Expect A Positive Open, But A Tight Trading Range

What a week the past one has been. It kicked off on a good note and the sentiment only kept on improving, thanks to good corporate results that have been coming in. This was not just the case with India but also globally. In fact, the US markets hit a five year high on close last Friday. European markets have been tracking their US peers for a direction for quite some time now, and Asian markets, especially Japan have been consistently adding strength right from the beginning of this year.

So, where do we begin this week from? Obviously, the good times are likely to continue this week too. The market s likely to salute the good set of numbers posted by Reliance on Friday and this could lend a good air of positivity at least to the broader indices today.  In fact, what is more encouraging is that numbers across sectors are emerging to be reasonably good for the December quarter.

Expectations from corporate India on the results front will slowly wane out to be the major trigger for the markets. Having said that, there are a good number of results yet to come out and this will keep the markets engrossed over the next week. The focus will now shift to what the RBI does at its ensuing monetary review meeting. From a confirmed belief that interest rates are set to be brought down, it is now very slowly beginning to be believed that the RBI could probably take a more measured step in that direction. On the other hand, the government has clearly sent signals on how serious it is to take forward the reforms it initiated a couple of months ago. That should help negate any (in)action by the RBI on the reforms front.

What’s in store today? Well, Asian markets have begun the day on a rather weak note. Japan has snapped its two day winning streak and was seen trading in the red. Markets there are probably watching the BoJ (Bank of Japan) very closely as it meets to discuss and decide on the country’s monetary policy. Among others that have been pressured today include Taiwan, Korea, Malaysia and Hong Kong. China, Indonesia and Singapore are trading positive, though only marginally.

As I said earlier, Indian markets are likely to pick up from where they ended the last week. Reliance will be a key trend setter going into this new week. Investors’ are likely to flock to the stock following its good set of numbers and this will keep the broader indices on a strong footing. You could see a positive opening to the markets (though it could lack force taking cues from its Asian peers). HDFC, Tata Elxsi, Shree Cement, Praj Industries and Raymond are among some prominent companies that will be declaring their results today. Apart from HDFC there is none which could have a major impact as such on the market move.

To sum up, you could see the markets open positive and trade in a very tight range for today. There could probably be some cautious optimism on the streets. Results remain the key trigger. The SGX Nifty is trading up 12 points after a rather weak opening. This further reinforces the view of what can be expected from the Indian markets today.