Headed For A Negative End To The Week

Markets have their own mind and this is amply reflected in the way they behaved yesterday. After a positive open, trades remained quite volatile ahead of the declaration of WPI numbers. Even after the WPI numbers for the month of January 2013 came at a surprisingly lower 6.62% against the 7% that was expected, markets reacted to the set of numbers that frontline companies came up with yesterday to trend lower during the later part of the day.

German and French GDP numbers for the fourth quarter of 2012 were announced yesterday. Having come at a reasonably lower level than what was expected, they pulled down European markets. In fact, this was another reason that Indian markets were retraced over the second half of the day yesterday.

In the US there was a lot of deal led action in the markets on Thursday. Markets there ended mixed yesterday with the S&P and the Nasdaq marginally up and the Dow down 10 points. Among the major deals that drove the US markets yesterday there is one particular deal that needs to be mentioned. Soros Fund Management LLC run by the legendary George Soros has reportedly exited Linkedin, Amazon and Groupon. On the other hand Warren Buffett’s, Berkshire Hathaway has been hiking its stake in some leading companies including ADM and Verisign. This flurry of deals has kept the US markets busy through yesterday and the impact of it will come in for today too.

Meanwhile, Asian markets seem to be headed for a rather poor end to the week. Japan has been trading quite weak today followed by Singapore, Korea and Malaysia. On the other hand, Hong Kong after having opened in the red was seen making a comeback. But it was just on the edge and could slip into the red again.

Tepid results from Tata Motors and SBI combined with a weak sentiment that is prevailing this morning on the global front, could see the Indian markets open in the red. There could be some pressure on the markets, throughout the day and the last trading day of the week could well end in the red. But there is a flip side to it. The SBI management has said that the worst may have been over for it on the bad loans front.  Now this could be a good signal for the markets to latch on to. If it so happens, there is a possibility that you may see a surprise rally today. After all the markets always have a way of surprising you.

Weekends are normally a time to exit some positions so that you can start your new week with a clean slate and some good ideas that will emerge until then. But as for today it would be a prudent strategy to get your hands on the frontline stocks that are beaten down on results yesterday.

Corporate results are almost done with. The buzz around the budget is getting louder. The Finance Minister has a hard task at hand of balancing politics and economy. Will he succeed? The expectations are quite high, but he has always come out of the most difficult situations to deliver as expected.