DSIJ Mindshare

Markets Likely To Keep Momentum Alive

Global environment seems to have turned very conducive for the equity markets. At least the way indices are moving northwards it seems so. Around a fortnight back the scenario was such that Geopolitical tensions were keeping the investors on toes. However the tensions have already receded and with positive macro data most of the equity indices are moving ahead. Along with other global equities Indian equities also witnessed a strong up move. After some amount of consolidation in two trading session, yesterday markets again closed in green. Markets ended marginally higher led by gains in bank shares after Finance Minister said that the Indian government was working towards bringing in more professionalism in the functioning of banks and improving risk management, amid the backdrop of the recent scams in some public sector banks.

Further, steel shares came under pressure after the government hiked royalty on iron and bauxite. The 30-share Sensex ended higher by 46 points at 26,360 and the 50-share Nifty gained 16 points at 7891. The broader markets outperformed the benchmark indices- BSE Midcap and Smallcap indices gained between 0.3-0.5 percent.

Now going ahead also there are few positive for the Indian economy. The Reserve Bank of India (RBI) has said that the Indian economic growth is poised for a take-off amid signs of economic reforms, fiscal consolidation and projected improvement in investments. The central bank forecasts the gross domestic product (GDP) to grow around 5.5% in 2014-15 after two painful years of sub-5% growth, its annual report stated.

On the global canvas, US stocks ended higher yesterday, with the S&P 500 at a record after a flurry of positive economic data, as investors hoped for signs from an annual meeting of central bankers that interest-rate hikes are not imminent. The S&P 500 broke two records during yesterday's session, climbing past its previous intraday all-time high of 1991.39 and ending above its previous record close of 1987.98. Both had been set on July 24. Investors are anticipating that the benchmark index will touch the 2,000 level, which it has yet to breach. Market participants refrained from making big bets before Federal Reserve Chair Janet Yellen's speech on Friday at a policymakers' meeting in Jackson Hole, Wyoming, which could provide clues on the timing of an interest-rate hike. The Dow Jones industrial average rose 60.36 points or 0.36 % to 17,039.49. The S&P 500 gained 5.86 points, or 0.29 %, to end at 1992.37. The Nasdaq Composite added 5.62 points or 0.12 percent to 4532.10.

Asian stocks are also trading with gains after reports from US housing to manufacturing showed the world’s largest economy is strengthening. The Japan’s Nikkei headed for a 10th day of gains, the longest winning streak in 26 years. Nikkei is trading in green with gains of 0.13% and Hang Seng is up 0.27%. Shanghai Composite is also trading on positive note with gains of 0.24%. SGX Nifty is Also showing positive trends with gains of 0.10%. We are of the opinion that Indian equities are likely to open on a positive note and then further move northwards in early hours of trading.

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