Positive Data From U.S. And China, Markets May Open Positive

The markets yesterday opened on a high due to positive cues from the U.S. and Europe. However, after hitting an intraday high in the morning, the markets started to dip lower on the back of docile domestic cues. Trading throughout the day had been range-bound and the indices were weighed down by significant selling seen in RIL and TCS which ended the day lower by 0.97 per cent and 1.05 per cent respectively. Dull trading has been seen in the last couple of days, though the global markets have been posting hefty gains. With this, the Sensex ended the day higher by 33.07 points at 18,610.77, up by 0.18 per cent and the Nifty ended the day higher by 12.25 points at 5,660.25, up by 5660.25.

In terms of positive sentiment in the markets worldwide, not much has changed except the gravity of the upward trend. There has been a flow of positive data from the U.S. and from China while Europe seems to be pleased with an unchanged rating on Spain by Moody’s. Domestically, there still seems to be a consolidation mood and this may result in the markets being weighed down today as well. The markets may open positive today.

The U.S. markets saw another positive day in terms of data with the release of housing figures bringing in relief of a bounce-back in the sector. The data indicated a surge of 15 per cent in September in new home construction, marking the highest level seen since the past four years. Over the last 12 months, work began on 34.8 per cent more homes, indicating the highest rise since April 2012. There has also been an increase in orders and lower mortgage rates which support the fact that there is significant improvement being witnessed there. The equity indices, however, saw mild gains with a 0.04 per cent and 0.09 per cent increase in the Dow and Nasdaq respectively.

Meanwhile, Moody’s held Spain’s rating a notch above the junk grade, thus evading the markets of a major wave of uncertainty and an area of grave concern. This hold on the rating resulted in healthy gains across Europe with the FTSE, DAX and CAC ending the day higher by 0.69 per cent, 0.25 per cent and 0.77 per cent respectively.

The Asian stocks opened higher today and have further been propelled upwards with the release of crucial data a few minutes ago. In accordance with this, China’s Q3 GDP growth has slipped, but has beaten expectations. It has come in at 7.4 per cent as compared to the previous year. It has slowed down from the 7.6 per cent growth seen in the previous quarter. September’s retail sales in China have gained by 14.2 per cent, which is higher than the August figure of 13.2 per cent and industrial production has improved from 8.9 per cent in August to 9.2 per cent in September. The Asian stocks are trading higher in the range of 0.34 per cent and 1.05 per cent.

Domestically, gold has been seeing a rebound on account of stronger demand due to the festive season. The increased buying in terms of stocks and retail resulted in a 0.46 per cent increase in gold prices yesterday. The beginning of Navratri, a week believed auspicious for purchases, especially precious metals, marked the rise in gold prices.

On the equity front, the markets continue to exist in a favourable global scenario that has the capacity to support gains. There has been increased news and data flowing in from the U.S. and China and the sentiment seems to be stable in Europe. The markets are thus expected to see a positive opening. However, the course of the day will be determined based on domestic sentiment and the phase of the market.