Cues: Is market finally ready for run up to Budget?

Moneycontrol Bureau

On Tuesday, the Sensex closed 134 points above at 19635.72, where it posted its biggest gains of the month, as investors purchased software service exporters and defensive shares. After yesterday's rally it is expected that domestic participation is again kicking in. With days nearing the Budget, is the market finally ready for a run up? 

On the other hand, a move that could give economy a jolt, 11 trade unions across the country have called for a two-day nationwide 'Bharat Bandh', in protest against the Centre's economic and labour policies. Services like banking, transportation excluding railways and public services are expected to take a hit due to the Bandh.

Industry body Assocham estimates that the economy would take a hit to the tune of Rs 15,000- Rs 20,000 crore due to the protest. Companies like Nestle India, Abbott India & Rain Commodities will announce December quarter earnings quarterly later in the day.

On the global front, cues from the overseas market are supportive, where almost all the markets closed on the positive note. A key factor to watch today is how much support will the international market lend to the local market?

Asian markets were trading higher. China's Shanghai Composite was flat at 2,382.05. Hong Kong's Hang Seng rose 0.35% or 80.26 points at 23,224.17. Japan's Nikkei gained 1.04% or 118.33 points at 11,490.67.

The US markets finished modestly higher across the board with the Dow and S&P 500 closing at their best levels since October 2007, lifted by optimism for more M&A deals and after positive economic data from Europe. The CBOE volatility index slid near 12.

European shares rallied with stronger than expected German sentiment data prompting investors to return to economically sensitive sectors like autos and technology after a three session losing streak.

In the currency space, the euro rises to 1.34 to the dollar helped by upbeat data on German economic sentiment. The dollar index slips below 80.50 levels and the yen rises versus the dollar.

In commodities, the risk on sentiment has pushed crude prices higher. Brent crude recovered from lows of USD 116.50/bbl to trade above USD 117.

In the precious metals space, gold slips slightly but holds above the USD 1600 levels.

shadab.khan@network18online.com