All Eyes On Yellen Speech

Indian markets yesterday witnessed a very range bound trading as the market lagged triggers. There was another reason behind the same. Today Jennet Yellen (Newly appointed US Fed chairman) will deliver her first view on the monetary policy. It is a known fact that the Indian markets along with its Asian peers are highly dependent on the FII inflow. And her view would provide a good amount of clarity on whether the flow would continue or would reduce going ahead. As a result there was no one who wanted to take a bold step ahead of her spec, ultimately keeping the global markets range bound.

Now the important factor is what to expect from her when she delivers her speech. She has always been considered as pro liquidity and hence one can expect the similar tone today also. Rather even the data on the unemployment front is suggesting that she may ease off the tightening monetary conditions. In the past Two monetary policies Ben Bernanke has cut the bond buying by USD 10 billion each time to take it to the USD 65 billion per month. We expect Yellen to put some breaks on the cut in bond buying and ease some liquidity position. However these are only expectations and the US Fed Chairperson always come out with something surprising every time.

As results even the US markets remained range bound and closed with some miniscule gains. While Dow Closed with gains of 7.71 points the S&P 500 closed with gains of 3 points. 

The story is similar with other Asian equity indices also Strait Times is up half a percentage point, Taiwan is up 0.40% and Shanghai Composite is up 0.14%. Hang Seng is the only index showing gains near To 1 %. 

While this is the story on the global Front, on the domestic front there are hardly any positive triggers. The results season has been quite dull and tepid and hence is unlikely to provide any support to the markets today. However one can expect a stock specific movement. Tata Motors has posted strong results for the December quarter. The results were announced after the market hours and hence one can expect some movement in the stock. 

As for the markets, we expect another cautious opening for the markets with positive bias. The SGX Nifty is trading at 6074 (Up 12 points). Hence expect a flat opening and then a range bound trade in the early hours of trade.