Monday’s Market Preview: Flat-to-positive start indicated

The Indian market is likely to open on a flat-to-positive note, in sync with its Asian peers which are mostly in the green in early trade this morning. However, Wall Street witnessed a flat ending on Friday ahead of the mid-term elections and the Federal Reserve’s “quantitative easing” announcement later this week. The SGX Nifty is up 45 points at 6,085 against its previous close of 6,040 on Friday.

The domestic market is likely to encounter a bit of choppiness in the holiday-shortened week as the Reserve Bank of India (RBI) is set to announce its quarterly policy review tomorrow. While some experts believe that the central bank might go in for a marginal hike in key rates, others opine that the RBI will maintain a status quo on account of rising prices.

Cautiousness ahead of the RBI quarterly monetary review and the outcome of the US Federal Open Market Committee (FOMC) meeting, weighed on investors worldwide. The Indian market, being no exception to the global nervousness, witnessed a high degree of choppiness throughout the week. The market ended with a loss of 1% for the week ended 29th October with the Sensex losing 133.52 points and the Nifty shedding 48.35 points. On a monthly basis, the market tumbled 2% in October with the Sensex declining 412.70 points and the Nifty falling by 125.70 points.

The US markets ended flat with a mixed bias on Friday as investors awaited the outcome of the US mid-term polls and the FOMC meet. Meanwhile, the Commerce Department reported Friday that the economy expanded at a 2% annual rate in the July-September quarter. The 2% rise marked an improvement from the feeble 1.7% growth in the June quarter.

The Dow added by 4.54 points (0.04%) to 11,118. The S&P 500 fell by 0.52 points (0.04%) to 1,183. The Nasdaq was a tad higher by 0.004 points to 2,507.

Markets in Asia were trading with smart gains this morning on upbeat Chinese manufacturing data brushing aside fears about the outcome of the Bank of Japan and the US central bank’s meeting, scheduled this week. The Chinese Purchasing Managers’ Index rose to 54.7, the Federation of Logistics and Purchasing said. The reading was higher than 53.8 for the previous month and in line with analysts’ forecast.

The Shanghai Composite was up 0.99%, the Hang Seng gained 1.65%, the KLSE Composite rose 0.11%, the Straits Times advanced 1.61%, the Seoul Composite was up 1% and the Taiwan Weighted gained 1.29%. On the other hand, the Nikkei 225 was down 0.18% on earnings concerns and a stronger yen. The SGX Nifty is up 45 points at 6,085 against its previous close of 6,040 on Friday.

The RBI should intervene to arrest the sharp appreciation of rupee, which is hurting the country's exports sector, the Associated Chambers of Commerce and Industry (Assocham) has said.

The sharp appreciation of rupee against other currencies is impacting the exports industry, the chamber said. The rupee is now ruling at above Rs44 against dollar, it added.

However, commerce and industry minister Anand Sharma had recently said, “We do not see that we have reached that stage, where the rupee can be termed as volatile.”

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