Political Uncertainty and US Data To Weigh On Markets
DSIJ Intelligence / 04 Apr 2013
The markets had a weak session yesterday in an impulsive sell-off at the end of the day. This left intrinsic weakness in the markets. This coupled with subdued global macroeconomic factors are expected to weigh on the markets today.
The markets had a weak session yesterday in an impulsive sell-off at the end of the day. This left intrinsic weakness in the markets. This coupled with subdued global macroeconomic factors are expected to weigh on the markets today. Globally, the mood is sour and markets are expected to track the downfall seen internationally.
According to data from ADP (Automatic Data Processing Inc), the US economy added 158000 private sector jobs in March 2013. This was significantly lower than the previous reading of 237000 and estimates of 200000.
At the same time, the ISM (Institute of Supply Management) non-manufacturing Purchasing Managers’ Index (PMI) came in at 54.4 in March 2013. This figure was lower than February 2013’s 56 and expected 55.8.
The above sets of data ruled markets globally. Disappointed by the slower-than-anticipated growth, the US markets ended the day lower. The Dow, Nasdaq and S&P ended the with losses of 0.76%, 1.10% and 1.03% respectively. The effect of this data also seeped into European markets. The FTSE, DAX and CAC ended the day lower by 1.09%, 0.87% and 1.32% respectively.
Asian stocks too have started trading on a weak note today. The Asia Dow, Nikkei and Singapore are trading lower by 0.67%, 1.49% and 0.32% respectively. The Hang Seng and Shanghai Composite are closed for trading today on account of Ching Ming festival.
Domestically, yesterday’s sell-off was triggered by BJP leader L K Advani hinting at early elections in 2013. Political uncertainty has been weighing on the markets since the pull-out of support by DMK from the UPA alliance. This has been causing drastic movements in the markets as seen yesterday. The markets did start on a weak note but traded in a range-bound manner for most of the day. However, after these comments, the markets took a deep dive. The Sensex ended the day lower by 239.31 points at 18801.64, down by 1.26% and the Nifty ended the day lower by 75.20 points at 5672.90, down by 1.31%.
This has caused significant weakness in the Indian markets, which is expected to show effect today as well. In addition to this, international markets have been under stress as a result of disappointing data from the US. These factors are expected to lead to a negative opening today.
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