A Pressured Opening To The Week

The earnings season kicks off this week. The first set of performances for the March quarter and Financial Year 2013 will start coming in this week on. So what can be expected of the markets? To look at something new to trade beyond what has happened of late? Or will it stick to the gloom that has been spread by political uncertainty over the past one odd week? Frankly speaking, there isn’t going to be much of a difference that any of these factors would make to the market sentiment.

Corporate results for the March quarter aren’t looking to be any good so as to expect they could turn the market trend. In fact after the downtrend that the market has hit over the past week or so, they could turn out such as would exacerbate the situation further. But hope is what the world hinges on in times of distress.

It is probably going to be that kind of a beginning to the markets this week. Hopes of a change in sentiment will keep participants in a mood wavering between whether to take a risk by buying into the dips or wait until some clarity emerges on the direction of the market. In our view it would be important to wait until at least, the first set of big numbers comes out. This will happen only towards the end of the week when Infosys will report its performance for the March quarter and full year. But what bears more significance is the performance of other sectors particularly manufacturing which will determine the real road the economy takes over the next one year or so.

Meanwhile, the week closed on a dismal note for the US markets which caught up with the reality of a weak jobs data after having rejoiced Japanese monetary easing earlier. US stocks declined after the data showed that fewer jobs came the way of Americans in the month of March than what had been expected. After having created 268000 new jobs in the month of February an 88000 addition in the month of March looks to be too pale. The Jobs data is an important pointer in the US context as it will determine the end of the bond buying exercise initiated by the government in order to ease economic pressures.

European markets which have been seeking direction primarily from the US were found to be more concerned about Americans not finding jobs. Markets there, hit a month low on the weaker jobs data that came out of the US. European weakness is what we are all used to by now. Yet, when their markets crack, they do have some repercussions on the Indian markets as well.

Closer to home, Asian markets have been behaving quite mixed over the past week. The beginning to a fresh week seems to be on similar lines. Japan continues to be on an uptrend but all others are in the red. Taiwan, Korea, Indonesia, Hong Kong and China are all in the red this morning. Singapore too has seen a negative opening and is trading with a downward bias and the SGX Nifty which gives some indication of what can be expected of the Indian markets is trading more than 20 points down.

All this indicates to a weaker opening for the Indian markets today followed by a rather insipid or, maybe even a pressured trading day. Corporate results will be the biggest trigger for the markets for some time now. Beginning towards the end of this week, all eyes will now be watching how India Inc did in the March quarter of 2013. There is nothing much that can be expected on that front though.