Market May Open Marginally Higher

A benchmark index of Indian equities markets reversed gains to end lower as investors booked profits after three consecutive days of gains. The Sensex closed 195.33 points (0.71%) lower at 27,506.46, while Nifty fell 57 points (0.68%) to end at 8,267. The Sensex had rallied by 991.66 points in the past three sessions on the back of positive domestic and global cues. Among the BSE sectoral indices, metal index was the top loser, down 1.89%, followed by the capital goods index that shed 1.46%. Smallcap index fell 0.64% and Mid-cap index ended 0.33% lower.

Globally, the US stock markets rose for a fifth straight session Tuesday and the Dow Jones has broken through the 18,000 barrier for the first time ever on the back of an unexpectedly strong report on economic growth in more than a decade. Over the past five trading sessions, US market has looked like a classic Santa Claus rally and up more than 5% since last Tuesday’s close. Third quarter US GDP expanded higher by 5% yoy well ahead of the 3.9% previously estimated. Lower oil prices and rising employment spurred US consumers to head to the shops as household spending increased by 3.2%.

The Dow Jones Industrial Average added 64.73 points (0.36%) to 18,024.17, closing at a record level for the 36th time in 2014. The S&P 500 index added 3.63 points (0.2%) to 2082.17, notching its 51st closing high of 2014. Meanwhile, the Nasdaq Composite fell 16 points (0.3%) to 4765.42, dragged down by broad declines in health-care stocks. The stock market will close early on Wednesday and will be closed Thursday for Christmas.

Europe market extended rally and the Stoxx Europe 600 index ended up 0.61% at 344.06, reflecting steady gains across most of Europe’s main stock markets. Britain's FTSE 100 index was up 0.3%, Germany's DAX index up 0.1% and France's CAC 40 up 0.3%.

Asian markets open in positive except Shanghai Composite Index. Japan’s Topix index rose for a fourth day following a public holiday after the yen fell and the U.S. reported the fastest economic growth in 11 years. The Topix added 0.9% to 1,425.40 and the Nikkei 225 Stock Average gained 1.1% to 17,834.86. China’s stocks fell, extending the benchmark index’s biggest loss in two weeks, amid speculation the government is taking steps on bubble risk. The Shanghai Composite Index down 1.86% to 2,976.

The SGX Nifty is open at flat. Today we expect Indian market may open marginally higher; however participants should keep careful ahead of the monthly expiry of F&O today and following closure of markets on Thursday for “Christmas”.