Markets To Open On Flat Positive Note

The Indian markets may open on a flat positive note ahead in line with the global cues. The SGX Nifty is up by 6.5 points at 5,288, indicating a positive gap up opening to the markets today

The Indian markets witnessed a lacklustre trading session yesterday. However, during the late hour of the session the broader indices closed with significant losses of nearly 0.75 per cent. Nifty closed at the 5,275 level mark while the Sensex closed near to the 17,391 mark level.  There was a strong selling pressure among the broader indices. No positive triggers and weak global markets led to a strong selling in the market yesterday.      

The Asian markets yesterday closed in the negative territory due to growth concerns across the globe. This was also on the back of Chinese Premier Wen Jiabao’s statement that the real estate market curbs to discourage speculation would be a long-term policy. The comments have hit the property sector in Hong Kong. The nervous trades are also due to the disappointing U.S. data on Friday.

Overnight, the U.S. stock markets closed sharply in the negative zone for the third consecutive day as investors looked worried about the rising Spain bond yields and also traded cautiously ahead of the earnings’ season kick-off. Further, the European markets, after a choppy performance last week, ended on a negative note on the back of rising debt concerns over the euro zone. The growing batch of gloomy economic and corporate data compounded concerns about European authorities’ ability to respond to the crisis. However, it is strongly anticipated by the markets that the European leaders will soon announce a stimulus package for Spain. But whether this will change the structural problem remains a mystery.

On the Indian turf, the rupee, after once again hitting an all-time low, is currently hovering around Rs 56.02 per USD, which continues to cause concern about the increasing fiscal deficit since this will increase the import cost of the oil companies

This week the earnings’ season will take off and investors will look at the earnings for providing cues about the markets’ direction. We believe that the earnings’ season for the June quarter will remain muted on the back of various negative factors such as the weakening domestic and global economy, depreciated rupee value and the higher raw material prices which will continue to dent the performance this June quarter. However, on the global front we may see some announcement of stimulus packages which may provide the right triggers for the markets to move ahead.

In conclusion, for today we expect the markets to open on a flat positive note on the back of positive global cues, especially from the Asian region. The Asian markets have opened today on a positive note on the expectation of a stimulus package to be announced as European leaders agreed to throw a fresh lifeline to Spain.