Markets Await Maharashtra & Haryana Election Results

Indian markets was closed on Yesterday due to assembly elections in Maharashtra. On Tuesday, It was volatile trading session for Indian equities as the benchmark indices traded from flat to lows and then it was recovered and ended the day on a flat note. It was more of a choppy session where realty index down by 9.24% due to DLF plunged nearly 29%. However, most bank stocks gained after moderation in consumer price inflation in September 2014. The 30-share Sensex ended down 35 points at 26,349 and the 50-share Nifty ended down 20 points at 7864.

The realty sector was hit a day after SEBI barred DLF from tapping the capital markets for three years for “active and deliberate suppression” of material information at the time of its IPO. The company’s scrip plunged by 28.46% at Rs.104.95 (probably its biggest one-day fall).

Meanwhile, after CPI inflation comes down to 6.46% for September, WPI inflation also eased to 2.38% for the month of September compared to 3.74% in August, and lowest in 33 months.  Analysts expect RBI to be able to meet its 2016 target of 6% of retail inflation by mid-2015 itself and adopt a dovish stance on policy rates soon.

On the back of low retail inflation the rupee had hit a high of 60.90 in early trades against US Dollar, its highest since September 23, 2014. However, it later reversed direction and closed at 61.38 against US Dollar.

On the global front, U.S. stocks closed in the red on Wednesday but recovered significantly from historic intraday losses amid concerns about slowing global economy, corporate earnings and the spreading Ebola virus rattled already spooked investors. The Dow plunged as much as 350 points in early trading, only to reverse quickly. However, the Dow then tumbled 450 points in mid-day trading. By the end of the day, the Dow Jones industrial average lost 173.45 points (1.06%), to 16,141.74. The Standard & Poor's 500 index fell 15.21 points (0.81%), to 1,862.49 and the Nasdaq composite dropped 11.85 points (0.28%), to 4,215.32.

On the U.S. economic front, the day's data showed U.S. retail sales and producer prices fell in September, while manufacturing activity in New York slowed to its weakest pace since April. Today, the U.S. Department of Labor is scheduled to release its weekly jobless claims data.

In Europe the picture was the same. The Stoxx Europe 600 Index dropped 3.2% to 311.36 at the close of trading, falling for a seventh day, and its longest losing streak since 2011. The equity gauge has retreated 7.3% Oct. 6 as the International Monetary Fund cut its global-growth forecasts, and German industrial production and investor confidence declined. Germany’s DAX dropped 2.87% while France’s CAC was down 3.63%.The Euro Stoxx 50 Index has fallen 13% from its June high. FTSE 100 index fell 0.36% to end at 6,622.72 points.

Asian equity indices also open in red. Japanese stocks fell, dragging the Topix index toward a correction, after the yen rose by the most since April and U.S. retail sales dropped more than forecast. The Topix index declined 2.4% to 1,194.12. This level would complete a slump of about 11% from a six-year high on Sept. 25. The Nikkei 225 Stock Average (NKY) fell 2.5% to 14,694.01. The MSCI Asia Pacific Index (MXAP) tumbled 1% to 135.19. A SGX Nifty Index future is trading in negative with down by 0.88% to 7883. Today we expect Indian market likely open in negative note on back of weak global cues. But the weakness in domestic stocks could be cushioned to some extent by opinion polls, which are hinting at a BJP victory in the Maharashtra elections.