Whatever you fear most has no power - it is your fear that has the power.
The market is all set to drift further down in the wake of renewed weakness in global markets. US stocks fell on Friday after a government report painted a grim picture for the labour market there. Asian markets have opened lower this morning. Overall trend is likely to be choppy amid anxiety about corporate earnings and fragile state of the global economy. A key event to watch today will be the IIP numbers for November. The data is expected to reveal slight improvement over October, when the key industry barometer had shrunk by 0.4%.
Tuesday of course will be a big day, as IT giant Infosys comes out with its Q3 results. Market expectations remain muted due to the global economic downturn, especially in the US. Infy may have to cut its full-year guidance again. Overall, the IT sector continues to be out of favour with most investors. The ECB will meet on Thursday to review its monetary policy.
Satyam will continue to hog the limelight, as the government and regulators seem to be working on a war-footing to mitigate the fallout from the Satyam scam. So, another cautious opening is on the cards followed by rangebound trade with negative bias.
Key Results Today: Exide Industries, Fertilizers & Chemicals, Jay Bharat Maruti, RS Software, Sical Logistics and South Indian Bank.
FIIs were net sellers in the cash segment on Friday at Rs3.5bn (provisional) while the local institutions pulled out Rs132.6mn. In the F&O segment, FIIs were net buyers of Rs3.09bn. Foreign funds were net sellers of Rs10.58bn in the cash segment on Wednesday.
US stocks slid on Friday after a government report showed another half-a-million drop in payrolls in December, making 2008 as the worst year for the labour market since the end of the World War II in 1945.
The Dow Jones Industrial Average lost 143.28 points, or 1.6%, to end at 8599.18, while the S&P index shed 19.38 points, or 2.1% to 890.35, while the Nasdaq Composite index fell 45.42 points, or 2.8% to 1571.59.
Stocks tumbled through the morning, briefly trimmed losses in the early afternoon and then tumbled anew in the last hour.
The key indices extended the worst weekly slump since November on concern that an increase in the unemployment rate to an almost 16-year high signals that the global recession is worsening.
The blue-chip Dow lost 4.8% on the week, while the S&P 500 declined 4.5% and the Nasdaq dropped 3.7%. The S&P 500’s drop this week was its worst performance since it sank to an 11-year low in November.
Market breadth was negative. On the New York Stock Exchange, losers beat winners seven to three on volume of 1.16 billion shares. On the Nasdaq, decliners topped advancers by almost three to one on volume of 1.94 billion shares.
Employers cut 524,000 jobs from their payrolls last month after cutting a revised 584,000 in November. That brought last year's total job losses to nearly 2.6mn, the worst year for workers since 1945.
The number was roughly in line with the 525,000 forecast by economists. However, many on Wall Street had feared that the number might be even higher, after a report earlier this week showed the private sector lost 693,000 jobs in December.
The unemployment rate, generated by a separate survey, rose to 7.2% from a revised 6.8% in November. Economists had forecast a reading of 7%.
President-elect Barack Obama said rising joblessness is a stark reminder of the need for Congress to act with urgency on his stimulus plan to boost the US economy. Some Democrats have criticized the portion of the plan devoted to tax cuts, while Republicans are concerned about its effect on the deficit.
"Clearly, the situation is dire. It is deteriorating," Obama told a news conference in Washington. "For the sake of our economy and our people, this is the moment to act, and to act without delay."
In a Television interview, outgoing Treasury Secretary Henry Paulson endorsed a robust fiscal stimulus to revive the US economy, and urged his successor to keep deploying the US$700bn financial-rescue fund.
Citi shares slid 5.7% after Former Treasury Secretary Robert Rubin resigned from his position as senior counselor. Rubin, who advised the bank as it lost USUS$20bn in the sub-prime mortgage crisis, also said he won’t stand for re-election to the board.
Separately, media reports suggested that Citi may merge its brokerage unit with the one at Morgan Stanley.
CVS shares suffered their steepest loss since October 2001. Adjusted earnings in 2009 will be US$2.53 per share to US$2.61 a share after a significant number of pharmacy-management program contracts were renegotiated at lower prices, CVS said.
