Pre Market Commentary ...

Global markets have heaved a sigh of relief. European leaders have buried the hatchet to avert a possible split in the euro-zone and bolster confidence in the euro. Another major financial crisis has been avoided. But, it remains to be seen how fast the debt-ridden European nations can rebound from here on. A major task ahead of them is to overhaul their economic structures to return to sustainable growth while also keeping in check their high debt levels.

The global economic recovery has suffered a temporary setback. What that means is that the crisis-fighting stimulus will stay for some time to come in advanced nations. Even central banks in emerging countries like India may go slow in raising rates. The dollar may remain firm. Emerging markets with strong growth will benefit from ultra-soft monetary regime in western countries.

For the day, the outlook remains positive though the start will be lackluster. Asian markets are mixed. Stocks in China are up this morning, owing to strong set of economic data released today. The Hang Seng is in the red. Some choppiness is likely and the main Indian indices may once again slip into a rangebound trade. We would urge caution at these levels.