Expect market to open in the green

The Indian equity markets surged over 1.5% on Friday to log its first weekly gain this year due to a rebound in commodity prices; and Bank of Japan's (BoJ) bold move to adopt negative interest rates to stimulate the Japanese economy stoked global risk appetite for equities. Besides, the recovery in crude oil price also helped. Sensex closed 401 points, or 1.64% up at 24,870.69; while Nifty 50 index settled 138 points, or 1.87% up at 7,563.55. Even broader market participated in Friday’s rally with the BSE midcap index gaining about 2.02%, or 206.18 points and the smallcap index rose 1.07%, or 115.32 points. On a weekly basis, the Sensex recovered 435.03 points, or 1.78%, and the Nifty rose 141.10 points, or 1.90%.

U.S. stocks closed sharply higher on Friday, the last trading day of January, owing to a surprise interest rate cut by the Bank of Japan and despite a report showing a weak fourth-quarter U.S. growth. Encouraging earnings reports; and some stabilization in oil prices also helped push equities higher. The Dow Jones industrial average surged 396.66 points, or 2.5%, to 16,466.30. The S&P 500 index rose 46.88 points, or 2.5%, to 1,940.24. The Nasdaq composite index jumped 107.28 points, or 2.4% to 4,613.95.

On the U.S. economic front, gross domestic product expanded at a 0.7% annual rate in the fourth quarter of the year as against the economy, which had advanced 2% in the third quarter and 3.9% in the second quarter. The market had expected GDP to grow at a 0.8% pace in the October-to-December span.

Crude oil prices kept rising. WTI oil settled up 40 cents, or 1.2%, to USD 33.62 a barrel in New York. Brent crude, a benchmark for international oils, gained 85 cents, or 2.5%, to USD 34.74. Oil prices have increased for four days in a row as investors hope for cuts in global production. For the week, Brent jumped USD 3.81, or 10.58% and WTI oil rose USD 1.43, or 4.25%, posting the second consevutive weekly gain.

European stocks also closed sharply higher on Friday after the Bank of Japan surprised global markets by adopting negative interest rates for the first time. The Stoxx Europe 600 claimed a 2.2% rise to end at 342.27 and for the week it gained 1.2%. France’s CAC 40 tacked on 2.2% to close at 4,417.02, and Germany’s DAX 30 advanced 1.6% to 9,798.11. The U.K’s FTSE 100 put on 2.6% to finish at 6,083.79.

Asian markets extend its rally on Monday, after the Bank of Japan’s (BOJ) surprise shift into negative interest rates pushed stocks higher on Friday. However China's manufacturing PMI data remained in contraction territory for the sixth straight month in January. Japan’s NIKKEI 225 index jumped 1.53%, adding to Friday’s 2.9% surge. South Korea’s Kospi index advanced 0.24%. Australia’s S&P/ASX 200 Index gained 1.3%. New Zealand’s S&P/NZX 50 index increased 0.41%. China's share markets opened down, with the key Shanghai Composite dipping 0.73%.

While on domestic front, a SGX Nifty 50 index future for February series traded up 57 points at 7,608. Indian markets may open in the green following other Asian markets. Besides, auto stocks would be in focus amid release of monthly sales figures from today. Investors must keep an eye on RBI policy review which will deliberate on Tuesday.