Cliff Manoeuvring Leads To Jittery Trading
DSIJ Intelligence / 28 Dec 2012
With all of 3 days left for the deadline for the US falling off the cliff, there is increasing nervousness in the markets. Developments on the fiscal cliff deal being reached (or not) have been ruling the markets. Global markets have just come out of the festive season holidays and the US markets are being truly held by the leash by fiscal cliff negotiations. There was a downfall seen in the US markets and then some recovery towards the end. Mixed developments on this front led to a negative closing of roughly 0.14%.
At the same time, in the other end of the world, hopes of stimulus spurred optimism in the Japanese markets. These mixed global cues led to a positive opening in Asia today and a positive day for European stocks yesterday. The Asian markets are trading higher in the range of 0.14% and 0.77%. Europe closed yesterday higher in the range of 0.26% and 0.59%.
Domestically, there is a proposal with the oil ministry for diesel prices to be raised by Rs 10 per litre over a 10 month period and a similar increase in kerosene prices over a two year period. This will come into effect if the proposal is passed in the ministry.
The National Development Council (NDC) approved the 12th Five-Year Plan yesterday. Planning Commission Deputy Chairman Montek Singh Ahluwalia said the growth rate could at best be eight per cent, given a weak global economic recovery and that India’s 2012-13 growth was likely to be 5.7-5.9 per cent. Also, came in the Prime Minister’s comments wherein he said that achieving 8% growth, following a 6% in the first year would be an ambitious target. He also said that although global market conditions cannot be changed, steps can be taken domestically to reverse the slowdown.
Taking cues from global and domestic factors, the SGX Nifty has been seeing flat trading. These global cues were affecting markets yesterday too. However, trading was volatile to a larger extent yesterday on account of the F&O expiry. The markets started on a positive note, traded in a range-bound manner all day and finally ended the day negative.
Today we expect a mild opening on account of the uncertainty created by global cues.
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