Asian Indices Witness Profit Booking- Indian Markest Unlikely To Be An Exception

Indian equity markets witnessed a strong up-move yesterday with all the leading indices moving northwards significantly. After witnessing a sort of sell-off in the preceding week on the last two trading Session of the week, everyone has expected the weakness to continue in the up-coming week. However, as we had stated, the Indian markets are dancing to the tune of news flow from the domestic as well as global markets. And similar Thing happened, as the nuclear deal between Iran, US, UK, Germany, France and Russia was announced on the week end. This has led to many geo political changes on the positive front. As Iran accepted to use the Uranium only for research purpose, many sanctions were released. The important one being relief on the insurance of vessels carrying Iranian crude. As a result the Oil scenario witnessed some easing, helping the Indian oil marketing companies to surge on the bourses. Even the banking stocks surged upwards.

While Indian markets witnessed a good up-move even other equity markets also closed in green with significant gains. Along with the Asian markets even the European markets closed in green with some gains. FTSE Closed up 0.30% and CAC 40 closed at 0.54%.

In US markets, the indices opened in green with significant gains. However profit booking took the indices southward. As a result the gains were marginal. While Dow closed up with 0.05%, S&P 500 closed marginally in red. Though the gain for Dow was marginal it closed at a record high.

Most Asian stocks declined, dragging the regional benchmark index lower for the first time in three days, after valuations climbed to near the highest level in six months. Apart from that Oil has witnessed an up-move first time in three days on speculation the U.S. will post a drop in inventories.

As for the Indian markets, the SGX Nifty is trading in red with a loss of 0.65%. It is trading at 6095 (Down 40 points). We expect a similar scenario for the Indian equities as well. Te journey has been sort of a roller coaster ride and has been news driven in the past few days. With positive impact of the US-Iran nuclear deal already priced in, there is no trigger or news for the Indian markets to witness any upsurge.

With the other Asian markets witnessing profit booking pressure, Indian equities are unlikely to be any exception. We expect the markets to open in red with marginal losses. However as we are heading towards the expiry, indices may witness some revival.