The only thrill worthwhile is the one that comes from making something out of yourself.
Risk aversion seems to be suddenly on the rise, putting the bears on the defensive for the first time in more than a year. So strong is the momentum that all bad news is surprisingly getting discounted. The thrill of living on the edge need not be part of your portfolio though.
The current upsurge stems mainly from optimism about the latest efforts to unfreeze the US credit markets. A few encouraging economic reports from across the globe have added fuel to the fire.
The positive effects of the G20 announcement to commit US$1 trillion to revive global economy are already visible, with Asian markets smartly up. We expect the Indian market to open firm as well. But, a truncated trading week coupled with the anxiety over earnings and elections might just halt the bulls.
In a nutshell, the market will continue to take direction from the global trend. Technically, the near-term outlook looks promising. If the Nifty stays above 3150 for a few more days, the next key target is 3250. The 200 DMA stands at 3450.
FIIs were net buyers in the cash segment on Thursday at Rs6.92bn while the local institutions were net buyers at Rs2.55bn. In the F&O segment, the foreign funds were net buyers at Rs18.84bn. On Wednesday, the foreign funds were net buyers at Rs2.35mn in the cash segment. Mutual Funds were net buyers of Rs161mn on the same day.
Nitco Tiles will launch a new tile category for the first time in India - announcement later in the day. HCL Tech could gain amid reports that it has bagged a five-year order from Microsoft worth US$170mn.
Piramal Healthcare will be in action after a business daily reported that its talks with Sanofi Aventis for a stake sale have fallen through due to differences over valuation.
Cement companies are likely to attract attention amid a fresh war of words with the Government over the recent price increases. Oswal Chemicals is another stock to keep an eye on as it is reportedly looking for coal mines in Indonesia.
US stocks ended higher on Friday after a choppy session, as investors largely ignored the March jobs report and chose to focus on positives like the US$1 trillion booster from the Group of 20 (G20) nations.
The market extended the recent rally to a fourth consecutive week after Federal Reserve Chairman Ben S. Bernanke said that programs to revive lending were working and Research In Motions (RIM) announced strong results.
The Dow Jones Industrial Average gained almost 40 points, or 0.5%, to 8,017.59. The Standard & Poor's index added 8 points or 1%, to 842.50 and the Nasdaq Composite index rose 19 points, or 1.2%, to 1,621.87. The Dow and the S&P 500 closed at their highest levels since Feb. 9.
US shares have staged a strong comeback since hitting 12-year lows on March 9. All three major indices have risen by at least 20%. For the four-week period ended on Friday, the Dow is up 21.5%, making it the blue-chip indicator's best four-week run since May 1933, when it gained 31%.
This is the longest winning streak for the S&P 500 index since the bear market began in October 2007. The S&P 500 has surged by 25% since sinking to a 12- year low of 676.53 on March 9. The S&P 500 gained 3.3% on the week while the Dow added 3.1%.
Meanwhile, the VIX, which tracks the cost of using options to protect against losses in the S&P 500, decreased 5.6% to close below 40 for the first time since January.
Employment is a lagging economic indicator and is usually the last to recover. That is perhaps the reason why Wall Street investors didn't react strongly to the day's big economic report, which showed unemployment rate climbing to a 25-year high.
US companies cut 663,000 jobs from their payrolls in March, after cutting a revised 651,000 in the previous month. Economists had expected 650,000 job cuts. The unemployment rate, generated by a separate survey, rose to 8.5% from 8.1% in February, in line with estimates.
In other economic news, the Institute for Supply Management released its services sector index for March. The index fell to 40.8 from 41.6 in the previous month. Economists thought it would rise to 42.
Benchmark indexes turned higher around noon after Bernanke, speaking in Charlotte, North Carolina, welcomed a decline in home-loan rates in the wake of the Fed’s purchases of mortgage securities and said that the drop may improve the housing market.
