Make your life a mission - not an intermission.
There are many screens to watch these days from the trading screen to the elections and of course the latest on what few would understand- swine flu. Before the market takes a big break, we are in for a volatile session as traders weigh their moves in the F&O segment today. The uncertainty surrounding Lok Sabha elections and anxiety over the banks’ stress test results in the US may keep a lid on gains. Nagging concerns over the swine flu outbreak and its impact on the tentative global recovery will keep the bulls in check.
The Indian stock market will be shut on Thursday and Friday for elections and Maharashtra Day, respectively. Most players would prefer to stay nimble to mitigate potential risks from any untoward development over the long weekend. The key indices are likely to open a tad higher given the modest gains in some Asian markets and flat finish on Wall Street. Some short-covering led advance if it happens is unlikely to go too far. Remain guarded as the relief rally may soon run out of gas, especially if there is no incremental good news.
Key Results Today: Alok Industries, Alstom Projects, Apollo Tyres, Aptech, Bank of India, Bharti Airtel, Canara Bank, CEAT, Dabur India, Dena Bank, Elder Pharma, Garware Offshore, GTL Infra, GVK Power, ICSA India, Ingersol Rand, JK Tyre, KS Oils, KEC International, MTNL, Moser Baer, Nagarjuna Fertilizers, Titan and Videocon Industries.
FIIs were net sellers in the cash segment on Tuesday at Rs2.56bn (provisional) while the local institutions pulled out Rs2.02bn. In the F&O segment, the foreign funds were net sellers at Rs5.98bn. On Monday, FIIs pumped in Rs18.4bn in the cash segment.
US stocks ended a volatile session in the red on Tuesday, as worries over the swine flu epidemic coupled with concerns about the health of the leading banks offset encouraging reports on consumer sentiment and house prices.
The Dow Jones Industrial Average lost 8.05 points, or 0.1%, to close at 8,016.95. The S&P 500 Index fell 2.35 points, or 0.3%, to end at 855.16, while the Nasdaq Composite index shed 5.6 points, or 0.3%, to shut shop at 1,673.81.
Bank of America and Citigroup slumped on a Wall Street Journal report that government stress tests may show the lenders need more cash to shore up balance sheets. Delta Air Lines slid on concern that swine flu will reduce travel. General Motors (GM) tumbled as bondholders said a plan to exchange $27 billion in debt for equity is unreasonable.
Benchmark US indexes fluctuated throughout the day as the decline in banks was offset by gains in consumer shares after the Conference Board’s confidence index climbed the most since November 2005.
This week, investors have been keeping an eye on the banks and the latest reports on the swine flu outbreak. The two biggest longer-term issues that remain unresolved are a bottom in the housing market and the potential need for more capital among the country's banks.
The April consumer confidence index rose to 39.2 from a revised 26.9 in the previous month. Economists thought it would improve to 29.7.
The S&P/Case Shiller 20-city home price index fell 18.6% in February from a year ago, extending the losing streak to 31 months. But it was the first time since October 2007 that the index didn't hit a record low in its year-over-year drop.
Concerns about the economic impact of the swine flu outbreak remained in place as health officials have confirmed at least 90 cases of the disease worldwide and 50 in the United States. Economists are concerned that should the outbreak become a large-scale pandemic, it would hurt the global economic recovery attempt.
The number of confirmed cases of swine flu in the US jumped to 64 as global health officials monitored New York City as a second possible epicenter for the international outbreak. As many as 152 people have died in Mexico with suspected swine flu. The virus has taken its biggest hold in four states in Mexico.
The UK, Israel, Canada, New Zealand and Spain have also confirmed cases. The World Health Organization (WHO) said it was watching New York to see whether the virus has become rooted in another country, a finding that would boost the agency’s pandemic alert system.
Bank of America and Citigroup will need to raise more capital, according to initial government "stress tests," the Wall Street Journal reported. Regulators reportedly told the banks that they need to boost their reserves to prepare for a potential worsening of the economy.
Results of Treasury's tests of the largest US banks aren't due until next week. Citi, saying it couldn't disclose test results, issued a statement assuring that its capital base is strong. Bank of America shares fell 8.6%, Citi dropped 6% and the KBW Bank sector index fell 3%.
Chrysler said it has made a deal with its creditors to reduce $7 billion in loans, inching it closer to resolving its financial crisis. Over the weekend, the automaker said it won key concessions from its union. The company also needs to hammer out a deal with Italian automaker Fiat ahead of the Thursday deadline to avoid bankruptcy.
Both Chrysler and GM have been getting by on billions in government aid. GM has until June 1 to cut debt and avoid bankruptcy. On Monday, the company announced a broad restructuring plan.
