Global Cues Uncertain, Expect Edgy Opening

The Indian markets may lose its 3 day winning streak today. The earnings season has been holding the leash and is likely to continue to remain the dominating factor worldwide. Indian markets were charmed after the results of RIL on Friday. Other results too have managed to provide to positive sentiment across the markets. Earnings have been positive across sectors and industries thus displaying overall improvement. However, some amount of consolidation can be expected today, given the fact that we saw a 1% rise in the last one week.

The global mood had been positive last week due to upbeat Chinese data, encouraging comments from the German Bundesbank and a strong US closing. However, recent events have been causing some amount of choppy trading. Data from Asia has managed to boost markets in both in Asia and in Europe yesterday. However, today Japan has been dodgy ahead of the two-day policy rate meeting at the Bank of Japan. There have been expectations of the central bank introducing deflation-fighting measures at its meeting. Ahead of the conclusion of this meeting, Asian stocks have been getting increasingly edgy. They opened on a positive note but are now trading lower in the range of 0.11% and 0.95%. This uncertainty is also likely to affect Indian markets today and is likely to cause a mild to negative opening.

The uncertainty and dodgy trading however will come to an end once the Bank of Japan announces the outcome of its meeting. There will be a firm directional trend in markets and earnings will again run the show. The US, on Tuesday has major results lined up for announcement. These include Google, IBM, TI and Verizon.

Domestically, Hindustan Unilever and Kotak Mahindra Bank are to announce their results today. Hindustan Unilever being a heavyweight has the potential to affect the directional trend of the markets. Moreover, directional trend will also be affected by the decision of the Bank of Japan and the Europe opening. As for the opening, it’s expected to be weak due to mild consolidation and uncertainty from Asian peers.