Global Cues Point To A Positive Open

On Friday markets started off on a weak note and ended the day in the red. But, overall the week was quite mixed for the markets. The RBI had set the tone for a positive bias by cutting interest rates and also injecting liquidity by having brought down the CRR. Mixed cues from economic data on the global front including the US and China, kept the markets in a volatile state last week.

But on the global front too, data emerging on the economic landscape seems to be driving the markets higher. The US markets are trading at their five year highs while China’s PMI data seems to be suggesting a clear improvement in the fundamentals of the economy.

With all the right positives in place, the week has kicked off on a strongly positive note. Reacting to the positive jobs data in the US and the Chinese economic expansion as can be seen from its PMI numbers, specifically on the services front, Asian markets have opened in the green and are building up strength from where they have begun.

All, without exception are trading positive. Of course the strength of the rally today seems to be rather moderate. Leading indices including the Japanese Nikkei, the Singapore Straits Times, the Malaysian KLSE Composite and the Taiwan Weighted are trading up half a per cent. Others are up by an average on third of a per cent. The best so far seems to be the Chinese market which is trading up  by almost one-and-a-half per cent.

Taking cues from all this, Indian market too is expected to open positive. Will it be a strong opening? Well I would rather doubt that. As I have said earlier too, there will always be something that will come in the way of the rampaging bulls, scuttling the positive bias. Reports of the RBI Governor going on record, to state that ‘India has limited room for further rate cuts’ could come as a big negative surprise for many. Will the markets react to this statement and how deeply, is something that we would want to wait and watch. That brings us to tell you, though the markets are expected to open up today, wait for it to settle down in a range for any further action.

There are a whole lot of triggers on the global front, particularly the US which will unfold for tomorrows trade. For now, the global sentiment seems to have set a stage for a positive opening and a stock specific trading day ahead. The impact and dependence on corporate results is ebbing out and the focus will soon shift to newer triggers. We will keep you updated on what you ought to look at while trading safely and earning nicely. Here’s wishing you a good trading week ahead.