Beware the pull on your heartstrings -- it's often the purse strings that are actually being reached for.
Don’t push in your money as yet. A month has already passed in 2009 and the key indices are down 3.5% in the Jan series. The Feb. futures are trading at a steep discount. F&O data confirms the widely held view that the two-day rally was led by short-covering. Though local funds are trying their best to lend their hand in keeping sentiment better, lack of buying from FIIs continues to play spoilsport. For FIIs to make a beeline for Indian stocks again, risk aversion needs to subside. This can only happen when the global economy bounces back from the current slump. When this will happen is anybody’s guess. But nobody’s guessing as yet.
In a nutshell, there are still a lot of uncertainties for the market to start rising on a sustainable basis. The latest earnings season, both locally and globally, has been bad, and things could get uglier going forward. Though short-term bear market spurts are not completely ruled out, trade carefully, as these are choppy times. Today, we see the market extending Thursday’s fall at start. Thereafter, the key indices may turn rangebound and sideways.
Key Results Today: Aban Offshore, Adani Enterprises, Adlabs, Alok Industries, Amtek Auto, Amtek India, Ansal Infra, Apollo Hospitals, Asian Hotels, Aurobindo Pharma, Balrampur Chini, BEML, BF Utilities, Bharati Shipyard, Bombay Dyeing, CEAT, Colgate Palmolive, Deccan Chronicle, Dredging Corp., DS Kulkarni, Essar Shipping, Finolex Industries, GHCL, Gillette India, GNFC, Gujarat Industries Power, Hindalco, IFCI, Indiabulls Real Estate, IOC, IOB, Indraprastha Gas, IVRCL Infra, Jain Irrigation, Kalpataru Power, KEC International, Lanco Infra, L&T, MTNL, Maharashtra Seamless, Moser Baer, Mundra Port, National Fertilizers, OBC, Patel Engineering, Pfizer India, PNB, PVR, Renuka Sugars, Siemens, SRF, Sun Pharma, Tata Motors, Tata Tea, Titan, Trent and Welspun Gujarat.
FIIs were net sellers in the cash segment on Thursday at Rs846.4mn (provisional) while the local institutions pumped in Rs5.8bn. In the F&O segment, the foreign funds were net buyers at Rs10.69bn. On Wednesday, FIIs were net buyers at Rs252mn in the cash segment.
US stocks tumbled on Thursday, with the Nasdaq and S&P 500 snapping a four-day winning streak, following more dire news on earnings, housing and employment.
Friday's big news of note is the advanced reading on fourth-quarter GDP, which is expected to have plunged 5.4% from a year ago, making the quarter the worst in over 26 years.
In addition to GDP, Friday brings a report on manufacturing in the Midwest region along with the University of Michigan's consumer sentiment index. Both are expected to roughly hold steady from the previous month.
Dow components Honeywell and P&G are expected to report higher quarterly earnings Friday morning. Oil companies Chevron and Exxon Mobil, a Dow component, are both expected to report weaker quarterly earnings Friday morning.
The Dow Jones Industrial Average slid 226 points, or 2.7%, to end at 8,149.01. The Standard & Poor's 500 index lost 29 points, or 3.3%, to 845.14. The Nasdaq Composite index shed 50 points or 3.2%, to 1,507.84.
US stocks had rallied through the first week of the year, plunged 14% through late last week and then managed to bounce back for a few sessions.
The recent advance was predicated on optimism about the government's plan to set up a "bad bank" to take toxic assets off bank balance sheets and hopes that President Obama's massive economic stimulus plan would help.
But enthusiasm about the bad bank waned, sending financial stocks tumbling on Thursday. In this economic environment, it is going to be hard to sustain any advance for more than a few days.
Investors put money back into stock mutual funds over the past week, after withdrawing money in the previous week. For the week ended Jan. 28, investors poured $6.5 billion into stock funds, according to investment-research firm Trim Tabs. In the previous week, investors pulled $138 million out of funds.
After the close, online retailer Amazon.com reported quarterly sales and earnings that topped analysts' forecasts. Shares gained 13% in extended-hours trading and were likely to drive technology gains on Friday.
New home sales plunged in December to the lowest level since record-keeping began in 1963. Sales fell to a seasonally adjusted annual unit rate of 331,000 in the month, down 14.7% from November and short of forecasts.
Weekly jobless claims rose to 588,000 last week, the government reported, while the number of Americans drawing benefits for a week or longer rose to the highest level on record.
A third government report showed new orders for durable goods fell 2.6% in December, falling for the fifth straight month.
Ford Motor said it lost $5.9 billion in the fourth quarter and $14.6 billion for the full year. However, the company again said it does not need the federal bailout that's already been taken by rivals General Motors (GM) and Chrysler. Ford's credit unit said it was cutting 1,200 jobs or 20% of its staff.
