Markets May Open Side-Ways

The Indian markets may open sideways in line with the global cues. The SGX Nifty is trading lower by 1 point at 5,245, indicating a neutral opening in today’s trade.

Yesterday the markets had a see-saw trading day but closed marginally in the green zone. There were no major news in the market which could drive it in either direction. Yesterday’s trade could be considered as stock-specific as scrips like Cipla showed good strength post its robust June quarter results while Coal India was down after it signed the FSA agreement. There are media reports suggesting a cabinet reshuffle. P Chidambaram is now the new finance minister and Sushil Kumar Shinde has been given the home portfolio. Veerappa Moily will look after the power sector which was earlier headed by Shinde.

Further, investors across the globe are keen about the outcome of the European Central Bank’s meet to be held tonight. The decisions taken by the ECB will move the market in either direction in tomorrow’s trade. Overnight, the U.S. markets closed in the red zone with major indices like Dow, S&P and NASDAQ closing lower in the range of 0.3 to 0.7 per cent. This was in the wake of the Federal Reserve meet that took place yesterday. According to a Bloomberg report, the Federal Reserve has said that it will pump fresh stimulus if necessary into the weakening economic expansion to boost growth and reduce the unemployment rate that has been stuck at 8 per cent or higher for more than three years.

Meanwhile, the European markets closed on a mixed note with the DAX going into the red zone while the FTSE and CAC closed higher by 1.38 and 0.91 per cent respectively. This was after investors took their cues from the possible outcome of the ECB meet. Further, the Asian markets are currently trading with a mixed bag with Nikkei trading higher in the green zone while Hang Seng and Shanghai are trading in the red zone. This is in the wake of media reports that suggest that the Asian markets had a choppy start in today’s trade after various sales and earnings results came into focus in Tokyo though the gains were kept in check.

For today, watch out for stocks like Cummins India, Glenmark Pharma, Hotel Leela Venture, Madras Cement, Oracle Fin, Satyam Computer, Tamilnadu Petrochemicals, Shasun Pharma, 3i Infotech, Berger Paints, etc as these companies are going to announce their June quarter numbers. One may see some volatility in these companies’ share prices in today’s trade.

In conclusion, we expect the markets to remain volatile and therefore would advise investors to step ahead with caution.