The turning point in the process of growing up is when you discover the core of strength within you that survives all hurt.
With the six core industries clocking fastest growth rate in 10 months, the bulls will be emboldened to kiss the 15K mark, levels last visited in Sept ‘08. Positive trend in Asian markets will help the cause. While stocks may remain firm in the near term, one must stay guarded given the euphoric rally.
The summer has been phenomenal for the bulls, with growing signs that the worst of the global financial-cum-economic turmoil is behind us. The icing on the cake for India came with the UPA’s resounding win in the Lok Sabha polls. Macro-economic reports too have been heartening, though sliding exports remain cause for concern. Also, the recent improvements have been limited to select pockets. Much needs to be done in several other fronts.
So, it will be quite a task for the UPA to lift the GDP growth back to 9% from around 7% now. The public finances are in a mess, though the slowdown leaves less scope for fiscal prudence at least this year. Globally too, there could be fresh troubles.
NALCO will announce its results today.
US stocks gained on Tuesday, managing an advance at the end of a choppy session after a positive housing report and some improvement in auto sales gave investors some more optimism about the ongoing global recovery.
The Dow Jones Industrial Average added 19 points or 0.2%. The index briefly turned positive for the year for the first time since Jan. 7. The S&P 500 index added 2 points or 0.2%. The Nasdaq Composite index gained 8 points, or 0.4%.
US stocks had seesawed throughout the session, managing gains just after the release of the pending home sales report and then again through the close.
Pending home sales jumped 6.7% in April, and posted year-over-year increases in every region but the West, according to a National Association of Realtors. The report added to hopes that the housing market is starting to find its footing.
Stocks in the US and abroad jumped on Monday after upbeat reports on manufacturing, construction and consumer spending added to hopes that the pace of the worldwide recession is slowing. Such bets have helped lift the stock market over the past three months, after the Dow and S&P 500 slumped to more than 12-year lows.
JPMorgan Chase said late on Monday it plans to raise $5 billion toward the $25 billion it owes the government. American Express also said late on Monday that it will raise $500 million toward the $3.4 billion it owes. Morgan Stanley said on Tuesday that it plans to raise $2.2 billion.
The Federal Reserve is expected to announce next week which of the 19 banks that it stress tested are in good enough shape to pay back bailout funds. In order for banks to pay back the government, they must prove that they can raise money without depending on guarantees against losses provided by the Federal Deposit Insurance Corp. (FDIC).
In other financial news, Citigroup will withhold severance payments worth tens of millions of dollars to five former executives, according to a published report. Goldman Sachs raised over $1.9 billion after selling part of its stake in Industrial & Commercial Bank of China.
GM is selling its Hummer truck brand to Chinese industrial company Sichuan Tengzhong. The deal was announced one day after GM filed for bankruptcy protection, bringing an end to an era for the automaker.
Separately, GM said that May auto sales fell 29% from a year ago, versus forecasts for a drop of nearly 37%. The May performance was the automaker's best of the year.
Ford Motor said that May auto sales fell 24%, versus forecasts for a drop of 28.5%. The results were the best monthly performance for the company since last July.
Chrysler - which filed for bankruptcy April 30 - said sales dropped 47% from a year ago, versus forecasts for a slide of almost 54%. It was the automaker's best monthly performance of the year. The exception was Toyota Motor, whose sales slumped 40.7%, roughly in line with forecasts for a slide of 40.6%.
Treasury prices rose, lowering the yield on the benchmark 10-year note to 3.61% from 3.67% on Monday.
In currency trading, the dollar fell versus the euro and yen.
US light crude oil for July delivery fell 3 cents to settle at $68.55 a barrel on the New York Mercantile Exchange.
COMEX gold for August delivery rose $4.40 to settle at $984.40 an ounce.
European shares finished flat after a choppy session. The pan-European Dow Jones Stoxx 600 index ended virtually unchanged at 214.32. Earlier, the index briefly touched 214.94, a level not seen since November.
The UK's FTSE 100 index declined 0.7% to 4,477.02, while the French CAC-40 index finished flat at 3,378.04 and so did the German DAX 30 index at 5,144.06.
Bulls took a breather on Tuesday as the BSE Sensex gained marginally 34 points while the NSE Nifty ended almost flat. The Sensex came into striking distance of the 15k mark but was unable to hold on as profit booking at higher levels dragged the markets lower. However, markets recovered from its intra-day lows in the last hour of the session managing to end almost unchanged.
The Sensex gained 34 points or 0.2% to close at 14,875 after touching a high of 14,994 and a low of 14,608. The index had opened at 14,892 against the previous close of 14,840.
The NSE Nifty ended flat to shut shop at 4,525.
Among the BSE Sectoral indices BSE Consumer Durable index was the top gainer surging 3%, followed by the BSE Metal index up 2.7%, BSE Auto index up 1.1%, BSE Capital Goods index up 0.3% and BSE IT index up 0.2%.
Shares of Orbit Corporation gained by 8% to Rs199 after the company announced that it the board of directors will meet on June 03, 2009 to consider proposal for fund raising through QIP to QIB. The scrip touched an intra-day high of Rs201 and a low of Rs180 and recorded volumes of over 0.8mn shares on BSE.
Shares of TTML gained by 9% to Rs36 after reports stated that the company plans to offer services on the GSM platform. The scrip touched an intra-day high of Rs37 and a low of Rs32 and recorded volumes of over 5.3mn shares on BSE.
Shares of Voltas surged by over 5.5% to Rs124 after the company announced that it secured two orders worth Rs3bn for electro-mechanical projects for the new generation airports in India. The scrip touched an intra-day high of Rs128.40 and a low of Rs118 and recorded volumes of over 3mn shares on BSE.
Shares of SpiceJet rallied by over 8% to Rs25.4 after reports stated that the company plans to acquire a rival budget airline and to start international and regional operations. The scrip touched an intra-day high of Rs25.8 and a low of Rs23.5 and recorded volumes of over 10mn shares on BSE.
Shares of Essar Oil declined by over 4% to Rs167. ~30mn equity shares of the company changed hands at an average price of Rs174 on the BSE. The approximate deal size was Rs5.22bn.
There were media reports stating that Matterhorn Ventures was the likely seller in the Essar Oil deal.
Shares of Tata Motors gained by 3.5% to Rs349. The company’s sales declined 13% in May to 40,196 vehicles from a year earlier. Exports fell 47% to 1,804 units. The scrip touched an intra-day high of Rs355 and a low of Rs336 and recorded volumes of over 1.6mn shares on BSE.
After taking a pause on Tuesday, bulls would look to resume their quest towards the 15k levels. Conviction seems to return that the process of economic turnaround has already begun which is visible in the Auto and the cement monthly numbers.