We all have strength enough to endure the misfortunes of others.
Misfortune seems to have dominated most events, places and persons this year. Just three days to go before the curtains come down on what has been a disastrous year for world markets. The Indian market is down over 50%, that too after hitting all-time highs in early January (a year best forgotten for bulls). We will of course not go into the details of what exactly went wrong this year, as it is already well articulated by now.
Today, we see the key indices opening in the red again, though not by much. Things could improve during the week after last week's 7% drop. Asian markets are mostly down this morning, led by South Korea's Kospi. Crude oil is up over 4% at around $39 per barrel. US stocks closed marginally higher on Friday while European markets were shut for Christmas holidays.
Satyam will be in the limelight as it has deferred its Board meeting. There is talk of the promoters facing margin calls on pledged shares. Also, the IT major could be a takeover target or at least the top management may have to go following the terrible events of the past couple of weeks. ICICI Bank is said to be ready to lower rates by up to 75 bps. PSU banks will also be in action in the wake of the sharp dip in bond yields.
Top airlines like Jet Airways and Kingfisher may also grab some attention after slashing fares and claims of a breakeven this year. Core Projects and Rolta are believed to be closing in on acquisitions. Ajanta Pharma could be under pressure as it has lost a trademark case to US-based Alcon. Tata Power is set to buy the entire 2,000 MW output from Chennai-based Spice Energy.
We expect the market to be lackluster and sideways. Investors are likely to remain on the sidelines for the next few days given that companies will soon start announcing quarterly results. Some news is also awaited on the next round of fiscal stimulus and the anticipated rate cuts by the RBI. The central bank is scheduled to undertake a quarterly review of its annual policy at the end of the month. Softening of Indo-Pak tension is seen as a positive. On the whole, earnings will be a key focus area. More than 20% drop in advance tax numbers for the October-December quarter spooked the sentiment on Friday.
One only hopes that the bulls will be much better off in 2009 than the year that is just set to pass us by. Some recovery is expected in the second half in terms of improvement in micro as well as macro economic fundamentals. Corporate earnings over the next few quarters will hinge on how fast the economic scenario changes (for the better that is). Right now all is in the realm of speculation. Lots of uncertainties still loom large over the world markets. However, a lot of bad news is already built into the stock prices and investors are just looking for light at the end of the tunnel. Hopefully it won't be that of a speeding train (read more bad news).
US stocks ended higher on Friday in thin trading, led by gains in energy shares as crude oil prices advanced. Retailers were also in focus amid reports of a dismal Christmas shopping season.
The Dow Jones Industrial Average rose 47 points to 8,515, with 17 of its 30 components gaining ground, led by the likes of Alcoa, Exxon Mobil and Coca-Cola. Shares of General Motors (GM) led gainers among blue chips, rising 13%.
The Federal Reserve approved the request by its finance arm, GMAC, to become a bank holding company and become eligible for financing under the US Treasury Department's US$700bn Troubled Asset Relief Program.
The S&P 500 index added 7.4 points to 872, while the Nasdaq Composite index advanced 5.3 points to 1,530.
For the week, the Dow dipped 0.7%, the S&P lost 1.6% and the Nasdaq fell 2.2%.
The energy sector led the gains on the S&P, rising 2%, as crude oil prices recovered some ground. Among other gaining sectors, were telecom (up 2%) and materials up (1.8%).
So far in 2008, the Dow has lost 35.8%, while the S&P, weighed down by financials, is down 40.6% and the Nasdaq is down 42.3%.
Trading volume was very light on Friday, with 516mn shares changing hands on the New York Stock Exchange and 218mn on the Nasdaq. Advancing issues topped decliners 3 to 1 on the NYSE, and 15 to 11 on the Nasdaq.
Total retail sales dropped 5.5% to 8% for November and December, according to MasterCard's SpendingPulse. The 40% drop in the price of gasoline compared with December 2007 accounted for almost half of the decline.
Excluding gasoline, total sales were down 2% to 4% this holiday season from the same period in 2007.
Amazon.com said that the 2008 holiday season had finished as its best ever, in spite of grim results across much of the overall sector.
Crude prices gained 6.7% to US$37.71 a barrel, lifting the energy sector, after a four-session drop and a 33% drop thus far in December.
The US dollar traded little changed, with poor retail sales doing little to further push the greenback's mid-December stabilization. The dollar index, which measures the currency versus six major counterparts stood at 80.89, virtually unchanged on the day.
Treasurys were slightly higher, with 10-year-note yields falling on evidence of poor retail sales, serving as a focus amid thin post-holiday trading. Ten-year yields fell 2 basis points to 2.18%.
Investors will return on Monday for the final few trading days of the year. Trading is expected to be choppy, with the market closed on Thursday and many market participants on vacation. But investors will have a few economic reports to digest.
The S&P/Case-Shiller Home Price Index, a manufacturing survey for the Chicago region, and a reading of consumer confidence, all are due on Tuesday.
Wednesday brings weekly jobless-claims data, an update on mortgage applications and crude oil inventories. Markets will be shut on Thursday, and no economic data will be released on New Year's Day. On Friday, a survey of the national manufacturing sector is likely to be closely watched.
In corporate news, two of the nation's top automakers, GM and Chrysler will take possession on Monday of the first part of the $13.4bn in emergency loans from the government.
London and other European markets were closed for Christmas holidays on Friday.
In the emerging markets, the Bovespa in Brazil was up 1% at 36,864 while the Bolsa index in Mexico gained 0.8% at 22,515. The RTS index in Russia was down 1.7% to 644 while the ISE National 30 index in Turkey climbed 1.7% to 34,618.
Indian stock market ended the Christmas week with losses on account of the growing tension between India and Pakistan. Markets also witnessed trading volumes were low not only in India but also across the globe, with many participants choosing to extend the Christmas vacation.
The BSE benchmark Sensex ended at 9,328 losing 239 points and the NSE Nifty index ended at 2,857 losing 59 points.
All the BSE Sectoral indices ended in the red with BSE Consumer Durable index (down 6%), BSE Realty index (down 5%), BSE Bankex index (down 4%) and BSE Capital Goods index (down 3.6%).
Reliance Petroleum gained by 6% to Rs84 as reports stated that the company's 29mn tons export refinery goes on stream. The scrip touched intra-day high of Rs89.45 and low of Rs82 and recorded volume of over 1,00,00,000 shares on BSE.
Reliance Infrastructure fell 6% to Rs542. According to reports, company emerged as the sole bidder for NHAI’s Eastern Peripheral Expressway project, entailing an investment of Rs27bn.The scrip touched intra-day high of Rs604 and low of Rs528 and recorded volume of over 21,00,000 shares on BSE.
Bharat Forge declined by 4% to Rs78. According to reports, company is planning to cut output and put its expansion on fast track. The scrip touched intra-day high of Rs84.95 and low of Rs78 and recorded volume of over 1,00,000 shares on BSE.
Reliance Power slipped 3% to Rs114. The company is raising around Rs115bn via syndicated loans, and US$500-600mn through ECBs to finance its upcoming UMPP at Sasan in Gujarat, reports stated. The scrip touched intra-day high of Rs121.70 and low of Rs113.90 and recorded volume of over 18,00,000 shares on BSE.