Indian Markets May Open On A Positive Note

The Indian markets may open positive in line with the global cues. Renewed hope from the Europe’s debt troubled nation and speculation that the Federal Reserve may start another round of monetary stimulus will lift the markets higher.

On the global front last week European markets extended gains to hit a 13-month high on last Friday, continuing to get support from the European Central Bank's bond buying plan unveiled in the previous session, and with investors also betting on an improvement in U.S. jobs figures which was announced later. However there was disappointment from the US august job market data which came below the market expectation for the month of august 2012. Post the job data announcement there was speculation that Federal Reserve’s will take concrete steps to improve the country’s economic situation.

The European markets lost some of its gains On Friday post the announcement of the US job data for the month of August 2012. Major index such as FTSE, CAC and DAX all closed with the gains 0.30%, 0.26% and 0.65% respectively. The US markets too finished modestly higher Friday, with major indexes scoring gains for the week to end at their highest levels in years. The rally has been the result of massive short-covering and anticipation of more liquidity courtesy of the Fed.  

The Asian markets on Friday last week closed on a strong note in more than seven months after Beijing announced a slew of new infrastructure projects to spur a slowing economy. Major Asian Indices Hang seng, Nikkei and Shanghai closed higher with the gains of 2.99%, 2.15% and 3.56% respectively.  Also the announcement of the bond buying programme by ECB and optimism over a U.S. jobs report lifted the market mood further.

Back home, on the Indian Turf the rupee has recovered from its all-time low  as dollar lost strength  after the announcement of the ECB infusing liquidity to the market. However Rupee is still trading above the comfort zone at Rs 55.52 against the USD. The global benchmark Brent crude prices continue to trade at its higher level of USD 114, which is currently above our comfort zone.

In conclusion, we expect the Indian markets to open on a positive note on the back of strong global cues. Also with the announcement of some reforms such as petrol price hike we may some see positive momentum in the market.