Expiry eve…Delicately poised

"The sharp thorn often produces delicate roses." - Ovid.

We are heading into crucial two-day trading as the expiry of current month’s F&O contracts take centerstage. The market is delicately poised with the Nifty just below 5400. The start today is likely to be down. Asian markets are in the red. US stocks closed lower while European indices managed slim gains.



Global markets have been under pressure amid concerns over a slowing US economy, uncertainty about life after QE2 and the eurozone debt troubles. Back home, earnings continue to hog limelight. Tata Steel, Cairn India and Coal India will announce their results today.

Infosys will be in focus following reports of a US probe into alleged violations of visa norms. PNB could see action on reports that it is likely to buy up to 33% stake in Metlife India.

The market has been drifting lower lately and is threatening to break down further. From a technical perspective, 5350 will be a key level to watch. The negative trend may pause if the Nifty closes above 5425.

Reports say NMDC will acquire a 50% stake in the Australian iron ore firm Legacy Iron Ore. Jai Corp. and Reliance Industrial Infrastructure may gain amid reports that the Government may finally give a green light to the Navi Mumbai SEZ.

FIIs were net buyers of Rs 1.88bn in the cash segment on Tuesday, according to the provisional NSE data. The domestic institutional institutions (DIIs) were net buyers at Rs 329.5mn on the same day.

In the F&O segment, the foreign funds were net buyers of Rs 5.14bn. The foreign funds were net sellers of Rs 1.38bn in the cash segment on Monday, as per SEBI web site. Mutual Funds were net sellers of Rs 894mn on the same day.

Results Today: ABG Shipyard, Archies, Bank of India, Cairn India, Camlin, Coal India, Gokaldas Exports, Gujarat Alkalies, Gulf Oil, KRBL, Madras Cements, Man Infra, Motherson Sumi, Tata Steel, Tecpro Systems, Trent and Zee News.

Japan posted its first trade deficit in 31 years last month. The trade deficit was 463.7 billion yen ($5.7 billion) in April. Exports fell 12.5% in April from a year earlier, the biggest drop since Oct. 2009, and imports rose 8.9%. The median forecast was for a shortfall of 703.7 billion yen.

Elsewhere in Asia, China’s current account gap contracted by nearly 20% in the first quarter of 2011. China’s current-account surplus for the quarter was $29.8 billion, down by 18% from year-earlier levels and by 71% from the prior quarter’s $102.1 billion.

The dollar and yen advanced against their major counterparts. The euro fell against the dollar amid concerns that Europe’s sovereign debt crisis will spread as regional officials struggle to address Greece's fiscal mess.

Crude oil rose in New York after Goldman Sachs and Morgan Stanley increased their price outlooks. Oil futures jumped 1.9% as the dollar slipped from a nine-week high against the euro after German business confidence unexpectedly stayed near a record in May.