Think like a man of action, act like a man of thought.
Looks like the bulls have tasted blood. Despite weak global markets our market staged a remarkable turnaround. The market breadth continues to be strong as “momentum trading” seems to be in vogue again. In another healthy sign, trading volume and turnover too have picked up. In fact, the broader indices outperformed the frontline rivals by a wide margin. Some argue the gains are operator-driven.
We see the momentum continuing though for a few more days till it faces a big hurdle. This could be in the form of bad earnings or guidance, unfavourable outcome in the Lok Sabha polls or fresh bad news from the global markets.
As far as today goes, the outlook is positive with most Asian markets up smartly this morning. US stocks broke a two-day fall on the back of a merger in the housing sector and speculation of a bailout for life insurers. Keep an eye on the weekly inflation numbers as well as February’s IIP data. Given the extended weekend, there could be some cooling later on.
Meanwhile, the Federal Reserve has cut its GDP forecast for the US economy for this year. Warren Buffett's Berkshire Hathaway has lost its AA rating. The Bank of Korea has decided to keep interest rates steady for another month. Japan's core machine orders surprisingly rose in February.
The UK economy shrank 1.5% in the first quarter, as the recession increasingly resembled the one that started in 1979 when Margaret Thatcher took power, the National Institute of Economic and Social Research said.
Ireland’s top AAA credit rating was lowered one level by Fitch Ratings, the second reduction in two weeks, after global financial turmoil fueled a surge in borrowing costs and swelled the budget deficit.
Australia’s jobless rate jumped by the most since the nation’s economy was last in a recession in 1991, stoking speculation the central bank will be forced to extend a record round of interest-rate cuts.
FIIs were net buyers in the cash segment on Wednesday at Rs5.73bn while the local institutions were net sellers at Rs3.78bn. In the F&O segment, the foreign funds were net buyers at Rs1.5bn. On Monday, FIIs were net buyers at Rs1.72bn in the cash segment. Mutual Funds were net sellers at Rs2.23bn on the same day.
Mastek will announce its results today. The result season will accelerate from next week. IT titan Infosys will come out with its results and guidance on April 15.
US stocks rallied on Wednesday at the end of a volatile session as a housing sector merger and more optimism about the recovery overshadowed sinking bank shares and the Fed's dour economic forecast. Investors also seemed to take in stride Alcoa's glum start to what is expected to be a dismal quarterly results reporting period.
The Dow Jones Industrial Average gained 47 points, or 0.6%. The S&P 500 index rose 9 points, or 1.2%. The Nasdaq Composite index advanced 29 points, or 1.9%.
US stocks had slipped on Monday and Tuesday following a four-week advance that sent the Dow and S&P 500 spiking more than 20% off 12-year lows. But after the brief retreat, investors managed to recharge the advance on Wednesday.
Stocks briefly cut gains after the release of the minutes from the Federal Reserve policy meeting last month, when central bank policymakers opted to keep interest rates at levels near zero. The central bank forecast a delay in the economic recovery until 2010, instead of the second half of this year. The bankers also thought the unemployment rate would rise more steeply into 2010.
Pulte Homes is buying Centex in a $3.1 billion deal - including debt - that creates the nation's largest homebuilder. The deal gave a boost to a number of other companies in the sector, including Lennar and Hovnanian Enterprises.
The insurance sector got a lift from a published report that said Treasury will let certain insurers receive aid from its Troubled Asset Relief Program (TARP). Gainers included Hartford Financial, Genworth Financial and Lincoln National.
Alcoa reported a first-quarter loss of 59 cents per share after the close Tuesday, wider than the loss of 56 cents per share analysts were expecting. The aluminum maker earned 44 cents a year earlier. Revenue fell to $4.1 billion from $7.375 billion a year ago, versus forecasts for a bigger drop to $4.08 billion. Alcoa is typically the first Dow component and major company to report results each quarter. Shares gained 3.5% on Wednesday.
Bed Bath & Beyond reported weaker quarterly earnings that beat forecasts on lower revenue that met estimates. Shares jumped over 24%.
The rally was set back following reports that regulators are recommending restrictions on all short-selling, not just on financial shares, as had previously been thought. The stock market got a boost last month on talk that the Securities and Exchange Commission (SEC) would reinstate the uptick rule - that limits short selling - on financial shares. Critics have said that the absence of the rule has exacerbated the selloff in bank stocks.
In the day's economic news, February wholesale inventories fell 1.5% versus forecasts for a drop of 0.7%. Inventories fell 0.7% in the previous month.
Treasury prices rallied, lowering the yield on the benchmark 10-year note to 2.88% from 2.91% on Tuesday. Treasury prices and yields move in opposite directions.
In currency trading, the dollar fell versus the euro and the yen.
US light crude oil for May delivery settled up 23 cents at $49.38 a barrel on the New York Mercantile Exchange. Prices slipped in the morning, but turned around after the government's weekly energy report showed crude supplies increased less than expected.
COMEX gold for June delivery rose $3.40 to settle at $885.90 an ounce.
Sales report from US retailers are due on Thursday morning. Sales improved in February after four straight months of declines, but investors will be looking to see if the consumer is continuing to hang in despite the recession.
The government will release the February trade balance and the weekly jobless claims report before the start of trading, along with the March report on import and export prices.
Thursday is also Passover, although many celebrations begin the night before. Financial markets are open on Thursday, but trading volume is expected to be light ahead of Good Friday, when all markets are closed.
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.