A Flat Or Mildly Positive Open On The Cards

Its been a good week for the markets so far. As expected, yesterday was a rather calm day for the markets with the benchmark indices moving up smoothly throughout. With no major triggers in the offing until the results season begins in a week or so, it will continue to be a stock specific market. It is not for the first time that we have been saying this, but it stands good and if you look at yesterday’s move, it was completely in sync with this postulate. The Ambani’s have signed a deal for the first time after they patched up and this saw all the Reliance group stocks soar in intraday trades. In fact it led the way for the market to end in the green for the fourth consecutive day yesterday.

European markets which opened on Tuesday after the Easter break saw a cautious start with Cyprus in mind. However, a better than expected data on manufacturing in the Euro zone helped stocks gain momentum to begin the month on a positive note. But remember, that region is yet to come out of the woods and it will be some time before it can really come clean and lead a normal life. The PMI for the manufacturing sector reflects the downturn in the factories of the region. It dropped to a three-month low of 46.8 from 47.9 in February. However, it remained higher than the initial estimate of 46.6. Unemployment too has remained higher at 12% particularly in Greece and Spain where trouble first began. Point is, Europe will continue to haunt markets in phases.

Overnight, in the US, the Dow and the S&P 500 closed at a record high yesterday. At the back of this stellar move were factors like the strong medical reimbursements which saw health insurance companies’ gain and factory orders which have been rising.

On the Asian front the day has begun on a rather mixed note. Probably the geopolitical situation following the spat between the Korea’s is impacting the overall sentiment of the Asian region. Is the market discounting that factor too low? We probably need to watch that closely. Any blowup of the situation could lead to troubles for the markets not just in the Asian region but also globally.  Meanwhile the weaker Yen continues to fuel the Japanese market. Korea, Singapore, Malaysia and Hong Kong are trading in the red, while China, Indonesia and Taiwan are in the green this morning.

Back home, with no major cues emerging on the global front, markets here are likely to follow the trend of the past four days. As we have been reiterating, there are no major macro level triggers and yet another stock specific day is in the offing. Though the SGX Nifty is trading in the red, down by about 34 points, you could see a rather flat to positive open for the markets today. The day is expected to pan out depending on further developments on individual company fronts. Overall it could be a rather flat to mildly positive trading session today.