Positive Sentiment To Continue

Here is an interesting observation. Every time Reliance Industries announces a gas find, the stock zooms up. But what is even more interesting is that, when the stock goes nowhere for a lengthy period of time, it is only then that Reliance Industries finds gas. The first of the gas finds after the company received an extension for exploration, this find is billed to be the biggest in the last two years. How much of gas finds its way out is something that would be clear only over a period of time. But for now, it has set the stock on fire. Amidst the generally positive trading sentiment, RIL acted as the most important catalyst to a superb start to the week yesterday. The stock was up more than 5%. Whatever be the reason, the markets have seen a good start to a week which will culminate into the monthly expiry on the F&O front.

Will the momentum continue into the week? Well at least for today the centre of action will be the big numbers that are to come up. It would be a rather stock specific market with no downward pressures. Any adverse results will lead to a drop in that particular counter and not impact the market in general as such. With the results season now nearing an end the focus once again will shift to what the RBI will do in its monetary policy review meeting. The noise about an impending rate cut is becoming rather louder. There is a limit to how much of expectations can be built around just one single factor time and again. But the way the markets are, you will always find that it does happen. The market is already pricing in a rate cut with expectations of around 50 -75 bps being expected to be cut in the whole of FY14.

On the global front, two key markets remained closed on account of holidays yesterday. The US was shut on account of Memorial Day while in the UK it was a bank holiday which kept the markets shut. Among the other European markets, action remained largely positive yesterday with the CAC and the DAX closing almost a percent up.

Asian markets have opened mixed this morning but the bias is clearly positive. Japan as usual leads the way, but trades in a rather confused manner compared to what it has been doing of late. All others too seem to be in a similar state of mind. Hong Kong, Malaysia, Indonesia, Singapore, Korea and Taiwan without any exception are following in the footsteps of Japan and trading in the green. The day is expected to remain that way with no major intraday triggers in place for the markets today.

The Indian market is likely to continue from where it ended yesterday. As pointed out earlier, it could turn out to be a rather stock specific market today with many big numbers set to come in. On the macro front, there is no big trigger in sight before end of the week nears when the GDP numbers will be out. Until then corporate results are the main factor to watch out for. It would be a good idea to play stocks on a case to case basis rather than look out for any bunched triggers for the markets today. Pharma remains the centre point followed by banking.