side while 43 shares remain unchanged. The market breadth on the BSE was positive; there were 1035 shares on the gaining side against 749 shares on the losing side while 48 shares remain unchanged. The BSE Sensex is currently trading at 24485.25, down by 70.84 points or 0.29% after trading in a range of 24528.20 and 24434.74. There were 15 stocks advancing against 14 declines on the index. The broader indices were traded on mixed note; the BSE Mid cap index was down by 0.29% and Small cap index up by 0.42%. The top gaining sectoral indices on the BSE were, Capital Goods up by 0.49%, Auto up by 0.44%, Bankex up by 0.35%, PSU up by 0.17% and Health Care up by 0.13% while IT down by 2.61%, TECK down by 1.78%, Realty down by 0.63%, Metal down by 0.25%, and Capital Goods up by 0.15% were the top losers. The top gainers on the Sensex were Bharti Airtel up by 2.03%, Mahindra & Mahindra up by 1.28%, Tata Power up by 1.12%,HDFC up by 0.90% and Tata Motors up by 0.72%. On the flip side, Infosys was down by  6.06%, BHEL was down by 1.85%, Hero MotoCorp  was down by 1.38% , Wipro was down by 1.00%  and SSLT was down by 0.65%  were the losers on the Sensex. Meanwhile, with a view to provide importers with greater flexibility in hedging facility, the Reserve Bank of India (RBI) has decided to allow domestic importers to book forward contracts up to 50 percent of the eligible limit under the past performance route. As per the present guidelines relating to hedging of currency risk of probable exposures based on past performance, Indian importers are allowed to book contracts up to 25 percent of the eligible limit. The RBI further notified that importers who have already booked contracts up to previous limit of 25 percent in the current financial year, will be eligible for difference arising out of the enhanced limits. The eligible limit is determined on the basis of average of the previous three financial years' import turnover or the previous year's actual import turnover, whichever is higher. The RBI’s latest move is likely to provide some relief to importers as the depreciation in rupee value increases the imports costs. During the FY14, India’s overall imports declined by 8.11% to $450.95 billion as against $490.74 billion reported in the same period of previous fiscal year. Contraction in domestic imports during FY14 was mainly driven by weak domestic demand and lower gold imports. The CNX Nifty is currently trading at 7,317.35 down by 12.30 points or 0.17% after trading in a range of 7,325.40 and 7,302.50. There were 31 stocks advancing against 19 declines on the index. The top gainers of the Nifty were Ultra Cement up by 3.22%, Grasim up by 1.83%, Bank Baroda up by 1.79%, Bharti Airtel up by 1.74% and Kotak Bank up by 1.33%. On the flip side, BHEL down by 1.89%, Infosys down by 1.54%, Hero Moto Company down by 1.40%, HCL Tech down by 1.06% and Coal India down by 1.03% were the top losers on the index. Most of Asian markets were trading in green; Shanghai Composite improved 0.31 points or 0.02% points or 2,050.54, Hang Seng gained 92.30 points or 0.40% to 23,172.33, Jakarta Composite surged 21.65 points or 0.44% to 4,985.58, KLSE Composite strengthened by 5.52 points or 0.29% to 1,877.18, Nikkei 225 spurted by 8.85 points or 0.06% to 14,679.80 and Straits Times was up by 30.07 points or 0.92% to 3,301.91. On the flip side, Seoul Composite declined 5.78 points or 0.29% to 2,011.28 and Taiwan Weighted was down by 8.37 points or 0.09% to 9,113.34.