The global weakness is sure to spill on to the Indian shores as well. The SGX Nifty which is currently trading almost 30 points below its yesterdays close is already reflecting it. The first big corporate result comes in on the 15th when Infosys will showcase its March quarter and FY14 performance. Today will solely be mirroring the global sentiment and that does not look good as of now. You could end the week on a weak note. Looks like, we are headed for a depressed open and a shaky trading day today.
A week shortened by a holiday, nevertheless seems to have been such a long one from the market’s perspective. If you look at the overall movement of the benchmark indices, markets haven’t gone anywhere as such during the three trading days so far, except for that one big Wednesday. Yet the sentiment is so bullish that every close looks like a big achievement. The phrase ‘markets hit a new peak’ has become such a standard remark, that its absence on a day could hit investors psyche more badly than any real fundamental factor.
The election process has gathered pace with more and more constituencies going to the ballot each day. The first big round of voting happened yesterday where a major part of larger states cast their votes for the 16th Lok Sabha. The markets have been riding on these elections for quite some time now. The ‘hope wave’ which began quite nervously has only gotten stronger by the day. It could get stronger as we go ahead.
The primary reason for this is the way things are shaping up. The possibility of the formation of a stronger government following a decisive vote in favour of stability and growth is gaining credence. This is what India in general and the markets in particular need at the moment and that is probably keeping investors in high spirits right now.
While elections continue to be the guiding force of the markets, corporate results will now slowly get to the centre stage. You would have read it here before too, but let’s put things in perspective once again. Corporate results are not expected to surprise the markets. Factors that could impact corporate performances have remained more or less the same as they were during the preceding quarter. Hence expecting anything to come out of the March quarter performance could turn out to be a damp squib. Of course, the markets will now turn to being stock specific with investors reacting to the numbers as and when declared.
What is more intriguing today is the way global markets have behaved yesterday. A deep correction is being witnessed in the US markets. Call it a cooling off from highly heated levels or the movement of money from growth to value, whatever you say it is, it sounds pretty bad for the psyche of other markets. The Fed meeting minutes had calmed nerves on the interest rate front and other macro data points too were coming out to be quite good. But the selloff in tech stocks where valuations have suddenly come to be the focal point is leading the markets into a deep correction.
The Dow closed a good 1.62% below its previous close yesterday while the S&P 500 was down 2.09%. The worst hit was the Nasdaq which plummeted a big 3%. European benchmarks too have followed their US counterparts and finished lower. Weaker Western markets will have an impact on peers across the globe. The first signs are already visible in Asia.
Except for Indonesia (which is going through polls too) every single market is in the red this morning. Japan is the worst performer so far with the Nikkei down by a huge 2.20% so far. In China, the Shanghai Composite is trading almost half a percent below its yesterdays’ close While Hong Kong too is looking very weak where the Hang Seng is down 0.63%. Among Korea, Malaysia, Singapore and Taiwan, Korea is the weakest with the Seoul Composite trading down 0.75% as of now. All other benchmarks are down an average half a percent so far.
The global weakness is sure to spill on to the Indian shores as well. The SGX Nifty which is currently trading almost 30 points below its yesterdays close is already reflecting it. The first big corporate result comes in on the 15th when Infosys will showcase its March quarter and FY14 performance. Today will solely be mirroring the global sentiment and that does not look good as of now. You could end the week on a weak note. Looks like we are headed for a depressed open and a shaky trading day today.
