Markets May Show Flat Opening today

After the gap of one day, Indian markets may show flat opening today. The SGX nifty is showing decline of 30 points to 5773.

Earlier US markets closed mixed over the concerns of the global economy and on the uncertainty over the timing of Spain's bailout request. Dow Jones ended in red while Nasdaq managed to gain 0.21% and S&P 500 closed flat. European markets closed in red with CAC showing decline of 0.6% and FTSE and DAX showing losses of about 0.2%.

The liquidity has been flowing in the markets after the easing the monetary policy in US, Euro zone, China and Australia. Eyes are set on the earning season as well as RBI’s monetary policy review. The deputy governor of RBI has said that the high prices of the food are a barrier for the growth which may indicate that the RBI may again opt to hold the policy rates. The market has been hearing all such news for quite long time now and may again expect a rate cut in the forthcoming policy review.

The Government looks very firm on its FDI decision and has said that it will not roll back them. The Government is now on way to announce fiscal measures to cut the gap between revenues and spending. This financial balance will help the RBI to plan its monetary policy in a better way. When government announces its fiscal policy measures market will get another push.

Later today the panel headed by HDFC Chairman Deepak Parekh will submit its report on infrastructure funding to the prime minster. The panel is expected to review the existing policies and suggest the necessary changes. The committee if believed to the news articles, will recommend infrastructure investments  of USD 1 trillion which will give an upward fillip to the infra sector.

According to the recent media articles government is also planning to sell its stake in few companies  to that have had a positive run recently. The government’s stake in Axis bank, ITC and L&T is worth RS 44000 crore as per latest data which is higher than its disinvestment target. The government has already approved divestment in few PSU companies in the last month.

We remain upbeat on our earlier comments that Sensex will touch 20000 by end of the year. Apex industry body, Assocham has also said that the Sensex will touch the crucial mark of 20000 due to the return of the overseas investors and increased liquidity in the global markets. It expects banking, IT and FMCG to be frontline stocks whle Real estate, automobile and consumer durables to take some time to show the rally.

On the currency front, the Indian rupee for the first time in several months has appreciated to Rs 52 mark which indicates that the government’s reforms and returning of the FIIs have strengthened the rupee.

Back to the equity markets, the Indian markets closed nearly flat on Monday. Yesterday the markets were closed on the occasion of Gandhi Jayanti.

The Asian markets at this time are showing mixed trades with Nikkei and Shanghai flat while Hang Seng showing 0.6% gains.

IN conclusion we expect the market to show Flat opening in today’s market.