Global Markets Rise: Will Nifty Follow?

The Indian markets are expected to see an upward opening today on account of a positive sentiment globally. Investors had been increasingly worried over the fiscal cliff last week. However, confidence over a consensus being reached to avoid the cliff has been increasing.

On Sunday, American President Barack Obama expressed confidence in the situation being dealt with in order to avoid the series of spending cuts and raised taxes. Developments around this situation have been indicative of a timely compromise being reached at. This had the global markets heave a sigh of relief, thus pushing the markets upwards. The European indices closed higher in the range of 2.36 per cent and 2.95 per cent while the U.S. markets ended the day higher in the range of 1.65 per cent and 2.2 per cent.

What also had the American indices moving higher was its upbeat housing data. The National Association of Home Builders/Wells Fargo housing market index rose by five points to a seasonally adjusted level of 46. Though the reading is distant from the 50 mark, which indicates an equal number of builders in view of sales conditions as good versus poor, this has been the highest level the index has reached since more than six years. Also, the existing home sales rose from 4.69 million in September to 4.79 million in October, indicating a growth of 2.1 per cent.

The upward trend in equities was also coupled with a rise in oil prices that escalated with the rising violence in the Middle East. This issue has been raising concerns over oil supplies from the region which accounts for a third of the world’s crude supplies. A cumulative of global factors also led to a 1 per cent rise in gold prices, the commodity recovering the previous week’s losses.

Though relieved for the moment, investors would be closely eyeing The Bank of Japan press conference that is scheduled to be held later today for movements on the monetary policy front. Later today, Federal Reserve Chairman Ben Bernanke is also to speak. These events are likely to determine a short-term positive or negative trend to add to the current situation of the markets.