Expect A Flat Opening For Indian Equities

As expected, the markets have had a very subdued open to the week. Though, yesterday’s decline isn’t a huge one, the continuation of the downtrend is something that is worrisome. But with no major triggers for the market on the positive side, a change in sentiment is not likely to happen any which ways. All eyes will now be fixated on the way India Inc’s performance turns up for the March quarter of 2013. As mentioned earlier, there is nothing much to expect though, as the quarter has not been very great from a growth perspective.

Globally too markets have been facing a lot of pressure with stocks consistently on the decline. However, yesterday panned out to be slightly better for the US markets where investors and traders have probably taken to buying on declines. Economic worries are far from over for the US. There may be some temporary ups in view, but the overall picture isn’t as clear as it should be to warrant a conclusive up trend for the markets there. So far, the year has been quite good, but how far the good times will last is anybody’s bet.

On the other hand, Europe is sure that it has a long way to go before it gets back to its past glory.  But markets out there have been trending according to where the US markets go. Volatility has become the new normal for European markets, and, following the same stocks there were up yesterday. Weaker employment data from the US had led to the biggest weekly fall for the European markets since November. Except Portugal all other European markets did well yesterday. According to reports, the Portuguese High Court struck down some of the austerity measures enacted as a part of the 78 billion euro (USD 101.5 billion) bailout package.

Asian markets which have had a mixed trade yesterday are likely to continue with similar trend. With no major trigger in the near term the markets are likely to Remain range bound. As expected Shanghai is up marginally by 12 points (up 0.53 %) and Nikkei is trading up by 23 points (Up 0.17 %). Only Hang Seng is up significantly by 143 points showing an up-move of 0.70 %. However the Jakarta Composite and Kospi are trading in red marginally. South Korean shares opened nearly flat, pressured by tensions in the Korean peninsula. We are of the opinion that, there are two factors to focus on. First factor is, the yen fell to new multi-year lows, pressured by the Bank of Japan's aggressive reflationary campaign and secondly Asian equities looked for support from a solid start to the U.S. quarterly earnings season.

As SGX Nifty remains unchanged at 5557, we expect a flat opening in the Indian markets with some amount of positive bias. However it would again be a stock specific market.