F&O Expiry: Markets Set for A Positive Start!

Welcome to last trading session of the October month! It also happens to be the last trading session of the October F&O series. This month has been a favourable month for the bulls as Nifty has logged gains of approximately 3 per cent with improved market breadth. The bulls would like to end the month on a high note and extend their lead. With BSE Sensex, already managing to close above its important psychological 40,000 level, it is the time for Nifty to reclaim its magical 12,000 mark. The global sentiments are upbeat and the Fed rate cut should work in favour of our markets as it paves the way for another rate cut by the RBI, when it meets next in the December, and that should be music to bull’s ears. The Thursday morning promises a smiling start for the markets, with SGX Nifty trading higher by 37 points at 11,888 levels. However, we believe the volatility will rule the roost on the D-Street through the day amid the October derivative series expiry; however, the bias remains positive.

On Thursday, the Asian markets are seen cheering the US Fed decision to slash its benchmark fund rate by 25 basis points, the third cut this year. Hong Kong’s Hang Seng has surged 0.97 per cent, followed by Japan’s Nikkei 225 and China’s Shanghai Composite.

Back home, the market opened the session with a gap-up and in the initial hour of the session, key indices completely filled in the opening gap. Thereafter, it was stuck in a narrow range with positive bias and, as a result, the markets extended their up move for the fourth session straight. BSE Sensex closed above important psychological mark of 40,000 and Nifty ended shy of 11,850 mark at 11,844 levels. In the broader market, Nifty Midcap surged 0.64 per cent and outperformed the frontline gauges while Nifty Smallcap closed with a gain of 0.35 per cent. On the sectoral front, Nifty PSU Bank was the top gainer, closely followed by Nifty IT and Nifty FMCG. On the flipside, Nifty Media, Nifty Realty, and Nifty Auto were the top decliners. The market breadth was in the favor of gainers.

The US markets fared well last evening, with stocks turning higher following the Federal Reserve’s interest rate announcement. The central bank slashed interest rates by another 25 bps, making this the third reduction this year. However, the bank hinted that further easing may not be so forthcoming. Meanwhile, news on the economic front, which took second fiddle to the Fed decision, was cheerful as better-than-expected Q3 GDP growth united with a positive ADP employment report. At the closing bell, the Dow advanced 115 points, the S&P 500 closed up by 10 points, and the NASDAQ gained 27 points. European indices ended Wednesday’s session on a mixed note as investors digested a host of earnings report and the UK prepared itself for a December 12 general election.