Markets snap three-day rally ahead of F&O expiry; broader markets in green

The benchmark indices on Thursday snapped three-session long gaining streak tracking negative global cues after US president Donald Trump's long-awaited tax plan failed to enthuse investors, while back home derivatives expiry of the April series, due later in the day, kept the momentum cautious.

At 12:31 pm, the S&P BSE Sensex was trading at 30,082, down 50 points, while the Nifty50 was ruling at 9,345, down 6 points. Both the indices had settled at their record closing highs in the previous session. 

In the broader market, the S&P BSE Midcap index and the S&P BSE Smallcap index added 0.2% each. 

"Despite yesterday’s volatility, the descending broadening wedge pattern breakout that was discussed yesterday is still potent, and has retained the momentum for the 9,500 move which is in play. But, VIX having swung higher from a three-month low, volatility is to be expected, which makes 9,280 and 9,200 crucial downside pivots which needs to be watched out for," said brokerage Geojit Financial Services in a technical note. 

Meanwhile, the rupee appreciated by 6 paise to 64.05 at open against its Wednesday's close of 64.11. The domestic currency had strengthened to 63.93 a dollar, its highest since August 2015 in intraday trade yesterday. 

Buzzing stocks

Axis Bank shed nearly 3% and was the top Sensex loser after the private sector lender’s net profit declined 43.1% to Rs 1,225 crore for the fourth quarter ended March 2017 on flat net interest income and rise in provisions for stressed loans.

MCX rose over 2% to Rs 1,250 after the capital market regulator the Securities and Exchange Board of India (Sebi) on Wednesday announced the much-awaited commodity market reform of permitting exchanges to launch options contracts. 

Earnings today

27 companies are scheduled to report their March quarter results today which include Kotak Mahindra Bank, Maruti Suzuki, Biocon, Indiabulls Real Estate, Hatsun Agro, Reliance Capital, Syngene International, TVS Motor, etc among others.

Rollovers

Market-wide rollovers moved to 55% compared to average rollovers of 58% in the last three series, while Nifty rollovers were 51% as compared to average rollovers of 55% in the last three series.

"In Nifty options, huge short covering was seen in 9,300-9,200 call options for yet another day. On the other hand, 9,350 and 9,300 put options added good amount of positions, indicating base has shifted higher for the Nifty for current series. In May series, 9,600 and 9,500 call options added healthy positions in the previous session, while, traders have initiated huge positions in 9,300 and 9,200 put options," said brokerage Angel Broking in a note.

Trump's tax plan

US President Donald Trump proposed slashing tax rates for businesses to 15% from the current 35% for public corporations and 39.6% for small businesses, and on overseas corporate profits returned to the country.

But the one-page plan offered no specifics on how it would be paid for without increasing the deficit, which many analysts think would be difficult to achieve.

Global markets

Asian shares ticked down from a near two-year high after a long-awaited US tax plan failed to inspire investors, though sentiment remains supported by global growth prospects and receding worries about political risks in Europe.

MSCI's broadest index of Asia-Pacific shares outside Japan fell 0.1% after hitting its highest level since June 2015 on Wednesday. Japan's Nikkei dipped 0.3%, China's Shanghai Composite dropped 0.4%, while Hong Kong's Hang Seng index was trading flat with negative bias. 

On Wall Street, Dow Jones Industrial Average fell 21.03 points, or 0.1% to 20,975.09, the S&P 500 lost 1.16 points, or 0.05% to 2,387.45 and the Nasdaq Composite dropped 0.27 point to 6,025.23.

(With inputs from Reuters)