Choppy day, plan it well!

A goal without a plan is just a wish.

After Monday Mayhem came Tuesday Turnaround, now Wednesday what? Don’t get perturbed by such high volatility. Remember, we have covered a long distance from early March. Some consolidation after a reasonably protracted advance is a given. Brace for wild swings as most global economies will witness a slow recovery. The same holds true for India, especially now that the monsoon has failed to live up to expectations. Interest rates and inflation could also play spoilsport going ahead. Overall though, India should do reasonably well in terms of GDP growth.

Given the mixed global cues, particularly from Asian markets, we expect a cautious opening and a choppy day. Most world equity markets recently touched multi-month highs before softening a little. The catalyst for that sharp rally was growing optimism that we are out of the woods and are on the road to recovery. IMF’s top economist Olivier Blanchard also endorses this view, but warns that the recovery won't be typical. The short point is one should not expect very high growth rates and a swift recovery.

Shares bought on August 18, should not be sold on August 19, as trades done on both these days will be settled together on August 21. There is no settlement on August 19, due to the ‘Parsi New Year’. Also, please note that the pay-in schedule has changed for stocks sold on August 18, and August 19, to 10.00 a.m. and 2.00 p.m. respectively.

FIIs were net sellers at Rs7.2bn in the cash segment on Tuesday on a provisional basis while the local funds pumped in Rs4.67bn, according to figures published on the NSE's web site. In the F&O segment, the foreign funds were net buyers at Rs8.5bn. On Monday, the foreign funds were net sellers at Rs9.74bn in the cash segment. Mutual Funds too were net sellers of Rs6.82bn in the cash segment.

US stocks rebounded from Monday's big losses, spurred by Home Depot's encouraging results and forecast. A few bright spots in the day's housing market report also prompted investors to resume their buying spree after a two-session retreat.

The Dow Jones Industrial Average added 82 points, or 0.9%, to 9,217.94. The S&P 500 index rose 10 points, or 1%, to 989.67. The Nasdaq Composite index gained 25 points, or 1.3%, to 1,955.92.

Market breadth was positive and trading volume was light.

All the three major US stock indices lost over 3% in two sessions on worries that circumspect American consumers could hurt an already fragile recovery. But Tuesday investors welcomed better news from the retail sector.

Volatility is bound to take place as we try to figure out the timing and the intensity of the economic rebound. A weaker-than-expected consumer sentiment report on Friday and Lowe's disappointing profit report on Monday had sparked a sell-off, which followed a roughly five-month advance.

The S&P 500 is 46% higher since bottoming March 9. Year-to-date, it is just up 9.6% as of Tuesday's close.

Home Depot reported earnings of 66 cents per share, versus 77 cents a year ago, as the recession cut into its business. But results were better than expected and the home improvement retailer boosted its full-year earnings outlook. Shares of the Dow component gained 3%.

Target reported earnings of 79 cents per share versus 82 cents a year earlier, topping expectations, due to cost cutting and reduced inventories. But revenue and same-store sales slipped, as consumers remained cautious. Shares gained 7.6%.

Housing starts and building permits both slipped in July, according to a Commerce Department report. The report surprised Wall Street economists who were looking for an improvement.

Housing starts fell to a 581,000 annualized rate in July from a revised 587,000 in June. Economists had forecast a reading of 599,000.

Building permits, which indicate builder confidence, fell to a 560,000 annualized rate in July from a revised 570,000 annualized rate in June. Economists thought it would rise to a 576,000 annualized rate.

On the positive side, the report showed that single-family housing construction rose 1.7% in July, advancing for the fifth straight month and at the fastest pace since October.

A separate report showed that inflation at the wholesale level remains in check. The Producer Price Index (PPI) fell 0.9% in July after rising 1.8% in June. Economists had predicted a fall to 0.3%. The core PPI, which strips out volatile food and energy prices, fell 0.1% in July versus forecasts for a rise of 0.1%.

General Motors said it is boosting production in the second half of the year and bringing 1,350 of its North American employees back to work as a result of increased demand from the government's Cash for Clunkers program.

Separately, GM said it made a deal to sell its money-losing Saab to Swedish luxury sports car maker Koenigsegg.

Huron Consulting Group rallied 37.6% in unusually active Nasdaq trading after the business consultant reported higher quarterly revenue and earnings that topped estimates.

American Axle & Manufacturing Holdings surged 117% in unusually active New York Stock Exchange trading after saying it will get up to $210 million in help from former parent GM. The auto parts manufacturer is trying to restructure its debt outside of bankruptcy court.

Treasury prices slipped, raising the yield on the benchmark 10-year note to 3.51% from 3.47% on Monday.

