Expect A Positive Open And A Calmer Day

From one worry to the next, that is currently the story of the markets. Economic data has been pointing towards a slowdown for quite some time now. While GDP growth came in at just 4.4% for the first quarter, the HSBC PMI indices too suggest, a slowdown in industrial growth. But then you get too much used to negative news and try to focus on whatever positive that comes your way. Yesterday’s market behavior was probably of the same kind.

Despite a weak reading on the HSBC PMI front as far as manufacturing is concerned, it focused on what looked good. On the whole the Asian region saw some good moves in the PMI number for the month of August. This was more so in the case of China, where an impending slowdown has been a major cause of concern for global economies and in turn markets.

The biggest solace yesterday was an improving rupee. The currency gained in strength against the USD to close at Rs 66.02 to a dollar. Though this was surely above where it had ended the week, there seemed to be less of volatility involved yesterday.

The faith of the market now lies in the government. Every quarter is expecting a fillip to come in from the policy measures to be taken by the government. The measures initiated so far and the ones in the wings are likely to bear fruit going forward. Is the worst over? Well, it would premature to draw a conclusion on that vital question as yet.

However, many of the short term serious worries seem to be on the backburner at least for now. The US-Syria war scenario has considerably simmered down and the currently volatility too has come down over the past couple of trading sessions.

All this has been backed well by global market moves. The improved PMI numbers for the month of August along with an upbeat reading for China helped markets up in Europe yesterday. In fact, the upward buoyancy of the European markets provided an extra fillip to the Indian markets in the post noon session keeping the overall mood positive throughout the remainder of the day. Nothing on the US market front as they remained closed on account of Labour Day. But the month is sure to kick off today based on some very important economic data points that are to be released.

Asian markets opened well in the green today and are trading with a positive bias. The positive sentiment that set in following some improvement in the manufacturing PMI numbers globally has been helping them trade positive today too. Every market without any exception is currently trading in the green led primarily by Japan where the Nikkei is up almost 3% on a weaker Yen. China, Hong Kong, Indonesia, Malaysia, Korea, Taiwan and Singapore are all up in a range of half a per cent to one-and-a-half percent. Some weakness is being observed in the Straits Times which is moving on the borderlines. This nervousness in Singapore is probably due to the markets’ wait for its PMI numbers due for release in the later part of the day.

The SGX Nifty is trading up 17 points currently. All in all, with nothing much to disturb, looks like the markets are headed for a positive open and a calmer day today. As has been happening, the rupee will continue to be a crucial factor even today.