Market May Open Negative

The Indian markets may open negative in line with the global cues. The SGX Nifty is trading lower by 10.5 points at 5,237.5, indicating a negative opening in today’s trade.

Yesterday the markets reflected a bit of strength as investors bought some of the beaten down stocks. Further, the markets which looked nervous during the first half of the day on account of the monetary meet picked up later, signalling that the RBI’s decision has been ignored. This was after the markets first moved higher despite the RBI maintaining a status quo on the repo and CRR front while revising the GDP growth downwards to 6.5 per cent for FY13 and inflation projection upwards to 7 per cent by the end of March 2013.

Meanwhile, there was media speculation that P Chidambaram has been selected to take over as the finance minister once again. If so, he would be faced with major challenges to revive sentiments in the economy by taking action on some of the key pending reforms. Investors globally are also waiting for the outcome of the Federal Reserve meet scheduled for today and the European Central Bank’s meet to be held tomorrow. The outcome from both these events may move the markets in either direction.

Overnight, the U.S. and the European markets fell as media reports suggested that the central banks would not come up with enough stimulus measures to bolster the global economy. The American market indices like Dow, S&P and NASDAQ closed lower in the range of 0.2 to 0.5 per cent while the European indices like FTSE, CAC and DAX closed lower in the range of 0.05 to 1.2 per cent.

The Asian markets are trading on a mixed note with Hang Seng and Nikkei trading in the red zone while Shanghai is trading higher by almost 0.5 per cent. This is in the wake of a Bloomberg report about a decline in oil and copper prices. The report also added that China’s purchasing managers’ index missed estimates and a gauge of Australian manufacturing declined to its lowest in three years. The Chinese market is trading higher despite the lower index because there is expectation about the Chinese government taking steps to bolster growth in the economy.