Expect A Gap Up Opening - Indices Marching Towards All Time High Levels

In stock markets sentiments play an important role and sentiments do not take much of a time to change. And similar things seem to have happened for the Indian equity markets. While a few days back there was a continuous negative news flow, keeping the markets under check, now the scenario has changed. There is lot of positivity on the street, so much so that the markets even shrugged off the higher inflation numbers.

The first and the foremost news has been the Reliance Industries (RIL) announced its Q2FY14 results which is in-line with the street estimates. RIL is one stock that has been a drag on the Sensex as it remained stagnant. As the financial performance has been better we feel the stock is likely to witness an up-move possibly taking the indices to new high levels.

While this has been the scenario on the domestic front the global scenario is also looking good. Asian stocks rose, as Senate leaders said they’re optimistic they will forge a deal to reopen the U.S. government and avoid a breach of the debt limit this week. US senators said they were closing in on a deal Monday that would reopen the government and push back a possible default for several months, though many hurdles remained as a Thursday deadline drew near. Ahead of a meeting with President Barack Obama, the Senate's top Democrat and top Republican both said they were optimistic that they could soon reach an agreement that would allow them to avert a looming default and end a partial government shutdown that has dragged on for 14 days so far.

The impact of the same is clearly visible with Asian indices witnessing an up move. Nikkei is up half a percentage, Hang Seng is up 0.62% and KOSPI is up 0.81%. Even Shanghai is up marginally by 0.08%. The biggest beneficiary is SGX Nifty which is up by more than 60 points providing an appreciation of more than 1 %. We expect the markets to open gap up today and would not be surprised if the Nifty marches towards a all time high levels of 6357.