Attempt easy tasks as if they were difficult, and difficult as if they were easy;
in the one case that confidence may not fall asleep, in the other that it may not be dismayed.
Peace and stability have evaded markets for some time now. Just yesterday the bulls felt stimulated. Today could be a different game with mixed global cues. With the market having already discounted the news on the impending economic stimulus package, including fresh round of rate cuts, the indices may not go too high from these levels. Having said that, the Indian market could extend gains if there is a fresh spike in European markets later in the day.
All eyes today will be on today's monthly unemployment report, which again is likely to paint a grim picture of the labour market scenario in the US. The fate of the Big Three automakers is still hanging in balance. Even if they get aid from Washington, the big question is will they be able to beat the global economic slump.
Regulators across the globe continue to be in the fire-fighting mode. European central banks were busy cutting rates aggressively to revive growth and avoid deflation. Here in India, SEBI chose to ease the pressure in the comatose primary markets by giving IPO-bound companies a breather. The market regulator has also sought to tackle any future redemption pressure in the mutual funds by banning premature withdrawals in close-ended schemes. Its remains to be seen whether the fresh set of measures will have any positive impact on sentiment. Past attempts at shoring up the mood in markets have failed to kick-start any sort of a rally.
Meanwhile, our market was on another planet altogether on Thursday. The key indices shot up 5% each on reports that the Government is set to unleash new fiscal and monetary steps to prop up the sliding economy. Traded volume and turnover both improved slightly and market breadth too was positive. Today, we expect the market to open on a cautious to slightly higher note. US shares were down 2.5-3%, while European and Emerging markets fell marginally. Asian markets are largely up this morning with markets in Tokyo, Hong Kong and Seoul leading the advance.
US shares closed lower on Thursday, snapping a two-day winning streak, as the Big Three automakers repeated their plea for federal aid even and retailers reported dismal sales. Announcement of big job cuts by corporate giants like AT&T and DuPont made investors nervous ahead of Friday's employment report for November.
The Dow Jones Industrial Average rose slightly early on only to slip again, accelerating losses as the session drew to a close. After falling by more than 300 points, the blue chip index recovered a bit to close down 215.45 points, or 2.5%, to 8,376.24.
Of the blue-chip index's 30 components, 25 finished in the red, with General Motors (GM) down the most, falling 16.1%. On Capitol Hill, executives from GM and struggling rivals Ford and Chrysler continued to make their case for federal aid.
JP Morgan Chase and McDonald's proved the Dow's biggest gainers, both climbing more than 2%.
The S&P 500 index declined 25.52 points, or 2.9%, to 845.22, with energy and IT pacing declines that included all but one of the index's 10 industry groups. Consumer discretionary was the only S&P sector to finish in the black.
The Nasdaq Composite index fell 46.82 points, or 3.1%, to 1,445.56 with technology stocks in the red, as chipmaker Advanced Micro Devices (AMD) joined the chorus of those warning of quarterly sales declines.
Executives from GM, Ford and Chrysler testified before a Senate panel in an effort to get a US$34bn aid package from Congress. They speak before a House panel on Friday. Reports said that GM has considered a pre-arranged bankruptcy filing and is exploring a reorganization with workers, creditors and lenders.
Ahead of Friday's employment report, a slew of major companies announced more than 20,000 job cuts.
AT&T said it would cut 12,000 jobs, or 4% of its workforce, while DuPont said it was cutting 2,500 jobs. Both companies are Dow components. Also, Swiss bank Credit Suisse said it was cutting 5,300 jobs, or about 11% of its workforce, in the US and globally.
A trio of financial services firms had announced 3,000 job cuts on Wednesday. Also on Wednesday, payroll-processing firm ADP said that 250,000 private sector jobs were cut.
In other employment news, the number of Americans filing for new claims for unemployment benefits last week dipped to 509,000 from a revised 530,000 the previous week. Economists had expected jobless claims of 540,000. It's the smallest number of initial jobless claims since the week ended Nov. 1. Claims have dropped for two straight weeks after hitting a 16-year high of 543,000.
However, the four-week moving average of new claims - which smoothes out distortions caused by one-time events such as holidays and weather - rose by 6,250 to 524,500, the highest in 16 years.
Mobile phone maker Nokia cut its industry outlook for the second time in less than a month and warned it may lose market share.
Wal-Mart Stores continued to outperform the overall retail sector. Wal-Mart reported a 3.4% rise in November same-store sales, or sales at stores open a year or more. That was above the company's growth forecast of 1% to 3%. But other chains had a rougher period.
In the day's economic reports, October factory orders fell 5.1% after declining a revised 2.5% in September. Economists thought orders would fall 4.5%.
On Friday, the government is expected to report that employers cut 325,000 non-farm jobs from their payrolls in November after cutting 240,000 in the previous month. The unemployment rate, generated by a separate survey, is expected to have risen to 6.8% from 6.5% in the previous month.