Pfizer reported lower quarterly earnings that topped expectations on lower revenue that missed expectations. The company saw sales of its blockbuster Lipitor lose out to cheaper generic versions. However, cost cutting helped limit any declines.
Bristol-Myers Squibb reported weaker earnings that topped estimates on higher revenue that missed estimates. The company was hurt by weaker sales of Erbitux, its colon cancer medicine.
IBM said that it will increase its quarterly dividend by 10% and will buy another $3 billion of its outstanding stock.
Treasury prices slipped, raising the yield on the benchmark 10-year note to 3.01% from 2.92% on Monday.
Lending rates were mixed. The 3-month Libor rate fell to 1.04% from 1.05% on Monday. The overnight Libor rate was unchanged at 0.21%. Libor is a bank-to-bank lending rate.
In currency trading, the dollar fell versus the euro and the yen.
US light crude oil for June delivery slipped 90 cents to settle at $49.24 a barrel on the New York Mercantile Exchange.
COMEX gold for June delivery fell $14.60 to settle at $893.60 an ounce.
European shares fell on Tuesday as bank stocks took a beating on capital concerns, while shares in travel and tourism firms were hit once again amid continued fears of an influenza pandemic. The pan-European Dow Jones Stoxx 600 index fell 1.5% to 193.57.
The UK's FTSE 100 index fell 1.7% to 4,096.40, while Germany's DAX 30 index lost 1.9% to 4,607.42 and the French CAC-40 index declined 1.7% to 3,051.02.
Indian markets ended with sharp losses on Tuesday on the back of a heavy sell off witnessed all over. Selling was not only seen in the India but also across Asia and Europe. The Nikkei and the Hang Seng index both slipped over 2% each. Stocks in Europe as well were in the red, the FTSE and the DAX index were down by over 2% each. The BSE Sensex plunged 370 points to close at 11,001 and the NSE Nifty fell by 108 points at 3,362.
All the 30-components of Sensex ended in negative terrain with DLF, Reliance Infra, Tata Steel, Sterlite, RCom, HDFC and ICICI Bank among the major laggards.
Among the BSE Sectoral indices BSE Realty index was the top loser, the index lost 5.7%. Among the other major losers were BSE Metal index (down 5.6%), BSE Bankex index (down 5%), BSE Capital Goods index (down 4.1%) and BSE Power index (down 3.7%)
Shares of Pfizer gained by a percent to Rs721 as reports stated that the company has emerged as the frontrunner to acquire RFCL’s animal health unit, Vetnex, in a deal estimated ~Rs2.5bn. The scrip touched an intra-day high of Rs750 and a low of Rs711 and recorded volumes of over 16,000 shares on BSE.
Shares of Wockhardt Pharma declined by 7% to Rs89. According to reports, lenders have sought more clarity on the extent and nature of its huge foreign exchange losses before initiating any restructuring of the company’s outstanding credit. The scrip touched an intra-day high of Rs97 and a low of Rs88 and recorded volumes of over 0.14mn shares on BSE.
Shares of Britannia Industries advanced by 1.5% to Rs1565 after hitting an intra-day high of Rs1580 and a low of Rs1520.
The stock gained after the company announced that it has entered into an agreement with M/s. Fonterra Brands (Mauritius Holding) Ltd, Mauritius, for acquiring the latter's 49% Equity and Preference shareholding in Britannia New Zealand Foods Pvt Ltd (BNZF), their Joint Venture Company engaged in Dairy business. This acquisition is subject to Reserve Bank of India approval.
With this acquisition, Britannia along with its wholly owned subsidiary will hold the entire Equity and Preference capital of BNZF.
Shares of Biocon edged lower by 0.4% to Rs145. The company posted a net profit of Rs248.80mn for the quarter ended March 31, 2009 as compared to Rs653mn for the quarter ended March 31, 2008.
Total Income increased from Rs2792.20mn for the quarter ended March 31, 2008 to Rs4865.60mn for the quarter ended March 31, 2009. The scrip has touched an intra-day high of Rs153 and a low of Rs136 and has recorded volumes of over 0.3mn shares on NSE.
Shares of GlaxoSmithKline advanced by 1% to Rs1178 after the company posted a net profit of Rs1432.7mn for the quarter ended March 31, 2009 as compared to Rs1212.7mn for the quarter ended March 31, 2008.
Total Income increased from Rs4342.5mn for the quarter ended March 31, 2008 to Rs4609.8mn for the quarter ended March 31, 2009. The scrip has touched an intra-day high of Rs1215 and a low of Rs1175 and has recorded volumes of over 4,000 shares on NSE.
After a sharp correction, markets may turn volatile on account of F&O expiry. All the possible good news is already in the price. And, we are only talking about tentative signs of improvement. Traders and investors would turn cautious as the week is yet again truncated.