The Day After...look for a way
When faced with a challenge, look for a way, not a way out.
It's a little to look for a way out. If you do so you may return at peak to make the same mistakes. So hang around and let the dust settle. If you thought short covering will save the day today, we have to contend with a weak global sentiment, especially in Asia. Key Markets in Tokyo, Hang Seng and Shanghai are down this morning. Oil is hovering above $61 per barrel mark. There is some relief in terms of gains in US and Latin American indices. However, that's hardly any solace when one considers the uphill task that the bulls face after the ferocious February. FIIs were heavy sellers in the cash segment yesterday. Cues from the F&O segment are also not encouraging.
All in all, we are looking at another day with the usual intra-day gyrations. There may be some short-covering led bounce back but again don't get fooled. Remain alert as we have the sun outage later next week which sets in boredom to say the least.
Concerns about inflation and rising interest rates continue for a while before we see any improvement on this front. The much dreaded hike in STT didn't come about nor did the rumoured come back of Long-Term Capital Gains tax. Still, the budget doesn't have much to lift the market from its current levels. If anything, the FM has sprung some nasty surprises for IT, Cement, Construction, Retail and a few other sectors. The upping of dividend distribution tax coupled with the increase in education cess are among the other negatives from the budget.
Aftek and ESG of Germany will together announce a joint venture later in the day. Salzer Electronics board is meeting to consider and approve the proposal of private placement. Karuturi Networks is expected to consider bonus shares in the ration of 1:1. Esab will declare its results today.
US stocks recovered on Wednesday from the previous day's massacre, helped by comments from Federal Reserve Chairman Ben Bernanke.
Trading was volatile. Stocks rose after the opening bell and then reversed course, only to turn higher when Bernanke commented on the market in his appearance on Capitol Hill. He told members of Congress that US financial markets appear to be working well and are functioning normally, one day after the Dow posted its biggest one-day point loss since the market reopened after the Sept. 11 attacks.
The Dow Jones rose 52.39 or 0.4% to 12,268.63, but finished off its session high. The broader S&P 500 index added 7.78 or 0.6% to 1,406.82 and the Nasdaq Composite index advanced 8.29 or 0.3% to 2,416.15.
US light crude oil for April delivery rose 33 cents to settle at $61.79 a barrel on the New York Mercantile Exchange. The front-month contract was 20 cents higher at $61.59 a barrel in extended trading in Asia.
Treasury prices, which soared Tuesday as equities plunged, retreated. The yield on the benchmark 10-year note rose to 4.56%, up from 4.51% late on Tuesday. The dollar rebounded against the euro and the yen.
Gold futures closed with a loss of nearly $15 an ounce. Gold futures for April delivery dropped as much as $23.20 during Wednesday's session to a more than two-week low of $664 an ounce in New York. It closed at a one-week low of $672.50, down 2.1%, or $14.70.
European shares saw their second day of sharp selling. The German DAX Xetra 30 closed down 1.5% at 6,715.44, the UK's FTSE 100 declined 1.8% to 6,171.50 and the French CAC-40 slipped 1.3% to 5,516.32.
Latin American markets finished higher. Brazil's Bovespa index rose 747 points, or 1.7%, to 43,892.31. Mexico's IPC gained 220 points, or 0.8%, to 26,638.95; and Chile's IPSA surged 3%. But Argentina and Venezuela extended losses.
China's stocks dropped on Thursday amid worries about valuations after the rally to record high last week. Industrial & Commercial Bank of China and Bank of China led the decline.
The Shanghai and Shenzhen 300 Index, which tracks yuan- denominated A shares listed on China's two exchanges, declined 17.14, or 0.7 percent, to 2527.43 as of 11:05 a.m. local time. The measure added 3.5 percent yesterday, after plunging 9.2 percent two days ago. It has climbed 24 percent this year.
The Shanghai Composite Index, which tracks the bigger of China's stock exchanges, dropped 1.4 percent to 2840.39. The Shenzhen Composite Index, which covers the smaller one, lost 0.2 percent to 735.13.
The Morgan Stanley Capital International Asia-Pacific Index fell 0.7% to 143.20 at 11:46 a.m. in Tokyo. It slumped 3% yesterday, the most since June 13, after a Feb. 27 plunge in Chinese shares triggered a worldwide selloff.
Japan's Nikkei 225 Stock Average dropped 215 points to 17,388, while the Topix Index slipped 0.8%. Indexes gained in Singapore, the Philippines and New Zealand. Others markets fell, including in Taiwan, which was closed yesterday for a holiday. South Korea is shut today.