Markets Open High, To Remain Positive

The Indian markets opened in the green today and have been trading higher in a range, in a trend that is completely opposite of that seen yesterday. Currently the Sensex is trading higher by 0.47% at 17930.93 while the Nifty is trading higher by 0.47% at 5438.05.

HSBC released its preliminary reading of the Chinese manufacturing Purchase Managers’ Index (PMI) which came in at a 47.8 which is a 9 month low. Markets have sidelined this piece of news and moved on to gaining optimism with the higher probability of a stimulus in China. Moreover, the Fed Open Market Committee meeting minutes were released which boosted hopes of quantitative easing in the U.S. Both these hope providing news has played a carrot and stick with investors and have made markets swing upwards. While the Hang Seng is 0.91%, the Nikkei is up by 0.40%. China though has been weighed down because of the series of negative data from a drop in exports to reduced steel demand. The HSBC PMI has only added to woes and pushed the Shanghai Composite down by 0.18%. With the above factors in play, oil prices have shot up massively and Brent is currently trading very close to USD 116 per barrel.

Among the sectoral indices, IT, Metal and Teck are the largest gainers, trading higher by 1.52%, 1.31% and 1.05%. Among IT players, the top 3 listed companies, TCS, Infosys and Wipro have seen considerable buying. This trend has been seen since yesterday’s trading where the sector was the largest gainer. Of the 13 indices, only 4 are trading low at the moment, that too in the rtange of 0.01% and 0.09%, indicating a tepid negative trend which has a possibility to flip sides thus indicating overall market positivity.

Among individual stocks, Bharti Airtel is still witnessing heavy selling with the stock price down by 1.03% today. This stock is down by nearly 50% in the last 12 months has seen considerable loss in capitalisation since the downgrade by Credit Suisse. Reliance Communication too is trading at its lifetime low on worries from the impact of the entry of Reliance Industries Limited into the telecom space. On the higher side is Ranbaxy, which is at a 52 week high due to the withdrawal of 27 drugs from the US market to reallocate resources more efficiently. The scrip is trading 3.27% higher.  

Overall, we see cumulative positivity in the markets on all fronts and expect this trend to continue. Markets worldwide are banking on hopes of reforms and investors are driving markets upwards. With this trend, there seems to be no downside for the Indian markets in today’s trading session.