Market To Show Quiet Opening Ahead Of Expiry

This is the last Thursday of the month which means that the September series will expire today. The world market have shown steep decline in the week as the European stability has again become a concern for the markets. Ahead of the expiry, we expect the market to remain weak as the positive trigger is missing.

Earlier, Global credit rating agency, Moody’s has said that it still considers India’s credit rating as stable. It however has said that the recent reforms by the government would not change the outlook and that the fiscal deficit is likely to exceed the target.

Overnight the US markets declined over the fresh financial concerns in the euro zone. S&P 500 index posted fifth straight decline while Down Jones recorded decline of 0.26% and Nasdaq reported loss of 0.66%. Day before yesterday Fed’s QE3 was criticized saying that it may not boost the growth in USA. Yesterday, there was wide market consensus that Fed will go for outright asset purchase program by December this year which we believe that the QE3’s success will be limited and Fed wishes to do more in this fiscal itself. In the US, the GDP for the second quarter will be announced. It is expected that the GDP growth to come little unchanged to 1.7 percent.

The European stocks yesterday closed with heavy losses. DAX and CAC were down over 2% while FTSE index was down 1.5%. Europe’s problems have again increased as there were violent anti-austerity protests in Greece. In Spain the financial troubles have increased sending a signal that the region hasn’t been able to contain the debt crisis in full. Spain's central bank yesterday warned that Spanish economy continues to shrink significantly sending strong negative signals to markets. This follows the growing concerns over Europe that the situation in the region is set to turn for the worst.

All these negative news cut the Asian markets to red in the morning. Hang Seng was down 0.8% while Nikkei and Shanghai were down by over 1%. In the later course of the morning, the markets have curtailed the losses and are trading in green.

The market has refused to tank heavily despite peer markets have gone down significantly. The recent reforms have somehow floated the market and hence there is some hope that the investor confidence in India remains upbeat after the expiry.

In conclusion we expect market to show quiet opening and volatile trades ahead of September series expiry.