Indian Market
As anticipated, the key Indian equity benchmarks have opened with a gap on the back of a firm trend across other Asian markets. Sentiment in Asia has been lifted by media reports that Greek political leaders will give a written undertaking on new budget cuts to international lenders on Wednesday to clinch new aid and avoid default next month. Repots also quoted Chinese central bank governor as saying that China will continue to invest in eurozone government debt.
As far as India is concerned, the good news is that inflation has cooled off in January, giving elbow room to the RBI to ease its hawkish monetary policy further and support growth. FII inflows have remained positive in February despite bad news from the overseas markets. Most of the liquidity gush has been supported by ultra-loose monetary policies in the developed nations.
The Indian market, the NSE Nifty has been sustaining above the support of 5350 for the past few sessions despite bad news from the overseas markets. A gap up opening in today’s trading session could confirm resumption of a fresh uptrend with immediate resistance seen at ~5580.
Global Market
The leaders of Greece’s two biggest political parties will provide written commitments to budget cuts, a government official in Athens was quoted as saying.
Asian stocks extended gains after China’s central bank governor Zhou Xiaochuan was quoted as saying that the country was ready to be more involved in resolving the long-running European debt crisis.
US stocks pared losses in the last half hour of trading on Tuesday amid signs that Greek leaders could soon seal the deal on fresh international rescue funds. US stocks had slumped earlier in the wake of disappointing retail sales data.
But, overall world equity markets are showing some signs of fatigue this month after a surprisingly strong January. Corporate results have been mixed in the backdrop of a slowing economy.
Concerns about the eurozone remain at the forefront after Moody’s downgraded six European nations and warned the UK on its ‘AAA’ grade. Greece continues to stumble in its attempts to secure more international aid before next month’s scheduled repayment.
Currencies
The Indian Rupee ended lower on Tuesday vis-a-vis the US Dollar as strong dollar demand from local oil companies offset a rise in the share market and some recovery in the euro. The rupee ended at 49.36/37 to the dollar, compared with Monday's close of 49.19/20.
Today’s Outlook
Today, the Indian Markets could open in the green and continue to trade in with a positive bias for the day. The immediate supports to watch are at 5350 and 5300 levels while the immediate resistance levels are at 5450 and 5500. Therefore, one must remain a bit cautious and wait for more signs of strength in the markets.
Sources- IIFL, hdfcsec
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