Markets likely to get cautious start ahead of F&O expiry

Indian markets fluctuated before ending marginally lower on Tuesday despite positive cues from global markets. Today, markets are likely to get cautious start amid mixed cues from the global markets as a deal between First Citizens BancShares and Silicon Valley Bank (SVB) brought a sigh of relief to investors rocked by wild swings in banking shares but caution persisted about higher-for-longer interest rates. There will be some volatility in the markets ahead of F&O expiry later in the day. Market participants may remain on sidelines ahead of holiday on Thursday on account of Ram Navami. However, foreign fund inflows likely to aid domestic sentiments. Foreign institutional investors (FII) bought shares worth Rs 1,531.13 crore on March 28, National Stock Exchange’s provisional data showed. Traders will be taking encouragement as Union Commerce & Industry Minister Piyush Goyal said Indian goods and services exports have crossed the $750 billion-mark for the first time. In 2021-22, the country's goods and services exports touched an all-time high of $422 billion and $254 billion respectively, taking the total shipments to $676 billion. Some support will come with a private report that India and China will contribute to half of the world's growth this year, and it highlighted that Asia will remain a crucial growth engine with an estimated 4.5 per cent GDP expansion, making it a standout performer amidst the global economic slowdown. Traders may take note of Fitch Ratings’ statement that even as the Union Budget has outlined a Rs 10 trillion capital expenditure plan for 2023-24 to spur growth, domestic companies are likely to see a 10% to 12% increase in capital expenditure in the coming fiscal. There will be some reaction in logistics industry stocks as Union Home Minister Amit Shah said the government is working to bring down logistics cost to GDP to 7.5 per cent from the current 13 per cent. He said the logistics cost in India is 13 per cent to the GDP as compared eight per cent in the rest of the world, making it difficult for Indian exports to compete globally.

The US markets ended lower on Tuesday as investors weighed comments from a top US regulator on struggling banks and sold shares of technology-related names after their recent strong run. Asian markets are trading mostly in green on Wednesday with Hong Kong markets rallying after tech giant Alibaba announced it would split into six business groups.

Back home, Indian equity benchmarks ended marginally in the red on Tuesday, as caution prevailed ahead of the F&O expiry on Wednesday. Markets made a positive start as traders took some support with SBI Research in its latest Ecowrap report stating that the Reserve Bank of India (RBI) is expected to pause their interest rate hike and the current 6.5 per cent repo rate could be the terminal rate for now. The next monetary policy meeting is scheduled for the first week of April 2023. Some support also came with Commerce Secretary Sunil Barthwal’s statement that India will be looking to push the rupee trade agenda in the G-20 meetings it is organising as part of its ongoing presidency of the forum. He added rupee trade will be of help, especially with those countries whose currencies are under pressure. But, key gauges soon erased gains and traded volatile, as foreign fund outflows dented the domestic sentiments. FPIs returned to their old ways by selling shares to the tune of Rs 890 crore on March 27. Traders were also seen taking a note of report that the finance ministry has asked public sector banks (PSBs) to do proper monitoring of top loans and make adequate provisions for pledged shares of big corporates in view of the current global financial scenario emanating from the failure of some international banks in the US and Europe. Meanwhile, Markets regulator Sebi has simplified the procedural requirements for onboarding of Foreign Portfolio Investors (FPIs) in a bid to facilitate ease of doing business and to reduce the time taken for their registration. Finally, the BSE Sensex fell 40.14 points or 0.07% to 57,613.72 and the CNX Nifty was down by 34.00 points or 0.20% to 16,951.70.