Markets May Open Weak Today

Indian markets may open weak over the concerns of health of the world economy. The SGX Nifty is currently trading 24 points down to 5688 indicating negative opening in the markets.

Earlier on Friday the markets rallied by 2% over the governments strong support to its reform measures. While the Mamata Banerjee has called off her support, the government is firmly going ahead with the implementation of the reforms. Besides, the PM has also said that the government will make more investor friendly environment the country so that the foreign investor will keep coming. The Finance minister has also said that there will be further announcements including that in the insurance sector. The debt ridden power sector will also see some big ticket announcements soon that will also lift the sentiment on the sector and overall industrial world. Besides PM has said that there will be more standards in the corporate laws at par with the international standards which will attract more investments in the country.

Overall there is ample of liquidity in the market largely funded by the foreign investors. Besides in the domestic market, after the SLR and CRR cut the money is flowing in the market hence there is strong liquidity available and the recent rallies were also supported by this. The position may not change despite this being the derivative expiry week. Many brokerage houses have raised the Sensex target to 20000 or higher hence this week will also show some gains.

The prime minister has told the President that the government stability is intact hence investors may remain optimistic on that front. The government has also received the SP support hence government seems stable at this time.

Earlier on Friday, the European markets largely showed gains on hopes of Spain reforms. The debt ridden country is seeking to freeze the pensions and speeding up a planned rise in the retirement age. It is also expecting a bailout package to resolve its debt problems.

The US markets on the other hand remained volatile over the concerns of the global economy.

The Asian markets at this morning are trading weak as the focus has shifted to the fundamentals. The central banks across many countries have done rounds of easing of the monetary policy and there is plenty of liquidity hence focus may remain on the strong fundamentals. All the three key Asian indices are showing losses of over 0.5% at the morning sending negative cues to the Indian markets.

On the back of all the news today, we expect weak opening in the market. Investors may also take the opportunity to book profits over the concerns of Fundamentals.