New Delhi: The markets opened on quiet note today in line with its Asian peers. Cement, banks and capital good stocks were trading up. At 9:56 hours, Sensex was up 36 points at 15,640 and Nifty was up 10 points at 4,527. Major gainers in the opening trade were ACC, SAIL, L&T, ONGC, SBI, Rel Energy, Maruti, HUL. However, Tata Motors, Rel Comm were little subdued.
Market cues:
- FIIs net sell USD 11.4 mn in equity on Sep 13
- MFs net buy Rs 80 crore in equity on Sep 13
- NSE F&O Open Interest down by Rs 440 crore (Rs 4.40 billion) at Rs 83,948 crore (Rs 839.48 billion)
Anand Tandon of Gryffon Investment Advisors said the market should be more concerned on IIP (Index of Industrial Production) numbers that have downgraded. “If there is a slowdown in the Indian economy, it will have a prominent effect on the markets,” he added.
Tandon feels the Fed will clearly not raise rates on September 18. Whether it leaves rates unchanged or cuts rates will not have a major effect on the markets here, he said. “It will have a positive to neutral effect on markets here.”
“Whether Fed does raises the rates, or drops it, the opinion is divided right now on this matter. It seems to be more in favour of the fact that the Fed will cut the rates. Either which way, in the Indian market the effect may not be negative. If at all there would be an impact it could be positive or neutral. So in terms of where the market will go because of the Fed I think it will not go anywhere because of anything that Fed will do,” said Tandon.
He added, “the interest rates globally look like they will be headed down, which if translated into the local market and to some extent that is possible again because finally deposit rates have caught up with credit growth, could overall mean that you could see a bit of interest rate softening here as well.”
The slowdown that we are seeing now is in affect of what RBI did six months ago. “I think you are now going to get into slightly lower earnings stock market expectations from hereon. Not necessarily the kind of 40% growth YoY that we have seen over the last three years but perhaps more in the region of 18%-20%.”
Commenting on the impact of country’s political tribulations on the markets Tandons said, “I think it will gradually become bigger but right now I do not think so many people are focused on it. Whether or not that will affect the longer-term trend I do not think so but in the near-term certainly it will play a bigger role as it becomes a little unclear about whether or not there is a near-term election likely.”
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