Local equity markets appear set for a positive opening today, mirroring strong overnight cues from the US and Europe.
Global equity markets rose on Thursday on hopes that a short-term fix to the US debt ceiling crisis was nigh. Janet Yellen’s nomination as the next Fed chief and receding chances of a Fed tapering any time soon following disappointing US jobs data also perked up investor sentiment.
While major US indices were trading 1.25-1.5% up, European indices were up nearly 1.5-2.0% as of 9 pm India time.
The SGX Nifty futures for October too were trading with gains of nearly 79 points, or 1.3%, after rising as much as 102 points to 6173 in intraday trades.
With the US shutdown now in its 10th day and the world’s largest economy just a week away from overshooting its debt-ceiling limit of $16.7 trillion, some hopes of short term solution to raise the debt ceiling emerged on Thursday.
“House Republican leaders will present their members with a proposal to raise the debt limit for six weeks without policy conditions,” Bloomberg reported, quoting a “congressional aide familiar with the details”.
According to the agency, President Barack Obama has said that he would accept a short-term increase in the debt limit without policy conditions and that he would negotiate on broader fiscal and healthcare policy after the debt limit is raised and the shutdown ends.
The jobs data in the US also came in much worse than expected, with jobless claims surging by 66,000 for the week ended October 5, the biggest rise in nearly a year, as the US shutdown led to 15,000 workers filling for jobless claims, a Labor Department spokesman said in Washington.
Experts see jobless claims staying elevated and growth taking a hit going forward, which could prompt the Fed to delay tapering further.
V K Sharma, head of private broking and wealth management, HDFC Securities, believes the chances of tapering have reduced and this, coupled with a resolution of the US debt ceiling crisis, would be positive for our markets.
Ambareesh Baliga, managing partner – global wealth management, Edelweiss Financial Services, feels Infosys’s guidance will drive the markets, more than anything else. “Though Infosys’s results are expected to be good, analysts are expecting the company to up its guidance from 6-10% given last quarter to 10-12%. If the management does give positive guidance, we may see a rub-off effect on other IT majors, like TCS and HCL, which have in recent times done better than Infosys. This, in turn, will lift markets up,” he said.