Indian equity market will witness high degree of volatility on this last trading week of the year. Under all likelihood, Indian equity markets will remain choppy this week as much will depend on what measures the Barrack Obama-led government will take to steer the US economy away from the metaphorical "fiscal cliff." Also expiry of December contracts will see the market oscillate between optimism and pessimism. The holiday-truncated week ahead will see low volumes as serious investors would come back in the New Year.
Obama administration’s failure to gain the confidence of Republicans, who refused to accept the blueprint charted to avert the 'fiscal cliff' threat raises serious concerns that politicians in Washington are likely to fall short of an agreement to deal with $600 billion in tax hikes and spending cuts due to kick in early next year. Obama, on Friday, urged lawmakers to reach an agreement on preventing tax hikes on the middle class, saying he was ready and willing to do what it takes to get a deal by January 1. The president said he was an optimist and believed a deal could be hammered out.
Republican House Speaker John Boehner failed to garner enough votes from even his own party to pass his "Plan B" tax bill late on Thursday which called for tax increases on those who earn $1 million or more a year. . But it exposed the reality that it will be difficult to get Republican support for the more expansive tax increases that President Barrack Obama has urged.
The White House on Friday tried to rescue stalled talks but there was little headway as lawmakers and President Barrack Obama abandoned Washington for Christmas. Many economists forecast that this "fiscal cliff" will push the economy into recession.
The Dow Jones industrial average (DJI) dropped 120.88 points or 0.91 percent on Friday, to close at 13190.84. The Standard & Poor's 500 Index (SPX) fell 13.54 points, or 0.94 percent, to close at 1430.15 for the week. The Nasdaq Composite Index (IXIC) lost 29.38 points, or 0.96 percent, to close at 3021.01. However, for the week, the Dow gained 0.4 percent and the NASDAQ climbed 1.7 percent.
Asian shares have started today’s trading on a cautious note, keeping an eye on whether the United States can avoid a fiscal crisis. MSCI's broadest index of Asia-Pacific shares outside Japan, MIAPJ0000PUS was up 0.6 percent after falling to a near two-week low on Friday. Australian shares (AXJO) rose 0.4 percent early on Monday, but trade was extremely thin. South Korean shares opened up 0.2 percent. Japanese financial markets are closed for a public holiday and will resume trading on Tuesday.
Indian market appears to have a strong core now. Equity researchers are bullish on domestic equities in the short-term, with many asking investors to accumulate quality stocks at minor price corrections. If the Obama government manages to hammer out a solution which will see the US economy being able to avert the fiscal cliff crisis, it will be a huge positive for both Indian and global markets.
The Sensex is just 370 points off from its 52-week-high of 19612. Technical analysts see strong resistance and support for Sensex at 19450 and 19090 levels, respectively. Technically, the Nifty faces multiple resistance at 5950/70 levels, which has been tested thrice but failed to be crossed. Support comes at 5820/30 level. However, in the week ahead, the index could break out from this range on either side.
Investors will keenly watch third quarter results which will start coming in from mid-January. Equity analysts expect strong earnings from healthcare, auto four-wheelers and technology sectors. However, engineering and manufacturing companies may continue to see margin pressure in the third quarter as well.
Overseas investors have pumped in $3.4 billion in the Indian stock market so far this month, taking the total inflow for 2012 to a staggering $23 billion. During December 3-21, foreign institutional investors (FIIs) were gross buyers of shares worth Rs. 57,024 crore and sellers of equities worth Rs. 38,644 crore - translating into a net inflow of Rs. 18,380 crore ($3.4 billion), according to Sebi data. This takes the net investment by FIIs to $23.15 billion (Rs. 1, 21,652 crore) so far in 2012, making it the highest-ever inflow during the last two years and the second-highest in any calendar year, since their entry into Indian capital markets in 1992. In 2010, overseas investors had made net investments of about $29 billion.
Market experts believe the recent reforms initiatives undertaken by the government to boost economic growth and investor sentiment have seen renewed interest by foreign investors and Indian market has attracted the highest amount of foreign flows compared with other Asian peers so far.
Thus, it can well be predicted that Indian equity market will start the day on a cautious note. Volumes will be low. Indications of any positive news from US regarding fiscal cliff crisis may move the Sensex higher.
Republican House Speaker John Boehner failed to garner enough votes from even his own party to pass his "Plan B" tax bill late on Thursday which called for tax increases on those who earn $1 million or more a year. . But it exposed the reality that it will be difficult to get Republican support for the more expansive tax increases that President Barrack Obama has urged.
The White House on Friday tried to rescue stalled talks but there was little headway as lawmakers and President Barrack Obama abandoned Washington for Christmas. Many economists forecast that this "fiscal cliff" will push the economy into recession.
The Dow Jones industrial average (DJI) dropped 120.88 points or 0.91 percent on Friday, to close at 13190.84. The Standard & Poor's 500 Index (SPX) fell 13.54 points, or 0.94 percent, to close at 1430.15 for the week. The Nasdaq Composite Index (IXIC) lost 29.38 points, or 0.96 percent, to close at 3021.01. However, for the week, the Dow gained 0.4 percent and the NASDAQ climbed 1.7 percent.
Asian shares have started today’s trading on a cautious note, keeping an eye on whether the United States can avoid a fiscal crisis. MSCI's broadest index of Asia-Pacific shares outside Japan, MIAPJ0000PUS was up 0.6 percent after falling to a near two-week low on Friday. Australian shares (AXJO) rose 0.4 percent early on Monday, but trade was extremely thin. South Korean shares opened up 0.2 percent. Japanese financial markets are closed for a public holiday and will resume trading on Tuesday.
Indian market appears to have a strong core now. Equity researchers are bullish on domestic equities in the short-term, with many asking investors to accumulate quality stocks at minor price corrections. If the Obama government manages to hammer out a solution which will see the US economy being able to avert the fiscal cliff crisis, it will be a huge positive for both Indian and global markets.
The Sensex is just 370 points off from its 52-week-high of 19612. Technical analysts see strong resistance and support for Sensex at 19450 and 19090 levels, respectively. Technically, the Nifty faces multiple resistance at 5950/70 levels, which has been tested thrice but failed to be crossed. Support comes at 5820/30 level. However, in the week ahead, the index could break out from this range on either side.
Investors will keenly watch third quarter results which will start coming in from mid-January. Equity analysts expect strong earnings from healthcare, auto four-wheelers and technology sectors. However, engineering and manufacturing companies may continue to see margin pressure in the third quarter as well.
Overseas investors have pumped in $3.4 billion in the Indian stock market so far this month, taking the total inflow for 2012 to a staggering $23 billion. During December 3-21, foreign institutional investors (FIIs) were gross buyers of shares worth Rs. 57,024 crore and sellers of equities worth Rs. 38,644 crore - translating into a net inflow of Rs. 18,380 crore ($3.4 billion), according to Sebi data. This takes the net investment by FIIs to $23.15 billion (Rs. 1, 21,652 crore) so far in 2012, making it the highest-ever inflow during the last two years and the second-highest in any calendar year, since their entry into Indian capital markets in 1992. In 2010, overseas investors had made net investments of about $29 billion.
Market experts believe the recent reforms initiatives undertaken by the government to boost economic growth and investor sentiment have seen renewed interest by foreign investors and Indian market has attracted the highest amount of foreign flows compared with other Asian peers so far.
Thus, it can well be predicted that Indian equity market will start the day on a cautious note. Volumes will be low. Indications of any positive news from US regarding fiscal cliff crisis may move the Sensex higher.
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