Employers announced thousands of job cuts each day this week, including potentially more than 13,000 on Thursday. Companies impacted include Eastman Kodak, Charles Schwab and AstraZeneca.
Late on Wednesday, Starbucks reported quarterly sales and earnings that were short of forecasts and said that it could cut up to 6,700 jobs in 2009.
Dow component 3M reported weaker quarterly earnings that nonetheless topped forecasts, and warned that 2009 earnings won't meet its earlier forecast. The stock gained 2%. It was one of only three of the Dow 30 that ended the session higher.
Dow component AT&T stumbled 4.6% one day after it reported lower quarterly earnings and higher revenue, both of which missed forecasts.
Treasury prices tumbled, raising the yield on the benchmark 10-year note to 2.86% from 2.66% on Wednesday. Treasury prices and yields move in opposite directions. Yields on the 2-year, 10-year and 30-year Treasurys all hit record lows last month.
Lending rates held steady. The 3-month Libor rate held steady at 1.17%, unchanged from Wednesday. Overnight Libor was also unchanged at 0.22%. Libor is a bank-to-bank lending rate.
US light crude oil for March delivery fell 72 cents to settle at $41.44 a barrel on the New York Mercantile Exchange. Gasoline prices rose one-tenth of a cent to a national average of $1.843 a gallon.
The dollar gained versus the euro and fell against the yen. COMEX gold for April delivery rose $16.50 to settle at $906.50 an ounce.
European shares fell sharply, breaking a three-session winning streak, with banks and airlines among the heaviest-hit stocks. The pan-European Dow Jones Stoxx 600 index fell 1.8% to 190.79. The Stoxx 600 index had rallied 6.5% over the previous three sessions.
The UK's FTSE 100 index closed down 2.5% at 4,190.11, while the French CAC 40 index fell 2.2% to 3,009.75 and Germany's DAX 30 index lost 2% at 4,428.11.
Markets snapped a two day rally as bulls took a breather on Thursday. After a strong start to the session, key indices were unable to hold on to their gains on the back of a rise in the inflation and weak cues from the European markets. The realty, power and capital goods stocks witnessed offloading. The second rung stocks were also under pressure. The BSE benchmark Sensex marginally slipped 21 points to close at 9,236 and the Nifty slipped 25 points to close at 2,823.
Among the 30-components of Sensex, 14 stocks ended in the green and 16 stocks ended in the negative terrain. Among the major gainers in the Sensex were Infosys, HDFC, Maruti and Tata steel. Bharti, BHEL, L&T and Reliance Industries were among the major laggards.
Shares of surged by over 4.5% to Rs544. The company announced its Q3 results with a 54% drop in its net profit to Rs2.13bn as compared to Rs4.67bn and income from operations at Rs46.26bn.
The scrip touched an intra-day high of Rs553 and a low of Rs521 and has recorded volumes of over 7,00,000 shares on BSE.
Unitech announced that it would raise Rs50.bn via GDR assuming share price of Rs36.78/share,
The stock recovered sharply from its days low and ended at Rs31.2 up by over 1.5%. The had hit an intra-day high of Rs33 and a low of Rs28 and recorded volumes of over 3,00,00,000 shares on BSE.
Suzlon Energy clarified that the company or its subsidiaries had not planned to embark upon any such investment.
The company clarified for the news regarding investment by Suzlon to an extent of Rs500bn in Steel projects. The stock ended down 3% to Rs44.6 hitting an intra-day high of Rs48.3 and a low of Rs43.8 and recorded volumes of over 1,00,00,000 shares on BSE.
Shares of Satyam Computers plunged by over 10% to Rs49.8 after 27mn equity shares of the company changed hands on the NSE. Almost 4% of the company’s equity was traded in a huge block.
Fresh month contracts in Satyam will not be introduced for the expiry month April 2009 on the expiration of January 2009 contracts.
All existing Satyam contracts (with expiry dates Feb 26,'09 and March 26, '09) will expire on January 29, 2009. No F&O contracts will be available in the SATYAMCOMP for trading from January 30, 2009 onwards. The stock will however, continue to trade in the cash segment.
The scrip touched an intra-day high of Rs60 and a low of Rs44 and recorded volumes of over 9,00,00,000 shares on BSE.
Bharat Forge and AREVA signed MoU to set up a Joint Venture to build a manufacturing facility for heavy forgings in India.
Bharat Forge and AREVA are presently evaluating various locations in the Country to set up the new facility. The plant is expected to become operational by 2012. The JV will have a state-of-the-art 14,000 Ton open die forging press with associated equipment and an integrated steel making facility."
Bharat Forge surged by over 7% to close at Rs85. The stock hit an intra-day high of Rs88.3 and a low of Rs80 and recorded volumes of over 2,00,000 shares on BSE.