Morning Cues: Will the mkt continue its rally from Friday?

The US markets closed out the week in positive territory with the S&P 500 extending gains to a new high. The Wall Street cheered some better-than-expected corporate earnings. Google soared nearly 14 percent to top USD 1000 a share for the first time, after the search-engine giant posted better-than-expected earnings.

All three major averages logged strong gains for the week, with the S&P 500 and NASDAQ posting their best weekly rally in three months. The CBOE volatility index closed near 13 - its lowest level in 2 months. European equities staged a broad-based rally to close higher on Friday at a five-year high, as investor confidence was buoyed by Chinese growth data and expectations that the US Federal Reserve will keep monetary stimulus unchanged for months. In Asia, Japan posted a record 15th straight monthly trade deficit in September as growth in exports slowed. Last month exports rose 11.5 percent from a year earlier slipping from a 14.7 percent gain in August and missing a forecast of 16.1 percent. Eyes will be on Chinese manufacturing data on Thursday, Japanese inflation numbers on Friday, and GDP for South Korea. In the currency space, the dollar fell to eight-and-a-half-month lows on expectations the Fed may delay scaling back its monetary stimulus following this month's political battles over the budget. The euro-dollar rose to levels to 1.36 – its highest levels since February and close to its 2013 peak of 1.371 In commodities, oil prices edge higher on strong, Q3 growth data from China, and a weakness in the US dollar which tends to push up commodities prices, with Brent at USD 110/bbl and Nymex at USD 101/bbl From precious metals space, gold traded near USD 1,315/oz after slipping on Friday on expectations that the partial US shutdown will lead the Fed to postpone tapering of its stimulus programme. Back home, the market surged to a three-year high on the back of strong earnings from the technology sector and foreign liquidity. The Sensex rose by 354 points to close at 20,882.89, while the Nifty gained 93 points to close at 6189.35. On the earnings front, Asian Paints will be announcing its result today. Its profit after tax is expected to increase by 9.3 percent, according to a CNBC-TV18 poll.