Markets May Open Positive In Line With Global Cues

The Indian markets seem to be headed for a very positive opening following the global cues today. SGX Nifty, upbeat with gains of 42 points, also indicates a positive opening. 

The positive signals in the global markets are due to a host of economic data released yesterday in the U.S. The American consumer confidence, which is measured by the Conference Board, indicated that the U.S. consumer confidence has touched a five-year high. The reading rose to a high of 72.2 points in October from 68.4 in September. 

The October manufacturing survey was also better than expected, indicating that the American economy is on a path of recovery. The jobs data from the private payrolls firm ADP showed an addition of jobs by private employers in October at the fastest rate over the past eight months. Another set of data also showed a drop in the weekly jobless claims. All eyes are now set on Friday’s non-farm payroll data for October, which won’t disappoint the markets. We expect the bullish sentiment to remain intact in the U.S. markets. 

To further boost investor confidence, the Chinese PMI reading came in at 50.2 yesterday, indicating expansion in the economy in October 2012. The reading is far better than the September PMI numbers, but slightly below the expectation at 50.3.

The U.S. markets, riding on these positive economic reports, posted handsome gains yesterday. The Dow Jones Industrial Average was up by 1.03 per cent to 13,233 at the hour of closing. Nasdaq was up by 1.42 per cent to 3,020 while the S&P 500 Index rose by 1.08 per cent to 1,428. Europe also indicated a very bullish sentiment as UK’s FTSE closed higher by 1.37 per cent at 5,862 while Germany’s DAX rose by 1.04 per cent to 7,336. The CAC-40 in France ended 1.33 per cent higher at 3,475. 

The Asian markets are also trading higher today on the back of the positive numbers from the U.S. and China. The weakening of the yen has lifted the Japanese stocks up with the Nikkei surging up by over 1 per cent. Hang Seng is also up by over 1 per cent. The markets in Shanghai however are flat in trades. 

Yesterday the Indian equity markets remained volatile throughout the day but managed to close in the green with modest gains. The Sensex closed higher by 56 points while the Nifty rose by 25 points yesterday. The market breadth stood in favour of advances. So far the quarterly results have been better and this has boosted the market sentiment. We expect the same to continue today as well. 

Following are the positive global cues we expect in today’s session.