We must embrace pain and burn it as fuel for our journey
After the gains, the pain is here for the market. Expect a weak start. US automaker bailout deal seems to have fallen apart in the Senate. Inflation falling to a seven-month low no longer fuels the bulls though rising inflation used to hurt a lot. The outlook for the day remains weak with wild swings likely once the IIP numbers for October are announced. Given the cut in production by various industries the bears may have a chance to rejoice as IIP numbers may be in the 2% range.
Talking about fuel, reports suggest that the Government plans to deregulate petrol and diesel prices. Besides political gains, this move will have a positive impact on inflation. The risks remain that companies may not be allowed to raise prices frequently and of course the government finances could take a hit.
Among other news:
The government is also likely to announce a second stimulus package to propel economic growth.
FIIs were net buyers in Index Future by Rs636cr with increase in open interest by 82,621 contracts (17.1%). In Single Stock Future, they have gone short to the tune of Rs71cr with increase in open interest by 11,895 contracts (1.3%). In the Index Option segment, they were net buyers by a mere Rs2cr. FIIs were net sellers in cash segment by Rs444cr (Provisional). DIIs were net sellers in cash segment by Rs16cr (Provisional).
RBI extends Rs90bn line of credit to NHB and Exim Bank. With RBI providing refinance to EXIM Bank, exporters will now be able to avail of lines of credit.
Index of 6 core industries fell to 3.4% in October against 4.6% in the same month last year.
India’s exports declined by 10% in November, showing a negative trend for the second month.
Excise and custom duty collections declined in November by 15% and 1% respectively.
PSU Banks are likely to announce 50-100bps cut in interest rates on home loans up to Rs2m. PSBs may waive pre-payment penalty on home loans up to Rs2m.
RBI may have relaxed norms for lending to commercial real estate by banks.
Government to miss indirect tax collection targets.
207 of the 516 central government projects, each costing Rs1bn are delayed.
Bank of America Corp. said Thursday it expects to cut 30,000 to 35,000 jobs over the next three years, as it faces a deteriorating economic environment and tries to absorb Merrill Lynch & Co.
The Government has withdrawn its affidavit from the RIL-RNRL case and that explains that volatility on these counters especially towards the end of trade.
Americans are pulling back on the debt they use to spend and fuel the economy, while their net worth is declining. The US government reported that household debt in the third quarter fell for the first time ever. Meanwhile, net worth dropped by the largest amount on record based on data going back to 1951.
US Stocks fell on Thursday on worries that the $14 billion auto rescue bill won't pass in the Senate due to Republican opposition.
The Dow Jones fell 196 points, or 2.2%. The Standard & Poor's 500 (SPX) index lost 2.9% and the Nasdaq composite (COMP) lost 3.7%.
Bank of America said it will cut up to 35,000 jobs over the next three years due to its purchase of Merrill Lynch and the weak economy.
Jobless claims continued to surge, according to a government report released Thursday. The number of Americans filing new claims for unemployment benefits rose to a 26-year high of 573,000, up 58,000 from the previous week and a bigger surge than expected. The number of people continuing to collect unemployment also hit a 26-year high.
The dollar fell versus the euro and the yen.
U.S. light crude oil for January delivery rose $4.46 to settle at $47.98 a barrel on the New York Mercantile Exchange.
COMEX gold for February delivery jumped $17.80 to settle at $826.60 an ounce.
A government report showed that China’s retail sales grew at the slowest pace in nine months
Japan’s Nikkei is down over a percent. South Korea’s Kospi Index is lower by half a percent. The MSCI Asia Pacific Index has fallen 44% this year.
Indian markets took a breather on Thursday after rallying over 5% on Wednesday. Markets traded in a range for major part of the trading session. However, key indices turned highly volatile in the second half of the day. The IT and capital goods stocks were the major losers. Also pharma and telecom stocks were under pressure.
Bucking the negative trend were, realty, oil & gas, metals and banking stocks. The BSE benchmark Sensex ended flat at 9,645 and the NSE Nifty index ended flat at 2,920.
Market breath was positive, 1,567 stocks advanced against 94 declines, while, 94 stocks remained unchanged.
Among the 30-components of Sensex, 18 stocks ended in the red and only 12 stocks ended in the positive terrain, the big gainers were JP Associates (11%), Sterlite Industries (9.5%), RCom (5.5%) and Reliance Industries (5.1%).
On the other hand, major sellers were TCS (6.5%), Satyam (5.5%), Wipro (5.2%), Hindalco (4%) and Infosys (3.3%).
Shares of Petronet LNG have advanced by 4.3% to Rs33 after the company announced that it signed one year LNG supply agreement beginning January 2009. The scrip touched an intra-day high of Rs34.2 and a low of Rs32.4 and recorded volumes of over 5,00,000 shares on BSE.
Shares of Suzlon Energy surged by over 2.5% to Rs50. according to reports, the company said that it has rejig the top management, CMD to steer company’s operations. The scrip touched an intra-day high of Rs54 and a low of Rs47 and recorded volumes of over 2,00,00,000 shares on BSE.
Shares of GMR Infrastructure gained by 4.5% to Rs65 after reports stated that the company’s Andhra Pradesh plant has started electricity generation. The scrip touched an intra-day high of Rs67.1 and a low of Rs63.4 and recorded volumes of over 31,00,000 shares on BSE.
KIC Metaliks shot up by over 18% to Rs22 after the company announced that the promoters of the company (Sri R K Kajaria, Smt. A Kajaria, R K Kajaria & Sons HUF have entered into a share purchase agreement on December 07, 2008 with Karni Syntex (P) Ltd, (the acquirer) to sell their collective holding of 47.67% of the paid up capital of the Company at Rs18 per share.
The scrip touched an intra-day high of Rs22.4 and a low of Rs19.5 and recorded volumes of over 14,000 shares on BSE.
With the RBI governor indicating that the growth forecast might be revised downwards when the central bank reviews the annual policy in January 2009 bulls might lose their steam. Also, the IIP numbers to be announced later on Friday would be anxiously awaited.