Expect Another Strong Opening For Indian Equities

After witnessing a strong up-move yesterday, Indian equity markets are poised for another positive opening today. A strong positive news flow on the macro front from global economies is a prime reason behind the same. First and the foremost news is from US, where the Institute for Supply Management’s manufacturing index climbed to 50.7 in December 2012 from a three-year low of 49.5 in November 2012. This is very positive news as it clearly indicates towards moderate recovery in the US economy.  After reaching the Fiscal Cliff Deal, this is the second positive news from the US markets. 

Another positive on macroeconomic front cue came in from China where the Services industries showed a better expected growth. China’s non-manufacturing purchasing managers’ index stood at 56.1 in December 2012 after a 55.6 reading the previous month, the National Bureau of Statistics and China Federation of Logistics & Purchasing said in Beijing today. A reading above 50 indicates expansion. In addition Bloomberg reports suggested that, Gross domestic product is poised to expand 8.1 percent this year, up from 7.7 percent in 2012, according to the median estimate of economists surveyed last month.

All these news made a positive impact on the global markets. US markets closed on a very positive note with Dow Jones closing up by 2.35 per cent and even S&P closing up by 2.54 per cent. NASDAQ was up 3.07 per cent. Even the European markets taking the cue of Fiscal Cliff Deal had closed on a strong note.  No wonders all the Asian equity indices are trading in green today. Shanghai is up 1.61 per cent and Hang Seng is marginally by 0.15 per cent. Even the other markets like Jakarta Composite (Up 0.75 per cent), KLSE Composite (Up 0.66 per cent) and Taiwan (Up 0.65 per cent) are trading in green with significant gains. Japanese Markets are shut today. Today investors can look forward for global cues like US Jobless claims. 

As regards the Indian markets SGX Nifty is trading well above the psychological 6000 level mark at 6062.50. We feel all the above factors are indicating towards a very strong opening for the Indian equity indices. For further guidance, please read our take on Index trends and stocks that are expected to be in action today.