A Fresh Week To Open On A Weak Note

He first gave you a budget which hardly inspired anyone. In fact the markets took note of the ambiguity and gave in on Thursday only to recover after a clarification from the Finance Ministry. The pressure exerted on the markets by the ambiguity of the budget provisions considerably eased on Friday. What next? This is what all thoughts are right now focused on. There are no immediate triggers in place for the markets. In fact there is nothing on the cards that could be of interest to the markets this week. Hence the markets for now will look at individual stocks and take direction accordingly.

Meanwhile on the global front, the US finally brought into effect cuts in government spending to the tune of USD 85 billion between now and October, which could in the longer term hurt the economy, result in lower jobs and also impact military readiness of the US. Unless a legislative remedy is found for this sequester it would come to haunt the markets, though presently there seems to be no direct impact of it on them.

On the European side, markets have been taking cues from various quarters. Sequestration in the US and the economic data points emanating from China have been hurting markets in that part of the world. I have mentioned this even earlier, that European stocks have more to depend on external factors than their own and this will continue for at least some time in the future.

On the Asian front, data about Chinese manufacturing growth coming to a halt is what the markets will focus on. Shanghai has already been reeling under this pressure and it is only getting worse. Japan has its own sets of strengths in place right now and markets there are well reflecting these. The Nikkei continues to rise and is currently trading up, though only marginally as compared to what it has been doing over the recent past. Among other Asian peers, none other than the Indonesian market is trading positive today.   China is the worst hit followed by Hong Kong and Singapore. Taiwan, Korea and Malaysia too are trading in the red. The SGX Nifty is currently trading down by almost 35 points. All this tells you the weakness around us.

So, coming back home, markets are likely to take cues from global developments and witness some weakness at the start of the week. It could open in the red with the bias remaining on the down side throughout the day. As said earlier, markets will now begin focusing on stock specific action to take broader direction.