Though there is every reason for the Indian markets to follow its peers, the F&O expiry will keep optimism under a check. There is a possibility of the markets opening slightly in the positive and trade cautiously at least for the first half of the day. You could see some strong buying towards the second half pushing up the markets to close strongly today.
The focus on political stability and a change of guard at the centre is getting sharper. After Goldman Sachs it was the turn of Nomura to suggest that it saw a BJP led coalition coming to power in May 2014. Though the political analyst at the brokerage did turn back from going explicitly in favour of a Modi-led government by saying that a stable government with a good clarity of thought was essential, the actual import of what he meant becomes absolutely clear. The ruling UPA may go berserk at such open allegiance that foreign institutions are owing to the BJP and Modi but the reality about the increasing popularity of the party and its candidate cannot be shrugged aside just like that.
Once again it brings us to the same philosophy we have been banding about for quite some time now. There is no point in running behind mirages. It can only sap your energy and result in a loss of wealth if it involves an investment decision. There is nothing as uncertain as Political outcomes, not even market movement. One cannot really depend on the political judgement of these foreigners. Moreover, it is only a few and intelligent retail investors who are currently investing in the market.
A bulk of the investment is that of the Foreign Institutional Investors. So for the time being it would make sense in assuming that, they either know something insidious about the impending elections or are plainly using their big talk as a tool to prop up the market. After all, anything that these big boys say is considered to be Holy Grail. The Indian market would have certainly reacted to this bit in today’s trading had it not been for the expiry day.
Coming to what global markets did yesterday; Europe saw some good trading following upbeat economic data. Positive consumer confidence in Germany and better than expected economic reports from the US helped the European markets up. US markets too moved higher with the S&P 500 and the Dow Jones Industrial Average closing at record highs. A better than expected consumer sentiment, employment and Chicago area business conditions propped up stocks yesterday.
Asian markets are seen riding the US optimism today with most of them trading firmly in the green. The Japanese Nikkei was seen trading more than a percent up from its previous close followed closely by the Shanghai Composite which was up by almost 0.82%. Hopes of reforms have been keeping the Chinese market up for almost a fortnight now. Taiwan, Korea and Singapore too are trading firmly this morning. The Taiwan Weighted and the Straits Times had gained nearly half a percent while Seoul Composite was trading even more strongly (up 0.2%). The Hang Seng is trading up by more than half a percent while the Jakarta Composite of Indonesia is also fairly in the green. The SGX Nifty is seen trading very firmly this morning. It was up 33 points.
Though there is every reason for the Indian markets to follow its peers, the F&O expiry will keep optimism under a check. There is a possibility of the markets opening slightly in the positive and trade cautiously at least for the first half of the day. You could see some strong buying towards the second half pushing up the markets to close strongly today.
