Indian Markets Update

The Indian markets are between two risk events. One on the domestic front while the other is a global event. Yes, I am talking about the result of Bihar election and another is the US nonfarm payroll report which is due today evening. The NSE benchmark NIFTY index look very confused today and oscillated between negative and positive territories.  The index however closed with minor loss.

The NFP data due from the US today could be a massive figure. Payrolls are expected to come in at 180,000 which would be an improvement on 142,000 last month and the unemployment rate is expected to fall to 5%, from 5.1% in September. The US rates market is expecting a strong data set or at least within the consensus range. Perhaps the larger surprise for the market lies towards the data coming in marginally below expectations rather than marginally above expectations. However, strong reading may raise possibility of a rate hike in December and most traders are expecting the same as of now. This would have a significant knock-on impact across the financial world, with implications for not only the US dollar and Treasuries, but other factors further afield such as Emerging Markets currencies and also stock markets around the world.

On the domestic front, experts are on the opinion that the market has already factored in Bihar election result while the exit polls have not sent any clear message till now. Traders believe that a victory of NDA in Bihar election should strengthen the hands of the central government to carry out much needed reforms while a negative result may delay them. There may be a correction indeed while a major sell-off may not be a case. A not so great corporate earnings is also responsible for sluggish domestic market.

For time being, it is better to stay away from markets and enjoy this weekend.