He also discussed the Fed's balance sheet and reiterated that the central bank would use every available tool to help the world's largest economy.
In London, leaders of the world's 20 largest economies (G20) pledged over US$1 trillion to boost the International Monetary Fund (IMF) and agreed to better monitor the global financial system.
Following the April 2 summit, G20 policy makers proposed a regulatory blueprint that places stricter limits on hedge funds and other financiers, while pledging to triple the resources of the IMF and to give China and other developing economies a greater say in the way the world economy is run.
IBM and Sun Microsystems are in the late stages of a deal whereby the IT services giant will acquire its smaller rival for US$9.55 per share, according to published reports. That is about US$1 less than the figure previously floating around. IBM shares gained 1.4% and Sun shares rose 3.4%.
Research in Motion (RIM) reported higher quarterly earnings that beat estimates late on Thursday. The BlackBerry maker also forecast first-quarter profit that are above analysts' current estimates. The stock jumped 20.8% and was among the Nasdaq's most-actively traded.
Treasury prices tumbled, raising the yield on the benchmark 10-year note to 2.89% from 2.77% on Thursday.
Lending rates mostly dropped. The 3-month Libor rate dipped to 1.16% from 1.17% on Thursday. The overnight Libor rate fell to 0.27% from 0.29% on Thursday. Libor is a bank-to-bank lending rate.
In currency trading, the dollar fell versus the euro and gained against the yen.
US light crude oil for May delivery fell 13 cents to settle at US$52.51 a barrel on the New York Mercantile Exchange.
COMEX gold for June delivery fell US$11.60 to settle at US$897.30 an ounce.
Indian markets extended its winning streak to third straight trading session with the NSE Nifty index ending above the 3200 mark for the first time since October 21, 2008. The BSE benchmark Sensex also ended above the 10,300 level.
The rally was led by Realty, Metals, Oil & Gas, Capital Goods and the Banking stocks. Also the second rung stocks participated in the upswing. However, the FMCG counters were under some pressure. Finally, the BSE Sensex advanced 193 points to close at 9,901 and the NSE Nifty was up 39 points at 3,060.
Among the 30-components of Sensex, 29 stocks ended in positive terrain and only Hindustan Unilever ended in the red. Among the top gainers were DLF, JP Associates, Tata Motors, RCom, ONGC and Hindalco.
Reliance Industries commenced production of gas from the Dhirubhai 1 and 3 discoveries of the KG-D6 block in the KG Basin, located off the East Coast of India, in the Bay of Bengal.
The stock advanced by 6% to Rs1674 after hitting an intra-day high of Rs1678 and a low of Rs1602 recording volumes of over 1.7mn shares on BSE.
Shares of Maruti Suzuki erased early gains and slipped lower by 1.7% to end at Rs780 recording volumes of over 0.2mn shares on BSE. The stock rose to hit an intra-day high of Rs832 as the company’s March sales rose 22% to 85,669 units as compared to 70,296 units in the same month last year.
The company’s local sales rose 14.6% to 73,855 units in the month of March and exports rose 101% to 11,814 units as compared to 5,875 units in the same month previous year.
Shares of Tata Motors rallied by over 13% to Rs202 after hitting an intra-day high of Rs207 and a low of Rs183 and recorded volumes of over 3.8mn shares on BSE.
The company’s sales of commercial vehicles in March 2009 in the domestic market were 29,006 nos., 24% higher than that in February 2009 but 19% lower than 35,993 vehicles sold in March 2008. M&HCV sales at 12,333 nos. reflect a 40% growth over February 2009, but 40% lower than March 2008. LCV sales at 16,673 nos. are 9% higher than March 2008.
The bulls are sweating gains but show no signs of tiring as yet. The problem is no one knows when the direction will change. Ride the upside and use it to lighten positions gradually. In the coming truncated week, unless the swings are wild on either side, retail investors may give the markets a near miss. Any sharp spurt could be used to book profits.