Markets May Open Positive

The Indian markets may open on a positive note, in line with other global Markets. The SGX Nifty is currently trading higher by 14.50 points at 5587.50 indicating a positive start for the week.

The weekend closed on a sad note as political party Shiv Sena’s founder and mentor Bal Thackeray breathed his last on Saturday afternoon at around 3.30 pm. He was laid to rest with full state honours yesterday at Shivaji Park, Dadar. As a mark of respect, the Federation of Associations of Maharashtra (FAM) has asked its constituents and the trading community to observe a bandh in Maharashtra though there was no such call by the Shiv Sena.

The markets closed on a negative note last week after some of the key economic data disappointed the investing community. The IIP registered negative growth of around 0.4 per cent for the month of September while inflation for October was on the higher side with the WPI at 7.45 per cent and the CPI at 9.75 per cent on a YoY basis. The trade data was reason enough for a sell-off on the streets. Meanwhile, provisional data from the trade ministry showed that exports fell by an annual 1.6 per cent to USD 23.2 billion in October while imports jumped by 7.4 per cent to USD 44.2 billion, leaving a trade deficit of USD 20.9 billion.

Meanwhile, media reports suggest that Finance Minister P Chidambaram has hinted at the finalisation of the amendments to GAAR, the controversial law against tax avoidance through foreign investments. Amendments to Chapter 10A of the Income Tax Act are also believed to have been finalised. These will now go to the prime minister for approval. GAAR therefore appears to be under control.

The U.S. markets on Friday closed higher in the positive territory with indices like Nasdaq, Dow Jones and S&P 500 pulling the curtains down in the range of 0.2 to 0.5 per cent. According to a Bloomberg report, U.S. and China, the world’s traditional twin sources of growth, are planting seeds to lift the world economy from its mid-year slowdown. Among the green shoots indicating faster expansion are stronger housing demand and hiring in the U.S. and an accelerated rate of factory output and retail sales in China. 

The European markets inched lower in the negative territory with major indices like CAC, DAX and FTSE closing their trades with deep cuts of more than 1 per cent. According to Bloomberg reports, the Spanish bonds fell, pushing 10-year yields to the highest level in six weeks, as a Euro zone report showed that the region’s economy contracted in the third quarter, pushing it into recession.

Asian markets have opened in mixed bagged with Hang Seng and Nikkei are up 0.45 and 1.46 per cent respectively while Chinese market Shanghai Composite is trading marginally lower, down 0.07 per cent. According to Bloomberg report, Asian stocks, oil and the Australian dollar advanced after U.S. President Barack Obama expressed confidence that he and Congress would reach a budget agreement. The yen weakened.

The rupee has again moved downwards and has depreciated significantly against the USD, currently trading at Rs 55 per USD, which is not a good sign for the Indian economy. Brent crude has remained almost stable at around the level of USD 110 per barrel since the past couple of weeks.

In Conclusion, we expect the market to remain volatile for today and also latter during the week, after the winter session of parliament is going to begin from Thursday and therefore Market participants would watch out keenly on the same. We would advise readers to play with caution.