A Flat Open And Another Sluggish Day Ahead

As expected, yesterday panned out to be a rather dull day for the markets. Having opened in the red, they just could not break out of the negative territory and closed in the red. However, the bearish force wasn’t too much with the Sensex having lost 24 points while the Nifty was down 6 points. Most Asian markets were closed on Monday and Europe followed what happened in the rest of the pack including India. European markets closed in the red, again not dipping so much as to say the day was bad. But nowadays Europe hardly counts as a direction provider in the overall context. Markets there have been taking cues largely from the US and replicating what happens to the US markets.

In the US, markets closed down in what is being described as a profit booking. The year to date rallies across the globe have set expectations on a higher level for the markets. A 6% gain since the beginning of the year is something that is unique in a way for markets that have languished amidst macro worries on the economic front.

Among Asian markets, Japan has opened well and is trading rather strongly today. The frontline Nikkei is trading up by more than 200 points. The SGX Nifty too has been hovering in the positive zone. However it is just about managing to keep its head above water.

What does all this signify for the Indian markets? You could see another dull day of trading today. Overnight cues suggest that they could open on a rather flat note and trade with a slightly negative bias throughout the day.

The days ahead could well be similar. There is no major news driven trigger in place for the markets and a stock specific action is what will remain the norm. Corporate results for the December quarter are now in the final stages. Almost all frontline companies and many of the others have already come out with their numbers. So far all seems to be in control at least on the results front. We await the budget which is not too far off. That will be the next big trigger for the markets which are now looking at the pro-market finance minister to come up with something that will help them sustain their good  run so far in the year.

So, do not expect the market to do much today. It could be another day of wait and watch as investors and traders play the caution game in absence of any meaningful trigger. By the way, there is one piece of news this morning which should set your minds thinking about the future of interest rates. Headlines are screaming about D Subbarao, the RBI governor being worried about ‘high interest rates’. Well we would not comment too much on that statement now and rather wait and watch what the markets make of it.