A Flattish Open To The New Year

Welcome! Lets begin with wishing you all a very happy and prosperous New Year ahead. 2013 surely was a year filled with anxiety, as much as it was with volatility. With the benchmark indices hitting their all time highs, the markets were looking all set to cover their next leg up. Well, it has ended with a hope that 2014 will bring in the much needed stability in terms of everything. Good, stable and decisive governance, backed by a leader of mettle is what the nation, the economy and in turn the markets are looking forward to.  As they say, the world rests on hope, and, it is this hope that will keep the spirits of the markets high beginning today.

The world celebrates and ushers in the New Year today and markets across the globe are shut to ring it in. India probably stands out as an exception to the rule. Nevertheless, markets are expected to open on a rather flat note and trade on the basis of some of the macro data that come in yesterday. Core sector growth slowed to 1.7% in the month of November, though this definitely stands out to be much better than the contraction reported during the preceding month. The November macro data should have a damming effect on the markets today.  Exports reportedly grew at a much lower pace (in single digits) after a gap of almost four months. That should ring in some worrying bells on the opening day of the year.

However, for now, the markets are likely to feign ignorance of all worries like rising inflation, a burgeoning fiscal deficit and an unstable economic growth in expectation that the New Year will bring in all the cheer that has been elusive for almost a couple of years. The US is done with whatever little tapering it was to do, to start with, at least for now. The RBI will focus on interest rates as a tool to control inflation only if it sees inflation going out of hand, but that too is not likely to happen as all eyes are now fixated on inflation coming down as prices will cool off considerably.

Corporate results for the December quarter will now be the focal point. Nothing much will come out of them, but even a slight improvement over the preceding quarter will help lift the market sentiment. All said and done, the primary focus for the year will be the general elections in search of a stable and decisive leadership to take India up into the next orbit of growth.

As for today, you will see the markets open on a rather flat note and trade with a slightly negative bias. No use taking any big leaps today as trading is likely be rather wafer thin. Look forward to an improvement in sentiment as days progress into months. Lets keep it rather short and sweet for today as we begin an all New Year. Here’s wishing you all of you a very Happy and Prosperous New Year ahead!