Strong Global Cues To Help Markets Open Positive

After a couple of days of worrying the markets seem to have resumed their upward march once again. This is as true in the Indian context as it is anywhere across the globe. The Indian markets yesterday ended on a strong note with the Sensex rising by more than 265 points while the Nifty was up nearly 86 points. European markets too closed higher rallying to a four and a half year high at close. Stronger than expected retail sales data in the Euro zone helped markets higher as they also took cues from the US markets.

Losses incurred in the aftermath of the financial crisis that hit the US in 2008 seem to be covered now. The US markets too have rallied very smartly over the past couple of months to scale newer heights. Worries of a fiscal cliff and later the sequestration are now behind the markets which have been going up in a unidirectional move of sorts. An improvement in the economic conditions has prompted markets to believe that all is well as of now. The USD 85 billion spending cuts that came into force are looked upon as not impacting the markets immediately and hence worries on that front have been conveniently brushed aside. Will it come back to the haunt? We don’t know as yet. Right now the sentiment is bullish and markets are certainly riding high on them.

As mentioned earlier, Europe has been closely following cues emanating from the US and expectations of a rate cut very soon are keeping markets on the higher side in that part of the world too. Yesterdays market performance in the Euro zone puts lends that additional air of positivity to global markets and especially our own.

On the Asian front, the day has begun quite strongly. There is not a single market which is looking weak today. From Taiwan and Korea to Singapore and China, there is a good amount of strength that markets are reflecting today. Hong Kong, Indonesia and Malaysia too are faring well. The SGX Nifty is currently up by a good 25 points and this tells you where we (the Indian markets) are headed.

There is no doubt on where the markets will open today. All cues are pointing towards a green open and a fairly positive trading bias for today. There is a strong backing in the way markets closed yesterday and it will obviously draw strength from there to begin with. The Dow’s superb overnight performance which is also reinforced by the way other Asian markets are presently trading, lends the second level of strength to the markets for today. All in all, it seems to be a good day to trade today. Small but significant noises coming out from the Budget fine print are creating those short spurts and troughs in the market. This is likely to continue at least for some time to come. It makes sense to go by each day as for now. All in all, expect a fairly strong open and positive trade for today.