Markets To Open Gap Up Over Stimulus News Flows

Yesterday was Dasherra holiday for Indian markets. However, the market closed in negative after opening in positive on Wednesday over sharp decline in Chinese markets. Late recovery was seen as Index heavyweight Bajaj Auto posted better than expected results and this lifted the sentiments of the market. Finally the Nifty index closes with loss of 10 points at 8252 levels. The breadth for the Nifty index has remained negative, as the advance decline ratio ended on the negative side. Out of 50 stocks 22 stocks closed in the green, whereas 27 stocks closed in the red.

Over last few trading session during this week, the domestic markets were trading in narrow ranges and struggling to find out trigger for its move. However, yesterday, the European Central Bank kept its key rates unchanged and hinted for more stimulus as the recovery in European market seems to be not satisfactory. The ECB meeting gave considerable cheer to European markets. The DAX and CAC 40 indices surged by 2.48 and 2.28 per cent during yesterday’s session. the FTSE closed up by 0.44 per cent.

US markets too showed good strength during yesterday’s trading session. US stocks ended sharply higher yesterday, rallying on economic data, better than expected earnings and dovish comments from European Central Bank President Mario Draghi. The ECB’s hints for more stimuli were enough to help the Dow Jones register its biggest point and percentage gain since September 8. The Dow Jones closed higher by 1.87 per cent. The S&P 500 and Nasdaq closed higher by 1.66 and 1.65 per cent higher yesterday respectively.

Today morning asian stocks too showing considerable strength following western markets. The ECB stimuli hint showed good cheers in the markets. The Japanese Nikkie was trading up by 2.35 per cent higher. The Australian ASX 200 was trading up by 1.91 per cent. the Hang Seng was too trading higher by 1.36 per cent despite of slowdown in Chinese economy.

The Indian premarket barometer SGX Nifty was too trading higher by more than 1 per cent during today’s morning session. We also expect markets to open gap up over stimulus news flows.