Week May Start On Weak Note, Expect Volatility Ahead

The Indian markets may open on a negative note taking cues from other Asian markets. SGX Nifty is currently trading lower 14 points to the levels of 5665 indicating a negative opening for the Indian markets in their early trade.

Further we at Dalal Street Investment Journal believe that one may see volatility in the Indian Indices latter this week as we would be having two days off, (Wednesday on account of “Dussera” and on Friday due to “Bakri Id.” Further between the two holiday’s we have October month F&O expiry (on Thursday) which would keep the market on its toes. 

Indian markets last week closed on a marginal positive note, after we had some of the key economic data like IIP and WPI which were released. WPI for the month of September 2012, came in at 7.81 per cent which dampened the hopes of RBI cutting the rates on 30^th October 2012. Further IIP for the month of August came in at 2.7 per cent which showed a muted to subdued growth. 

US markets on Friday closed in the negative territory, after major Indices like Dow Jones, S&P and Nasdaq closed in deep red in the range of 1.5 to 2.2 per cent respectively. This is after Bloomberg report, which said that markets gave up all the gains made during the week, due to Technology majors Google and Microsoft posted disappointing results. European Markets also ended on a negative note with Indices like FTSE, CAC and DAX closed lower in the range of 0.3 to 0.9 per cent

Further according to media reports, all the eyes would be on financial issues and foreign policy meet on tonight when Barack Obama and Mitt Romney go head to head in their third and final debate..

Asian markets are currently trading lower with major Indices like Nikkei and Shanghai are trading lower down 0.72 and 0.55 per cent respectively while Hang Seng is trading marginally in the green zone up 0.16 per cent. This is after Bloomberg reports which said that Japan’s exports dropped at the fastest pace down around 10.3 per cent leaving a trade deficit of 558.6 billion yen ($7 billion), since last year’s post-earthquake slump amid a global economic slowdown and a territorial dispute with China.  

The rupee has been appreciating since last one month as it has come down from the levels of sub Rs 56 per dollar to the Rs 53.7175 against a dollar which is good for our economy. Going ahead, we believe that the government which has put an end to the policy paralysis will help the rupee to appreciate against the dollar. Brent crude is trading at USD 110 per barrel while the WTI is trading at USD 90 Per barrel.

Further companies like HDFC, Bank of Baroda, Cairn India, L&T, Syndicate bank, Tata Coffee etc would announce their September quarter numbers which may affect their share price movement.

In conclusion we believe the market will remain volatile and we advise our readers to play with cautious.