Market Likely To Consolidate This Week
Indian equities rising for the sixth day in a row, the Sensex closed the week that ended on 2nd January at 27,888 (up 646 points or 2.37%), while the Nifty ended at 8,395 (up 195 points or 2.37%). During the first four trading sessions of the week, markets were largely range bound with the Sensex and the Nifty moving by less than one percent. On Friday, the Sensex surged 380.36 points to end at over three-week high of 27,887.9 on encouraging manufacturing data and gains in banking stocks on hopes of sectoral reforms.
The BSE Midcap and the BSE Small-cap indices also jumped by 4.10% and 3.79% and did better than the Sensex. The significant improvement in HSBC Manufacturing Purchasing Managers' Index (PMI), which rose to 54.5 in December, highest since end-2012, provided the initial push.
Globally, the US stock markets were closed in negative in a shortened week, which included limited activity due to holiday market closes. The Dow Jones Industrial Average added 9.92 points (0.1%), to 17832.99. For the week, it fell 1.26%. The S&P 500 index lost 0.70 point to 2058.20 and declined 1.49% for the week. The Nasdaq Composite Index fell 9.24 points (0.2%), to 4726.81. For the week, it lost 1.7%.
In US economic data, the ISM manufacturing index eased from 58.7 to 55.5 in December, well below the consensus estimate of 57.6. Construction spending fell by 0.3% in November, below forecasts for a 0.3% gain. The ISM Services PMI data for December will be unveiled on Tuesday, 6 January 2015. US nonfarm payrolls for December will be announced on Friday, 9 January 2015. US unemployment rate for December 2014 will be announced on Friday, 9 January 2015.
European stock markets and the euro started 2015 badly on Friday, with the single currency sinking to four-year lows in response to fears of deflation. London's benchmark FTSE 100 index lost 0.28% to 6,547.80 points. The German DAX 30 declined 0.42% to 9,764.73 points and the CAC 40 in Paris slumped 0.48% to 4,252.29 points. But Italian, Spanish & Greek markets rose on hopes for stimulus from the European Central Bank.
Asian markets are open with mixed trend. Tokyo's Nikkei 225 fell 0.71%, while South Korea's Kospi lost 0.93%. Hong Kong's Hang Seng Index is set to drop 0.41%. The Shanghai Composite Index currently trading up by 0.80%. A final reading for Japan's manufacturing sector should confirm a seventh month of growth. Japan Manufacturing PMI was 52.0 in December, slightly less than a preliminary reading of 52.1 and unchanged from the final reading in November.
SGX Nifty is trading in red with 28 points lower to 8,438. Today, we expect a lower opening for Indian Equities.