F&O Expiry ahead :CSEC Research

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F&O Expiry ahead

Budget impact was witnessed in the initial part of the week as the S&P CNX Nifty declined more than a percent and touched an week low of 5215 mark, During the midweek Indian market managed  to bounce back  on account of short covering. Meanwhile "coalgate" issue and rupee spoiled momentum as Indian bourses closed in the red for fifth consecutive week. The volumes were on the lower side when compared to previous week. The FII's continued to buy for Rs 11,506 millions while the DII sold shares worth Rs.6563.50millions. Amongst the sectoral indices CNX infra index shed nearly 2 percent and topped the index losers list.

On the macro front, The Reserve Bank of India tightened rules for lending against gold by finance companies, saying the rapid growth in such loans in the past few years had increased risks to the banking system and retail investors. The banking regulator has directed that companies having half their assets in gold should have a minimum equity capital, or tier-I capital, of 12% by April 2014. Further, these companies can't lend more than 60% of the value of gold jewelry. Mirroring these developments shares of Muthoot and Manappuram finance melted more than 10% percent for the week.

Global markets witnessed profit booking after successive multiple week rally. Euro zone Manufacturing PMI contracted for the eight running month in March, declining to 47.7, following 49.0 points in February, Markit Analysts expected an increase to 49.5 points. The U.S markets posted losses for the week despite decent macro economic data. the US government reported that first-time claims for unemployment benefits in the week ended March 17 dropped to 348,000, a four-year low and a better number than analysts had expected. 

Going ahead Market may remain volatile ahead of F&O expiry. On the macro front, the government is slated to announce its market borrowing calendar for first half of FY 2013

Regards,

CSEC Research