Positive Start Expected On Fall In Crude Oil Prices

Yesterday, it was a volatile trading session for Indian equities as the benchmark indices were recovered in last half an hour on fag-end buying in select blue chips, amid expiry of monthly derivative contracts. Buying in blue chip stocks in energy, IT, Bank, Pharma and FMCG counters helped the Nifty, which crossed the 8,500-mark in intra-day trading, to end in the green for a second day in a volatile session. The Nifty ended up 18.45 points at 8494.20 while the Sensex rose 52.72 points to 28438.91. The broader markets outperformed the benchmark indices- The BSE-Smallcap and the BSE-Midcap indices rose by 0.55% and 0.51% respectively.

Introducing a new concept of niche banking in India, RBI today issued final norms for payment banks and small finance banks that would allow mobile firms and supermarket chains, among others, to enter the banking arena to cater to individuals and small businesses.

Elaborating the eligibility criteria, the central bank has included non-bank prepaid card issuer, mobile companies, telecom companies, business correspondents, PSU companies, real sector cooperatives and supermarket chains as promoters of payments banks, while it has allowed NBFCs, MFIs and local area banks to convert to small banks.

Crude oil just broke USD 70 for the first time since June 2010. WTI crude futures are below USD 70 after yesterday's OPEC meeting resulted in the oil cartel announcing that it will not cut production. WTI futures were down as low as USD 68.69, a more than 6% decline in the last 24 hours following the news. Brent crude oil futures, considered the global benchmark, were also down more than 5% to below USD 73 a barrel. The 31% decline in prices this year has helped reduce costs for India, which imports about 80% of its oil. Consumer-price inflation eased to 5.52% last month from as high as 11.16% in November 2013 also as Rajan raised rates three times from September 2013 through January.

On the global canvas, U.S. closed on yesterday for the Thanksgiving Day holiday. European stocks ended higher yesterday, with the DAX index rose for an 11th day after Germany’s jobless rate reached a record low. Energy stocks fell the most in eight weeks after OPEC decided to keep its oil-output target.

Unemployment in Germany has fallen to 6.6%, a record low, with November’s figures showing a faster-than-expected fall in the number of those out of work. Spain’s economic recovery gathered momentum between July and September rose 0.5% quarter-on-quarter and 1.6% on the year, with growth for a fifth consecutive quarter. And in Italy, manufacturing business confidence rose for a second month in a row, boosted by better order expectations from manufacturers of consumer and industrial goods. However, consumer-price numbers revealed that Spain slipped further into deflation in November, with prices falling for a fifth straight month.

The Euro STOXX 50 index climbed 0.4% to 347.49 at the close of trading. The DAX rose 0.6%, for its longest rally since May 2013. France's CAC 40 index was up 0.3% at 4,385.99. The U.K.'s FTSE 100 index slipped 0.1% to 6,726.25, weighed by oil majors.

From Asia side, Tokyo stocks opened in as investors weighed economic data including inflation and as oil prices slid after OPEC took no action to ease a global supply glut. Japanese core consumer inflation continued to slow, increasing 2.9% in October year-on-year. Currently the Nikkei 225 index rose by 0.97% to 17,415.03. While the Shanghai Composite Index currently trading at flat. The SGX Nifty is up by 0.36%. Today we expect Indian equities open in positive notes on account of slump in crude oil prices.