A Positive Open On The Cards

As expected, markets opened with a good gap up yesterday and continued to trade higher over the first half. But some amount of profit booking towards the end of the day saw it gave up much of the gains that it had registered. Results of the Tata Group companies that came out yesterday weren’t really great. That could have set in a mood change towards the end of the day for the markets yesterday. After all, as I have been saying much of the market action over the past many days has remained rather stock specific in nature.

The US Presidents’ resolve to put the economy back on track and chalk out a rather long term plan for managing government finances seems to have worked well for the markets. The European markets which have been trailing what happens in the US were the best example of this yesterday. The FTSE, CAC and the DAX were all up and closed in the green. Two primary reports that helped them up yesterday were the industrial data that came out for the Euro zone along with the US retails sales report. Industrial production in the euro zone has reportedly risen by 0.7% in December, against expectations of just about a 0.3% rise. This along with data on US retail sales which grew by 0.1% in January, against expectations of a flat reading saw the markets inch higher in Europe.

US markets too have been mixed in overnight trades. Stocks there closed marginally higher resulting in the Dow ending in the red but the Nasdaq and the S&P 500 managing to keep their heads above water. On the Asian side, markets have opened on a positive note this morning despite some mixed cues coming from economic data and corporate results. Japan’s economy has reportedly shrunk for the third straight quarter in December. Markets in other countries like Hong Kong have opened after a gap following the Chinese New Year vacations. But overall the mood, including that in Japan is on the positive side today.

There is not much to analyse on how, where and why the markets will open today. You could see the markets open on a moderately positive note and continue trading higher from there. Global cues are on the positive side, and the SGX Nifty trading slightly higher, reinforces what is said above. Overall expect the markets to open in the green and continue trading higher albeit in a tight range.

Let me leave you with some trivia today. The Chinese New Year has begun. This year is the ‘Year of the Snake’. There are many reports doing the rounds of the internet on what one could expect in this year. But as far as the markets are concerned, they say, the experiences in the Year of the Snake have not been good. Remember the great depression of 1929 in the US, or for that matter the twin tower attacks in September 2011? All these were years of the snake. The reason I mentioned this to be a trivia is that, superstitions are to be taken with a heavy pinch of salt. As far as markets are concerned as of now, 2013 seems to be shaping up pretty well. Enjoy and benefit from it as far as the going continues to be good.