A Positive Opening On Cards

Indian equity indices witnessed a decline for third consecutive trading session as global cues pulled down the benchmark indices yesterday. Amid choppy trades, IT shares led the decline taking the Sensex down 25 points to 26247 and Nifty closed 10 points lower at 7843.

If we take a deeper look at the kind of movement Indian equities are witnessing, it is sort of directionless movement in the past few trading sessions. It is mainly on account of lack of triggers. However, going ahead the September quarter results are going to be a major trigger for the markets. While the IT giant Infosys will be announcing the September quarter results on Friday morning, even the IIP data for the Month of August 2014 would be announced on Friday evening.     

Overall the scenario seems to be directionless as there are hardly any triggers visible in the markets. Even the Government which has started on a bang has witnessed some amount of slowdown. Though the undertone by the Government is quite positive, the assembly elections in two states like Maharashtra and Haryana seems to have made the central Government to focus on the those elections.

But we are of the opinion that, while many on the street are raining question marks on the Government working, there is lot of ground work being done for long term progress.

Another positive point is declining crude prices, a major positive for the Indian equities. If the lower crude prices persist, we feel there might be some amount of relief on the inflation part also. In the past few quarter the rising oil prices was one of the factors contributing to the higher inflation.

On the global front there was some amount of relief for US markets. According to Bloomberg reports, the Federal Reserve’s hint that interest rates will stay near zero sent investors rushing back to the stock market, igniting the biggest rally this year for the Standard & Poor’s 500 Index. The S&P 500 surged 1.7 % to 1968.89. From trough to peak, the index moved 45 points yesterday, the most since February. The minutes published by the US Fed seems to have put in some life back to the US equity markets as the up-move managed to regain the losses made by the indices day before yesterday. As regards the Indices, the Dow Jones Industrial Average climbed 274.83 points, or 1.6 %, to 16,994.22.

Minutes from the Federal Open Market Committee’s last meeting showed a number of policy makers stated that “US growth might be slower than they expected if foreign economic growth came in weaker than anticipated.” In a statement following the September gathering, policy makers renewed their pledge to keep interest rates near zero for a “considerable time” after ending bond purchases this month. They also projected a steeper increase in borrowing costs next year.

As regards the Asian indices, the indices rose for a third day this week as Federal Reserve concerns over a global economic slowdown spurred bets that U.S. interest rates will remain low. While the Nikkei is now trading with gains of 0.42 % at 15661, the Hang Seng is also trading with gains of more than 1%. Shanghai Composite is also trading with gains of 0.45%. SGX Nifty is trading with positive gains of 0.39%.

After three consecutive trading sessions of negative closing, Indian equities are up for a positive opening today. Positive cues from the Global equities would provide some amount of solace. Ahead of the results season which is slated to start from tomorrow is likely to provide some amount of direction to the markets. As of today we expect a positive opening for the Indian equities and then expect it to move further northwards.