Markets May Open In A Narrow Range

The Indian markets may open sideways, taking cues from the other global markets. The SGX Nifty is trading marginally down by 1.5 points at 5,245.5, indicating a neutral to negative start-up for the markets today.

According to Reuters’ latest media report, the finance and oil ministries are lobbying for an increase in the prices of diesel, kerosene and LPG, warning cabinet colleagues that time is running out to avert a fiscal disaster and a sovereign credit downgrade to ‘junk’ by global rating agencies. The cabinet committee on political affairs, headed by Prime Minister Manmohan Singh, will take the final call on the hikes as early as next week after the oil ministry recommended the changes in a note this week.

Further, according to media reports, the government’s plans to divest stake in PSUs is gathering pace. About 15 PSUs are on the divestment list this year, but for now, MMTC and Neyveli Lignite are going to go for cabinet approval next week. The government is planning to divest 9.33 per cent stake in MMTC but only 5 per cent in Neyveli Lignite as there are trade union issues. It is looking at a special allotment of shares for the employees.

Overnight, the U.S. and European markets closed on a mixed note with the American market indices such as Dow Jones closing marginally higher by 0.09 per cent while the other two major indices viz. S&P and Nasdaq closing lower by 0.11 and 0.19 per cent respectively. The European markets’ major index also closed on a similar note with the FTSE dipping lower by 0.25 per cent while the CAC and DAX closed higher by 0.2 and 0.46 per cent respectively.

This was in the wake of media reports which said that the U.S. stocks had drifted in a narrow range as investors waited to take cues from the job numbers due out on Friday. Further, there is a sharper focus on whether the European Central Bank will act to protect the euro in its meet scheduled for today. Meanwhile, a Bloomberg report said that the European Central Bank’s president Mario Draghi’s bond-buying proposal involves unlimited purchases of government debt that will be sterilised to assuage concerns about printing money.

Taking cues from the overnight closing of the global markets, the Asian indices have also opened with a similar kind of trend with Nikkei trading lower in the red zone, marginally down by 0.08 per cent, while the other two major indices, Hang Seng and Shanghai, are trading higher by 0.09 and 0.55 per cent respectively. The Chinese stocks have risen due to a Bloomberg report which said that the government’s subway proposal stoked speculation that the policy makers will introduce more stimulus measures.