Federal Reserve chairman Ben Bernanke said that the housing market is the key to the economic recovery and that the government has to do more to deal with foreclosures. The Fed chief voiced support for expanding government programs and using additional federal funds to limit foreclosures.
Treasury bond prices rallied, lowering the yield on the benchmark 10-year note to 2.56% from 2.66% late on Wednesday. The 10-year yield dipped below 3% last week for the first time since the note was first issued in 1962.
The yield on the 3-month Treasury bill inched up to 0.02% from 0.01% on Wednesday, but still near the 68-year low of zero hit last month. The 3-month is seen as the safest place to put money in the short term. A low yield means wary investors would rather preserve cash despite earning little or no interest on it than risk the stock market.
Lending rates eased. The 3-month Libor rate slipped to 2.19% from 2.20% on Wednesday, while overnight Libor fell to 0.52% from 0.88% on Wednesday. Libor is a key bank lending rate.
The dollar gained versus the euro and fell against the yen. COMEX gold for February delivery lost US$5 to settle at US$765.50 an ounce.
Oil prices at an almost 4-year low and a sell-off in gold and other metals kept the global recession in focus and added to the stock selling. US light crude oil for January delivery fell US$3.12 to settle at US$43.67 a barrel on the New York Mercantile Exchange, ending at a nearly 4-year low.
Gasoline continued its fall to nearly four-year lows, with prices down 1.4 cents to a national average of US$1.789 a gallon. Prices have been sliding for 2-1/2 months and have dropped more than US$2 a gallon, or 53%.
European shares fell on Thursday, notwithstanding the aggressive rate cuts announced by two of the continent's biggest central banks. Although stocks initially showed little reaction to the rate cut announcements, they soon turned lower.
The pan-European Dow Jones Stoxx 600 index declined 0.5% to 197.40, after trading as high as 202.32 before the rate cuts.
The UK's FTSE 100 index closed down 0.2% to 4,163.61, while the French CAC-40 index declined 0.2% to 3,161.16. Germany's DAX 30 index fell 0.1% to 4,564.23.
The European Central Bank (ECB) cut its key rate by 75 basis points to 2.50% and the Bank of England (BOE) slashed its key rate by 100 bps to 2%. The Swedish and Danish central banks also lowered their key rates.
The BSE benchmark Sensex regained the 9000 levels on Thursday on the back of heavy buying witnessed in scrips across the sectors after inflation further declined.
Inflation declined more than expected in the week ended November 22 due to a sharp drop in fuel prices. The annual point-to-point inflation was 8.4% in the week ended Nov. 22 versus 8.84% in the previous week
Buying was witnessed all over especially in the interest rate sensitive stocks. The BSE Realty index rose 12.5% and the BSE Bankex index rose 5.6%.
The media sector was in demand throughout the day with stocks like NDTV, TV Today, Zee Entertainment and UTV Software were among the major gainers.
Finally, the BSE benchmark Sensex climbed 482 points to close at 9,229 and the NSE Nifty index was up 131 points ending at 2,788.
Market breath was strong, 1,498 stocks advanced against 669 declines, while, 58 stocks remained unchanged.
All the 30-components of Sensex ended in the green, the big gainers were Tata Motors (13.4%), JP Associates (13%), Tata Steel (12%), DLF (12%), and Sterlite (8.3%).
Dr Reddy’s Lab gained by 1% to Rs480 after the company yesterday announced that it won order to supply seven drugs to Allgemeine, a Germany based company. The scrip touched an intra-day high of Rs486 and a low of Rs465 and recorded volumes of over 65,000 shares on BSE.
Shares of Ranbaxy surged by over 3.5% to Rs210 after reports stated that the company would partner with a US drug firm BioPro Pharmaceuticals to launch Brain tumour drug. The scrip touched an intra-day high of Rs212 and a low of Rs201 and recorded volumes of over 3,00,000 shares on BSE.
Shares of PVR advanced by 4.5% to Rs65.6 after the company announced that it plans to set-up 15 entertainment centres and gaming zone by 2012, according o reports. The scrip touched an intra-day high of Rs69.2 and a low of Rs63 and recorded volumes of over 63,000 shares on BSE.
TTML gained by 1.5% to Rs19.7 after reports stated that the company would invest Rs1bn in phase-I of expansion at Jammu and Kashmir. The scrip touched an intra-day high of Rs19.8 and a low of Rs19.4 and recorded volumes of over 71,00,000 shares on BSE.
Shares of IPCA Labs advanced by over 4.5% to Rs348 after reports stated that the company announced share buy-back at a maximum price not extending Rs600 per share. The scrip touched an intra-day high of Rs370 and a low of Rs341 and recorded volumes of over 7,000 shares on BSE.