A Reasonably Good Day Ahead

There are many a time when the markets will go just the other way than what is expected. Yesterday was one such day. It was expected to open flat and trade with a negative bias taking cues from global markets, particularly after what had happened in the US. However, it just turned the other way round. After opening up, though not much, it traded in the green for most part of the day and finally gave up all gains to end the day in the red.

The earnings season seems to have begun on an optimistic note. Overnight, the US markets rose, snapping a two-day losing streak as companies there were reported of being very positive on their earnings expectations. Earlier in the day the European indices too closed solidly positive, riding on the positive earnings season kickoff in the US. Expectations of the ECB leaving rates unchanged are getting louder and are likely to play on those markets for today.

Asian markets opened mixed this morning but were seen trading in the green as the day progressed. Except for China and Korea, all other markets were seen trading positive. Japan continued with its rise with the Yen hitting a fresh low against the dollar. Hong Kong and Singapore were picking up from where they started and trading up by a quarter of a per cent. The SGX Nifty which had opened on a very solid note today is currently trading up 11 points.

The Indian markets are likely to note of these international developments and open in the green for today. How strong will the opening be? It is better to wait and watch until it happens. There are a couple of party spoilers this morning. Talks of the government raising LPG prices by Rs 100 per cylinder and prices of Diesel by Rs 1.5 per litre could hurt the sentiment to some extent.

One good thing about the markets is that, FIIs have kept up their interest in Indian equities. After pumping in more than USD 23 billion last year, they continue to buy Indian equities turning net positive buyers each day. The sustainability of this factor is very important from the market perspective. After all it is the FIIs which have the capability of pushing markets into a newer orbit.

Initial results seem to suggest that India Inc too is on its way to having a good results season. Markets are likely to follow these at least for some time now. Among the more popular ones Cera Sanitary Ware and Sintex Industries are to declare their results today. Indications from these two companies will throw some light on one key sector – Real Estate. For today, expect a positive opening and range bound trade with a positive bias.