Markets To Sustain Up-ward Momentum
DSIJ Intelligence / 21 Oct 2013
There is all positivity in the global as well as domestic markets. While on global front US Fed stimulus continuance is one positive, the Chinese and Japanese markets are also providing encouraging macro data. On the domestic front the advancements on the spectrum sales front is likely to help the markets keep the up-ward momentum alive.
There seems to be all positivity in the markets. At least the way Asian markets trading today it seems so. After long time investors can see all the Asian markets trading in green. What adds to the confidence is that even US and European markets had closed in green in the preceding week. The simple reason behind the strength in global equity markets has been the speculation that the US Federal Reserve will delay stimulus cuts. Apart from that, better than expected earnings also helped the DOW to close in green.
While this was the story at US, even China has some positive news. China’s central government called for “unrelenting” implementation of its economic policies and reform measures to consolidate the nation’s recovery from a two- quarter slowdown and improve the quality of growth. In the past week there were certain other positive data points for China. National Bureau of Statistics said Chinese industrial production rose 10.2% last month following a 10.4% August increase. Economists expected a September gain of 10.1%. Chinese retail sales rose 13.3% in September after an August increase of 13.4%, but economists expected a September rise of 13.5%. Another report showed Chinese fixed asset investment was up 20.2% last month after rising 20.3% in August. Analysts expected a September increase of 20.3%. Even Japanese markets provided encouraging news flow as the Japanese exports rose 11.5 % in September from a year earlier, Ministry of Finance data showed on Monday, reflecting the effects of a weaker yen and a pick-up in global demand. As expected all the Asian markets are trading in green with Nikkei trading with almost 0.66% gains. Even Hang Seng is in Green with 0.60% gains.
While the global cues are positive there is good news on the domestic front also. First and the foremost has been, Current Account Deficit is likely to be lower than the projection of 3.8 per cent of the GDP in FY14 and India will be in a better position to neutralise the impact of the tapering of monetary stimulus by the US Fed, Planning Commission Deputy Chairman Montek Singh Ahluwalia has stated. While the other steps are being taken the spectrum sale is expected to help the Government. The reports suggested that the Finance Ministry is planning for fresh 3G sales to mop up Rs 73000 crore to curb fiscal deficit and CAD. So there is a good constructive news flow on the domestic front also. This is likely to help the Indian markets sustain the up-move. Even the SGX Nifty is trading at 6230 showing gains of around 25 points.
We expect the Indian markets to open in positive note and then sustain gains in the early hours of trade.
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