A Flat Open But A Positive Bias

Markets managed to begin the new fiscal on a positive note. This, despite the deceleration witnessed in the PMI data, which pulled it down from its highs. There have been no major triggers for the markets for a long time now. In fact political uncertainty has been spooking the markets on the domestic and the global front too.

Many in the know have been voicing the same concern about Europe for quite some time now. the European problem is far from over and will surface time and again to destabilize the markets. This is a known fact now, but it still continues to rattle markets the world over. The Cyprus issue is a case in point here. However, European markets per se have been doing well despite all the uncertainties that surround them. March 2013 has been the tenth straight month where they closed in the green. Positive data emerging from the German retail market and banks having reopened in Cyprus without any visible signs of panic have been leading the positive sentiment in the markets.

Meanwhile, weaker manufacturing data in the US brought down its benchmark indices from their record highs. The Institute for Supply Management’s factory index fell to 51.3% in March from 54.2% in February.  This weakness along with Markit’s reading of US manufacturing in March which came in at 54.6%, against the 55% that analysts had expected pulled down the US markets on the first trading day of the new fiscal.

The spillover of the shaky sentiment is very well being reflected in the way Asian markets have opened today. Japan has been at the losing end but the other markets though trading in the green have been lacking in strength. The weakness of the Yen has pulled down the Japanese market in early trades with the Nikkei losing almost a per cent. China, Hong Kong, Indonesia, Singapore Korea and Taiwan are all trading up but only marginally. The SGX Nifty has been trading in the red too.

All of the above put together, signals a weak opening for the Indian markets today. The overall sentiment of the Indian markets has remained positive for almost three days in succession now. There is no reason why this should change at least over the next 8 -10 days. It is only after the results season kicks in that the markets will start taking cues from what emerges from the numbers and play out accordingly. For today, expect a rather flat opening but a fairly positive bias for the markets.