Markets May Open Positive On Cabinet Reshuffle and Rate Cut Hopes

After break of two days Indian markets may open positive. The cabinet reshuffle and rate cut speculations are the latest indicators pointing towards the positive opening. SGX Nifty is currently trading up 18 points to 5721.

Earlier on Sunday Manmohan Singh government has gone for one last reshuffle of the cabinet giving opportunity to many new and young faces. This could be the last cabinet restructuring before the 2014 election. The entry of new faces has sent a strong positive signal to the market. Brokerage houses have said that this reshuffle will bridge the gap between India's political and business capitals. Government has also introduced new Power and Petroleum minister which will also give a signal that the government is very serious to address the energy woes that the country is facing.

Earlier on Friday, Indian markets closed with 0.7% loss on profit booking. Only Auto index gained among the sector while rest all indices closed in negative. CD index fall nearly 3%. The positive run of Auto index was mainly after the festive season guidance as well as after M&M earnings reported on Thursday.

The US markets closed flat on Friday. Weak earnings reported by the top companies like Amazon, Apple etc hit the markets on Friday. Both companies reported losses which changed the sentiment. Meanwhile US GDP data showed that 3rd-quarter economic growth of the country accelerated to 2%. The second quarter growth was at 1.3% hence the latest numbers will be seen positively by global markets. In USA, Hurricane Sandy is expected to hit its east coast which may have a dampening effect on trading later today. 

The European markets also closed mixed with FTSE showing gain of 2 points (0.03%) while DAX gaining 0.44% and CAC showing 0.69% gains. The European stocks are expected to remain weak during this week due to the corporate earnings reports. 

The Asian markets at the moment are mixed with only Nikkei showing gains while Hang Seng and Shanghai showing drop. The markets however opened mostly positive over the stable economic growth in US. China last week announced the economic data which showed stable economic growth. Both Hang Seng and Shanghai are down due to concerns over third quarter earnings. 

The RBI will announce its monetary policy review tomorrow. In last about three to four months we have seen that the market goes before RBI meet. This is one thing that will impact the market this week and one should not ignore it. Even though large chunk of the business community and brokerage houses expect RBI to keep status quo, market still will speculate the rate cut. There we expect the market to open flat to positive today.