Markets May Show Positive Opening Today

We expect the Indian markets to open on slightly positive note today. SGX Nifty is trading with 9 points gain to 5786.

The Indian government is expected to consider big ticket reform bill in the cabinet meeting today which will be the big event to watch. The news reports indicate that the governments may consider Companies Bill, raising FDI cap in private insurance, empowering the interim pension regulator forwards market watchdog. The decision on these range of issues may keep the market on gains as we had seen in case of earlier decisions.

Earlier the US markets ended the day on slightly higher note due to the positive US labor and service sector related data. The service sector data showed that the growth has picked up in September. The private labor data also showed that more jobs were added in the economy than expected. S&P 500 and Nasdaq managed to clock about 0.4% gains while Down Jones industrial average remained flat as the blue chip Hewlett-Packard tanked heavily due to the poor earnings forecast.

The European markets ended Wednesday on a mixed note. Spain delayed the bailout request which weighed on heavy on the investor sentiment. Markets remained largely direction less with FTSE and DAX showing gains and CAC showing decline. The media reports now have indicated that Spain may ask for a bailout package in the next week. Ahead today European Central Bank is expected to announce its decision on interest rates.

In the domestic markets, positive sentiment may remain intact over the Parekh committee suggestions on the infrastructure sector. The committee has asked for 100 per cent FDI in telecom sector and has also asked for hike in the gas prices, power tariffs and rail fares. The infrastructure sector which is seeing some bullish sentiment may see another round of gains today.

Meanwhile economic times has reported that the Nifty constituents are expected to report 28 per cent jump in the quarter on quarter profits in the September quarter. This will be led by cement makers, Iron ore and crude oil miners. The report also says that revenue growth is likely to be 14 per cent

On the commodity front the crude oil yesterday all major commodities declined with the crude oil showing declining to two month low on the reports that crude output in America climbed to the highest level in more than 15 years and fuel consumption decreased. Crude oil November delivery also declined below 90 levels to USD 88 per barrel. The rupee outlook also remains strong due to the current bullish run of rupee. Goldman Sachs yesterday said that the rupee may further appreciate to 51 against dollar due to the improving current account deficit and recent reforms.

In conclusion with the slightly positive cues from the US markets and news of the big ticket reforms and Parekh committee report we expect positive opening in the market.