Looks Like A Flat Opening And An Even Flatter Trading Day Today

Trading on the last day of the calendar year can be pretty boring. In fact the last week of the year, spread across the holiday season in major markets witnesses thin trading volumes. This is particularly true of the Indian market, where FIIs are a dominant set of players. But as far as the markets open up for trading, there is bound to be some activity; more, less, heavy or thin being mere adjectives. The mood the sentiment and hence the direction of the market will remain the same as the influencing factors call for.

Right now, and actually almost throughout the year, one major driving factor for the markets has been the RBI and more so, its new Governor Dr Raghuram Rajan who assumed office some four months back. Dr Rajan’s proactive monetary policy management has helped the markets stabilize a lot in the face of uncertainty that had particularly gripped it in the second half of the calendar year.

From controlling the incessant slide of the Rupee to hiking interest rates in the face of ever rising inflationary pressures and from maintaining a status quo sniffing the commencement of the taper to raising fed flags in the Financial Stability Report released just yesterday, The RBI under Dr Rajan has come to be looked upon as a single point of action by the markets. It has been the RBI all the way. There is hardly any instance, in the recent times (unlike earlier) where the Finance Ministry has stepped in to either pacify the markets reeling under the pressures of a depreciating rupee or was seen worrying over deficits and inflationary pressures.

The focus now clearly shifts on policy makers. Even the Governor feels so. According to the report released by the RBI, the economic outlook has improved. But there are certain imperatives, if the traction had to be maintained. “It is imperative that long-delayed legislative reforms are pushed through, stalled infrastructure project clearances continue and fiscal consolidation remains on track in order to maintain the momentum”, these views of the Governor voiced in the report sum up all that is expected to be done as a new year dawns on us.

Meanwhile, global markets traded quite flat yesterday. The Dow managed a 26 point rise but surely did well on an end-to-end basis rising 26% through the year. The S&P 500 too has gained a good 29% in the year, while the technology laden Nasdaq has managed to end the year with a solid 38% rise. European markets too were doing little business and ended negative after a five day winning streak during the preceding week.

Asian markets are trading mixed with China, Malaysia and Taiwan trading in the red. The Shanghai Composite is trading on the brinks with a negative bias, while the KLSE Composite is down 0.30% so far in the day. The Taiwan Weighted is following the Chinese markets and trading down marginally as of now. Hong Kong and Singapore are holding on to their early gains and trading in the green as of now. the Hang Seng is up a quarter percent while the Straits Times too is trading up by a little more than a quarter percent.

Looks like a day of dull trade out there for the Indian markets too. With as good as no triggers for it, investors would well prefer waiting out till the market gets on with the New Year. 2014 is expected to be a big game changing year in the history of India. All eyes are set on the elections which are five months away. A more near term trigger for the markets will be the December quarter results which will begin coming in 10 days time from now. Meanwhile, here’s wishing all of you a Very Happy and Prosperous New Year ahead!