The company's forecast trailed the average analyst estimate of US$2.69 a share.
Boeing said that it is cutting 4,500 jobs, essentially undoing the employment gains it had made in 2008. The company had been one of the few big firms adding employees amid the recession.
No. 1 electronics firm Best Buy narrowed its fiscal 2009 profit forecast, saying it now expects earnings of US$2.50 per share to US$2.70 per share. That sets the midpoint below analysts' current forecast for US$2.61 per share. Shares of Best Buy lost 5%.
Circuit City said it is talking with two companies that could buy it outright or provide it with financing so it can stay afloat. The No. 2 electronics chain filed for bankruptcy protection in November.
Lennar shares plunged as much as 28% after a group accused the No. 2 homebuilder of operating certain joint ventures like a Ponzi scheme. However, shares recovered a bit after the company shot down the accusations.
Treasury prices fell, raising the yield on the benchmark 10-year note to 2.49% from 2.44% on Thursday. Yields on the 2-year, 10-year and 30-year Treasurys all hit record lows last month.
Lending rates improved. The 3-month Libor rate fell to 1.26% from 1.35% on Thursday. Overnight, Libor held steady at 0.10%. Libor is a key bank lending rate.
The dollar tumbled versus the yen and gained versus the euro. COMEX gold for February delivery rose 50 cents to settle at US$855 an ounce.
US light crude oil for February delivery fell 87 cents to settle at US$40.83 a barrel on the New York Mercantile Exchange. Gasoline prices rose 2 cents to a national average of US$1.782 a gallon.
European shares lost ground for the third straight session on Friday. The pan-European Dow Jones Stoxx 600 index fell 0.5% to 207.82, with oil producers and miners some of the worst performers. Germany's DAX 30 index slid 2% to 4,783.89 while the French CAC-40 index declined 0.8% to 3,299.50 and the UK's FTSE 100 index closed down 1.3% to 4,448.54.
Indian markets closed in the negative terrain for second straight trading session as investors and traders opted to offload amid badly hit sentiments following the Satyam scam.
Selling was seen all across the board with the realty, metals’, capital goods and oil & gas stocks among the worst hit sectors.
The BSE benchmark Sensex ended at 9,958 adding 54 points and the NSE Nifty index ended at 3,046 up 13 points.
Shares of Simplex Projects surged by over 5% to Rs55 after the company announced that it won contract worth Rs20bn from the government of Libya, as Public Works Contract, for execution of 2000 (Two Thousands) housing units, service buildings and related infrastructure on turnkey basis in Ghira, Libya. The scrip touched an intra-day high of Rs55.8 and a low of Rs52 and recorded volumes of over 9,000 shares on BSE.
Shares of Punj Lloyd tumbled by over 16% to Rs115 after the Company's wholly-owned UK subsidiary, Simon Carves Ltd ("SCL"), commenced adjudication proceedings against SABIC Petrochemicals UK Ltd ("SABIC").
These proceedings are ultimately aimed at seeking restitution, through the U.K. Courts, of Euro 28.5 million in respect of an advance payment bond and a performance bond called by SABIC following in SCL's view, the wrongful termination by SABIC of the contract between SABIC and SCL.
The scrip touched an intra-day high of Rs140 and a low of Rs106 and recorded volumes of over 70,00,000 shares on BSE.
Ranbaxy slipped by 7% to Rs218. The company announced that it would receive a milestone payment from GSK Pharma and it said that it has initiated phase I studies for GSK Pharma’s respiratory drug. The scrip touched an intra-day high of Rs235 and a low of Rs215 and recorded volumes of over 5,00,000 shares on BSE.
Shares of Bosch slipped by 0.5% to Rs3016 after the company at its meeting proposed to suspend manufacturing of Starters and Generators and related activities at the Naganathapura Plant on various dates from January 10, 2009 to January 31, 2009. The scrip touched an intra-day high of Rs3087 and a low of Rs3000 and recorded volumes of over 3,000 shares on BSE.