Markets May Open Flat to Positive Today

Indian markets may open positive today owing to mixed global cues. SGX Nifty is currently trading 5.5 points up to 5377.50. Yesterday, markets remained weak and posted over 0.5% intra day loss by closing.

The political logjam in the country has continued in this week with the opposition demanding the resignation of the prime minister on the CAG reports that alleged that the coal block allocation caused the nation whopping amount of Rs 1.86 crore.

Yesterday, the US indices posted mixed trend. Dow Jones Industrial average closed 33 points below to 13125. Twenty of the 30 components of Dow closed in red. The S&P 500 index also fell marginally by 0.05% to 1410. NASDAQ however managed to close with gains of 3 points of 0.11% up to 3073, thanks to gains in Apple. The US markets seem to be in confusing mode as bond prices are rising signaling fear, but small-cap stocks have continued their outperformance signaling the opposite.

Markets are keenly watching what is on offer by European Central Bank President Mario Draghi when he speaks on Saturday on ECB policy at the Fed’s annual symposium. Federal Reserve Chairman Ben Bernanke is also a speaker in the same event due on Friday. These two speeches will give cues to the markets. Amid the speculations that these two powerful men will provide thoughts and rationale for the recovery in the world economy, markets are showing some strength.

Apple Inc touched new high in US after it won a historic patent case against Samsung. Apple has listed 8 Samsung products to be banned from US markets. Shares of Google also fell as Samsung operates its phones on Google’s Android system.

The European stocks however mostly showed gains despite the key German business sentiment shown steepest fall from March 2010. The positive upward movement in the European indices is mainly due to the possible stimulus measures from the central bank. The London stock exchange was closed for a bank holiday. Fall in the German business sentiment is however a worrying signs in the Europe’s strongest economy.

On the Asian front, the markets are showing mixed trend. The indices however have come off the opening gains. Hang Seng and Nikkei are showing negative bias while Shanghai is up 0.27% after it went down over 1.5% yesterday.

In conclusion we expect the markets to show marginally positive opening on hopes of positive signals from Federal Reserve on Friday. Market however may shed the gains in the due course of the day as the economies of Germany and China have shown signs of weakness. The markets will remain volatile whole weak due to the derivative expiry of August series.