Keep your fears to yourself, but share your courage with others.
Welcome back. The courageous bulls have been basking in the glory of recent gains having enjoyed a nice rally in the past 4-5 weeks, thanks largely to a global rebound. Today is a different day though with things not looking all that bright for the bulls. We will have to grapple with the Infy results today. The guidance from the IT bellwether will be critical. Meanwhile, the US market is leading world markets lower. A poor report on retail sales is the culprit. However, there are renewed signs of revival, with Goldman Sachs beating Wall Street estimates and Intel saying that the PC market has already seen a bottom.
The gains could have been better but for all the public holidays in April. The spurt has come on the back of tentative signs of recovery in the western financial system and advanced economies. Durability of the current rally remains a question mark. But nobody is seeking answers for now. Fundamentals remain fragile. Although a fresh correction cannot be ruled out previous multi-month lows struck in October are less likely to be tested soon.
India Infoline reckons that Infosys would guide for a 0-5% decline in dollar revenues and EPS of Rs100-103 for FY10. Given that the stock has significantly outperformed the market in past three months, any negative surprise with respect to guidance could be severely punished.
Blue Dart Express and Rallis India are among the other prominent companies announcing their results today.
One will also have to take into consideration the starting of first phase of elections from Thursday. The uncertainty surrounding the outcome of the Lok Sabha polls may have some bearing on the sentiment.
What could help extend the current ascent is the fact that trading volume and turnover have improved in the past one month despite a slew of public holidays. In the first 15 days of March, average daily delivery volumes on NSE were Rs 7,500-8,000 crores. By comparison, the first 14 days of April, which had just six trading sessions, have seen volumes doubling to about Rs 15,000 crores.
US stocks slumped on Tuesday after a weaker-than-expected retail sales report gave investors a reason to retreat following a five-week run. The Dow Jones Industrial Average lost 137 points, or 1.7%. The S&P 500 index lost 17 points, or 2%. The Nasdaq Composite index was down 27 points, or 1.7%.
US stocks have been on the rise for five straight weeks on bets that the worst for the economy and financial sector has already happened. The recent rally has lifted the Dow 22%. It was the blue-chip barometer's best five-week run since May 1933, when it gained 31%. The advance followed a downturn that left the Dow and S&P 500 at more than 12-year lows, as of March 9.
In corporate news, Goldman Sachs reported a better-than-expected quarterly earnings report late on Monday, making it the second financial firm to surprise to the upside. But investors sent shares lower nonetheless, with the stock having spiked 54% year-to-date prior to the Monday announcement.
Goldman Sachs released better-than-expected quarterly profits late Monday, earning $3.39 per share on revenue of $9.43 billion. The company also said it plans to raise $5 billion through a stock offering to be used toward paying back its $10 billion government loan. Shares fell 11.6% on Tuesday.
Other financial shares slipped too, sending the KBW Bank index down 8.1%. Last week, Wells Fargo forecast a nearly $3 billion quarterly profit.
After the close, Intel reported weaker quarterly sales and earnings that topped expectations. The company's chief executive also said that he thinks PC sales bottomed in the first quarter and that the industry is returning to "normal seasonal patterns."
Retail sales fell 1.1% in March after rising a revised 0.3% in February. Economists predicted that sales would rise 0.3%. Sales excluding volatile autos rose 0.9% after jumping a revised 1% in the previous month. Economists thought sales would be unchanged.
The Producer Price index (PPI) fell 1.2% in March after rising 0.1% in the previous month. Economists expected PPI to be unchanged. The so-called "core" PPI, which strips out volatile food and energy prices, was unchanged after rising 0.2% in the previous month. Economists thought it would increase 0.1%.
February business inventories fell 1.3% after falling 1.3% in the previous month. Economists had projected inventories would fall 1.2%.
In other news, Federal Reserve Chairman Ben Bernanke said that there are tentative signs that the US economy's slide is slowing, but that a full recovery won't come until the financial sector stabilizes.
US President Barack Obama spoke about his administration's efforts to stabilize and recharge the economy. He warned about unpopular choices when it comes to restructuring the auto industry and American International Group (AIG).
On Tuesday morning, Dow component Johnson & Johnson reported weaker quarterly earnings that nonetheless topped estimates. Shares were little changed.
Treasury prices rose, lowering the yield on the benchmark 10-year note to 2.78% from 2.82% on Monday.
In currency trading, the dollar gained versus the euro and fell against the yen.
US light crude oil for May delivery fell 64 cents to settle at $49.41 a barrel on the New York Mercantile Exchange.
COMEX gold for June delivery fell $3.80 to settle at $892 an ounce.
Indian markets extended gains to fifth straight trading session on Wednesday despite starting the day with a huge negative gap. Bulls staged a strong come back with Sensex bouncing back nearly 600 points and the NSE Nifty index recovering nearly 200 points from their respective day’s low. The BSE Sensex surged 207 points to close at 10,742 and the NSE Nifty surged 86 points at 3,343.
Among the 30-components of Sensex, 22 stocks ended in positive terrain and 8 stocks ended in the red. JP Associates, NTPC, Tata Motors, Hindustan Unilever, L&T and ITC were among the major gainers. Among the top losers were Hindalco, M&M, RCom, HDFC Bank and Sterlite.
Shares of Aurobindo Pharma gained by 3.5% to Rs197 after the company announced that it received Swismedic approval for Finasteride tablets. The scrip has touched an intra-day high of Rs198 and a low of Rs183 and has recorded volumes of over 12,000 shares on BSE.
Shares of TCS gained by 4% to Rs604 after the company announced that it has entered into an agreement for a technology partnership with the Rajasthan Royals, champions of Indian Premier League 2008. The scrip touched an intra-day high of Rs612 and a low of Rs550 and recorded volumes of over 0.2mn shares on BSE.
Shares of Essar Oil further surged by 8.5% to Rs129 after hitting an intra-day high of Rs136 and a low of Rs112 and recorded volumes of over 10.4mn shares on BSE.
The stock surged for the fifth straight day its longest winning streak in almost two months. The stock has added 81% in the last five trading sessions. This is the longest stretch of gains since the period ended Feb. 10.
Shares of Tata Motors surged by over 6% to Rs222 after the company announced that it would set up a heavy truck manufacturing facility in Myanmar with a capacity of 1,500 units per annum, stated reports. The scrip touched an intra-day high of Rs225 and a low of Rs197 and recorded volumes of over 2.1mn shares on BSE.
NTPC Ltd. said on Wednesday that its provisional full year net profit rose 5.6% to Rs78.27bn on net sales of Rs421.82bn. Provisional net profit in the quarter ended March 31 was up 30% at Rs17.4bn, Chairman R.S. Sharma said today. That compares with Rs13.4bn in the same period a year earlier.
NTPC announced that it plans to add 3,300 MW of new electricity in fiscal year 2009-10 and plans to generate 1,000 MW of renewable energy by 2017. The state-run power utility company is also looking to acquire coal blocks in Indonesia and Mozambique.
The stock surged over 6% to end at Rs196 hitting an intra-day high of Rs199 and an intra-day low of Rs180 recording volumes of over 3mn shares on BSE.
Shares of Satyam Computer gained by 1% to Rs45 after the company announced its partnership with Pentaho Corporation, a leading open source business intelligence product company. The scrip touched an intra-day high
After witnessing a huge recovery on Wednesday, markets players would await for the IIP and inflation data to be released. Global cues would yet again play important role in dictating trend atleast in the opening trades.