Profit Booking To Keep The Markets Under Check

When markets make an up-move it always provides an opportunity to the investors to book profit. And those who are able to take advantage of the same are called as smart investors. As keeping profits in books is not the ideal thing. The investments are of no use unless and until it comes to your pocket. In current scenario the smart investors are following the same principal. With Indian equity indices trading at yearly highs most of the smart players are booking profit. Profit booking was the prime reason behind markets taking a dip yesterday.

While Indian equities are already witnessing profit booking similar scenario is being witnessed in the global equity markets. If we take a look at the US markets, even the US markets witnessed good amount of profit booking taking the leading indices lower. While Dow Jones Industrial Average declined marginally by 0.35 %, the S&P and Nasdaq also closed in red with marginal losses. While profit booking was one reason mixed earning data on the September quarter results front added to the decline.

If we take a look at the European markets, here also profit booking was the prime reason to take the leading indices southwards. Apart from profit booking, the statement by European policy makers to allow the weak banks to fail the stress test was equally taken as a reason to take some profit off the table. FTSE, CAC 40 and DAX all equity indices closed with FTSE losing more than 0.80%.

As regards the Asian markets, most Asian stocks fell as the yen held near a two-week high versus the dollar before data on Chinese manufacturing and after disappointing earnings forecasts in the U.S., where chipmakers led stock declines. Crude oil snapped a three-day decline and copper climbed.

We expect the Indian markets to take a cue from the Asian peers and hence expect the markets to open on a weak note. However further move will depend on how the September quarter results pan out today. But it is likely that the profit booking will keep the markets under check.