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Markets to make cautious start of F&O series expiry week
Jun-24-2019

Indian markets ended sharply lower on Friday with losses of around a per cent, dragged by auto, banking and pharma stocks, as global sentiment remained negative. Today, the start of the crucial F&O series expiry week is likely to be a bit cautious amid weakness in Asian peers coupled with higher crude oil prices. There will be some cautiousness with the Finance Ministry’s report that government's total liabilities reached Rs 84.68 lakh crore at the end of March 2019, up 1.5 per cent over the preceding quarter. The total liabilities stood at Rs 83.40 lakh crore at end-December 2018. Traders will also be concerned about FICCI’s report that the outlook for the country's manufacturing sector in the April-June quarter of the current fiscal has moderated as only 41 per cent of respondents in its survey expected higher output growth during the ongoing quarter compared to 54 per cent in the January-March quarter. However, some respite may come later in the day with report that investments in the Indian capital market through participatory notes increased by nearly Rs 1,400 crore to Rs 82,619 crore till May-end, a gain of 1.72 percent over the previous month. Also, the GST Council extended the tenure of the anti-profiteering authority by two years till November 2021 and allowed use of Aadhaar as proof for obtaining GST registration while referring tax cut on electric vehicles and their chargers to an officers' committee. Besides, Think tank Niti Aayog said that expert panel for macroeconomics and employment came out with suggestions to achieve $ 5-trillion economy target. Improvement of governance in PSU banks, enhancing growth rate of exports & employment generation were some of the key areas identified. Meanwhile, Department of Expenditure (DoE) figures showed that fiscal deficit for the month of April was at Rs 1,57,048 crore which is 22 per cent of the budgeted estimate for the year 2019-20, slightly lower than what it was in the same period a year ago and as a percentage to the GDP, the fiscal deficit is at 0.75 per cent. There will be some reaction  in insurance stocks with report that the government is exploring various consolidation options including the merger of state-owned general insurance companies with New India Assurance with a view to create synergy and unlock value.

The US markets ended lower on Friday amid heightened tensions between Iran and the US, but losses remain chapped as investors continue to cheer the Federal Reserve’s shift to a more dovish stance. Asian markets are trading mixed on Monday as tensions between the US and Iran lingered after the latter shot down an American surveillance drone.

Back home, Friday turned out to be a horrible day for the Indian equity markets, as both the larger peers, Sensex and Nifty closing lower by over 400 and 100 points, respectively. The markets made a weak start of the day, affected by Reserve Bank of India Governor Shaktikanta Das’ statement that the Indian economy has been clearly losing traction and needs a decisive monetary policy to promote growth. He also favoured shifting the stance of monetary policy from neutral to accommodative to send a clear signal, indicating that more measures could be taken in the near future to boost growth. Traders were also worried with the Reserve Bank of India’s (RBI) report stating that both bank credit and deposits slowed to 9.92 percent and 12.31 percent at Rs 96.52 lakh crore and Rs 125.40 lakh crore, respectively, for the fortnight ending June 7. Key Indices remained under the grip of bears throughout the day, with a report indicating that the merger and acquisition activity recorded an 87 percent fall in terms of value and a 27 per cent drop in volume last month, due to weakness in the rupee, spike in crude oil prices and indecisiveness among investors until results of the general elections. The street paid no heed towards the Retirement fund body, Employment Provident Fund Organisation’s (EPFO) latest Provisional Estimate of Net Payroll data report which showed that India created 10,43,044 new jobs in the first month of current fiscal i.e. April 2019. The job creation for the last fiscal (2018-19) stood at 61,12,223. Finally, the BSE Sensex lost 407.14 points or 1.03% to 39,194.49, while the CNX Nifty was down by 107.65 points or 0.91% to 11,724.10.
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