Crude oil rose for the first time in three days, surging the most this month, as the dollar dropped against the euro, bolstering the appeal of commodities. US light crude oil for September delivery rose $2.44 to settle at $69.19 a barrel on the New York Mercantile Exchange.

COMEX gold for December delivery rose $3.40 to settle at $939.20 an ounce.

The dollar fell against the euro for the first time in three days following the release of an upbeat German investor confidence report. The pound increased from near a one-month low versus the dollar after a report showed the UK inflation rate was higher in July than economists forecast. The dollar and yen declined against major counterparts, including the South African rand as stocks and commodities advanced, reducing demand for relative safety.

After the close, Hewlett-Packard reported lower quarterly sales and earnings that topped analysts estimates. Wednesday brings no market-moving quarterly results or economic news. The weekly oil inventories report from the Energy Information Administration is due in the mid-morning.

European shares rallied after the ZEW Center for European Economic Research’s index of German investor and analyst expectations rose to 56.1 in August from 39.5 in July, exceeding the median forecast for a reading of 45.

The pan-European Dow Jones Stoxx 600 index rose 1.1% to 226.61. On Monday it closed down 2%.

UK's FTSE 100 index rose 0.9% to 4,685.78, while Germany's DAX index climbed 0.9% to 5,250.74 and the French CAC-40 index advanced 0.9% to 3,450.69.

After a heartbreaking start to the week and dropping over 600 points on Monday, Indian markets staged a smart come back with the BSE Sensex managing to close above the psychological 15,000 mark. The index was seen taking support at the 50 day moving average for the second straight day.

The smart upswing was led by the Capital Goods, Realty, Metal and Power stocks, even the Mid-Cap and the Small-Cap stocks participated bounce back. Sentiments further got a lift as cues from the Asian and the European markets also were positive.

The BSE Sensex gained 250 points or 1.7% at 15,035 after touching a high of 15,134 and a low of 14,740. The index opened at 14,746 against the previous close of 15,785. The NSE Nifty ended higher by 71 points to shut shop at 4,459.

In Asia, the Nikkei in Japan ended higher by 0.2% at 10,284 while Australia's S&P/ASX ended flat at 4,381. The Hang Seng index in Hong Kong gained 0.8% at 20,306. Shanghai index in China gained by 1.4% at 2,910.

In Europe, stocks were trading in green. The FTSE in the UK was up 0.8%. The DAX in Germany was up 0.5% and the CAC 40 index in France was up 0.6%.

Coming back to India, among the BSE sectoral indices, the Capital Goods index was the top gainer, gaining 3.6%, followed by the Realty index that was up 2.3%. The BSE Metal index up 2.3% and the BSE Power index was up 2.1%.

The BSE Mid-Cap index gained 2% and the BSE Small-Cap index gained by 2%.

Within the Sensex, the major gainers were Hindalco, JP Associates, L&T, HUL, Tata Steel, HDFC and DLF. Among the major losers were Infosys, Grasim, TCS and Sun Pharma.

Outside the frontline indices, the big gainers in the broader market were Godrej Industries, Rolta, Mphasis, Bharat Forge, IFCI and Renuka Sugar. On the other hand, losers included Glaxo, REI Agro, Marico, Cadila and HCL Tech.

Shares of L&T surged by 4.6% to Rs1477 after reports stated that the company plans to initiate its third round of major business restructuring in 2010 and has appointed consultants McKinsey and Bain to guide on the same. The stock opened at Rs1411 and made an intra-day high of Rs1485 and a low of Rs1390. Total traded volumes stood at 0.5mn shares.

Shares of HDFC gained by 3% to Rs2321 after the company raised Rs43bn through a QIP issue of non-convertible debentures with attached warrants that entitle the holder to buy its shares at ~Rs3,000 per share within three years. The stock opened at Rs2260 and made an intra-day high of Rs2342 and a low of Rs2210. Total traded volumes stood at 0.1mn shares.

Shares of Renuka Sugars advanced by 6.5% to Rs183 after the company secured FMC approval for acquiring 5% in NCDEX for Rs365mn. The company would acquire the stake from Intercontinental Exchange and Goldman Sachs Investments.

The stock opened at Rs171 and made an intra-day high of Rs184 and a low of Rs171. Total traded volumes stood at 2mn shares.

Shares of Essar Oil gained by 4% to Rs135 after reports stated that the company was bidding to acquire Royal Dutch Shell Plc refineries in the U.K. and Germany. The stock opened at Rs129 and made an intra-day high of Rs136 and a low of Rs128. Total traded volumes stood at 1.3mn shares.