A Flat Opening And A Volatile Day Ahead

Markets across the globe disappointed last week, snapping their winning streak. A mixed set of economic data that came out took the markets down. Well, some call it a correction that was needed while others are reading too much between the lines. As it stands, at least on the Indian front nothing has changed fundamentally. Corporate results are still coming in and seem to be fairly in place. Of course there have been some disappointments, but these have well been already factored by the markets.

The RBI did what was expected, in fact it went one step ahead to cut the CRR thus infusing liquidity in the markets. But as I have always been saying, there is bound to be something that will come your way when all else is good and spook the onward march of the markets. This time, the CSO managed to do that. Projections of a 5% growth for the Indian economy in FY13, has had the markets worried for good reason. But the Finance Minister has been rather quick in discarding those estimates and is hopeful of a higher growth this year. Well, we would rather assume, he knows best.

Meanwhile in the US markets pulled back and snapped their five-week positive move to end in the red last week. But there is hope in the US too. Its trade data came in positive, where its deficit was reported to have come down by almost 21% in December. This is billed to be the biggest drop in four years. This is expected to put some cheer into its overall growth figures after it’s Commerce Department reported a contraction of 0.1% in GDP for the fourth quarter.

On the Asian front, China’s exports and imports have been showing an encouraging trend. They grew at a faster-than-expected clip in the month of January. This augurs well for the overall global economic condition and the markets are likely to take cues from these developments to trade this week.

While the macro scene looks encouraging outside of India, the flip flop over growth estimates for the current fiscal between the Finance Ministry and the CSO will play on the market minds today. You could see a rather dull opening and trading within a tight range for the markets today. The bias is likely to remain negative.

As I have said earlier, the next big trigger for the markets will be the Union Budget. All eyes are now on the Finance Minster to deliver something that will help the markets sustain their upward momentum. For today stick to stock specific action. Well, you will be trading on not two, but three exchanges from today. More choice on where to trade and for keeping company with the elite list of Indices like the Sensex and the Nifty will also be the SX40. How much of all this will translate into real benefits for investors? That could be another topic of discussion.