Sun outage to end…Bulls hope for sunshine
Keep your face to the sunshine and you cannot see the shadow.
A Happy New year. Gudhi Padwa heralds the advent of a prosperous new year and is considered as one of the most auspicious days by Hindus. The bulls will hope that the 'Muhurat'. Today, which is the first day, "shuddha pratipada", of the month of Chaitra will bring in sunshine after five weeks of darkness.
The Asian market cues promise a better open. However, a good start cannot always guarantee a good close. On the brighter side, the sun outage, which is usually a weak lackluster time for the markets ends today.
Be on the guard for some cooling as the undertone still remains jittery. Investors should refrain from taking too many bets immediately. If one cannot resist the temptation, stick to only large caps (A group), and avoid small- and mid-caps for a while. Volume has dived, turning the market fairly choppy. This trend may continue as next week we'll have the F&O expiry.
In a major development, the People's Bank of China has raised interest rates to check heavy inflow of foreign investment and slow down the world's fourth-largest economy. Next month, we will have the annual policy meeting of the Reserve Bank of India (RBI), and going by the latest data on inflation, industrial production, money supply and credit growth, the central bank may be forced to take more monetary tightening step(s). Some reports suggest that inflation may remain high for long, if supply side constraints are not eliminated soon. That may prove to be a dampener for earnings growth and the stock market.
Global factors have taken center stage nowadays. The domestic story remains intact but we cannot isolate ourselves too much from the global market. The trend is unlikely to change for a while. This week we'll have policy decisions from Bank of Japan (on Tuesday) and from the Federal Reserve (on Wednesday). As a result, the markets across the world will be keenly awaiting the outcomes from the two key events. We expect both the central banks to keep interest rates unchanged. That may give some relief to global equity markets that have been in the doldrums over the past few weeks.
FIIs were net sellers to the tune of Rs2.02bn (provisional) in the cash segment. In the F&O segment, they offloaded stocks worth Rs3.79bn. On Thursday, foreign funds were net buyers of Rs185mn in the cash segment. Mutual Funds pulled out Rs2.06bn on the same day.
AMD Metplast, Jagjanani Textiles, Lawreshwar Polymers and Abhishek Mills will make their stock market debut today. Expect these shares to be under pressure going by the recent trend on new listings.
RSWM's Board will meet on March 19 to consider investment proposals. OCL India's Board will meet on March 19, to consider the Scheme(s) of Arrangement for the demerger of Sponge Iron & Steel and Real Estate operations of the company.
Bayer Diagnostics India's Board will meet on March 19, to approve and take on record the Annual Audited Financial Results and to recommend dividend, if any.
US stocks closed lower on Friday as a mixed set of economic reports prompted investors to remain cautious ahead of the Fed meeting. An increase in consumer prices in February dashed hopes that the central bank will cut interest rates to give a fillip to the world's largest economy amid growing worries over subprime mortgages.
The Dow Jones Industrial Average had its sixth weekly loss this year and worst start since 2003. The Dow fell 49.27 points, or 0.4%, to 12,110.41. The S&P 500 declined by 5.33 points, or 0.4%, to 1386.95, while the Nasdaq shed 6 points, or 0.3%, to 2372.66.
The S&P 500 has slipped 1.1% since March 9, erasing the previous week's rebound from a worldwide selloff. The Dow is down 1.4% on the week and the Nasdaq dropped 0.6%. The Dow has lost 2.8% since the end of 2006, the worst start to a year since 2003.
European shares ended lower on Friday. German DAX 30 closed down 0.07% at 6,580.78, the French CAC 40 lost 0.1% at 5,382.16 and the UK's FTSE 100 gave up 0.04% at 6,130.60. The pan-European Dow Jones Stoxx 600 index slipped 0.2% at 358.48.
Most Asian markets were trading up this morning. NTT DoCoMo and Takeda Pharmaceutical led gains on speculation they will pay higher dividends. The Morgan Stanley Capital International Asia-Pacific Index added 0.2% to 141.58 as of 10:56 a.m. in Tokyo. The benchmark dropped 4.6% over the past three weeks, its longest stretch of weekly slides in almost six months.
Japan's Nikkei 225 Stock Average climbed 0.8%, rallying from a third weekly drop. Markets elsewhere rose, except for in China and the Philippines. Australia's S&P/ASX 200 Index gained, led by regional banks after Bank of Queensland made a A$2.4 billion ($1.9 billion) offer for Bendigo Bank Ltd.