Rains not so kind!

Earth is here so kind, that just tickle her with a hoe and she laughs with a harvest.

The earth has nothing much to laugh about, with the monsoon refusing to pour down in abundance. It’s just another Monday morning as we expect a weak opening for our markets. Concerns about drought and its adverse fallout on the economic recovery will weigh on the sentiment. Food prices, which are already soaring, could gain further due to shortfall in farm output. Whether the Centre will announce fresh freebies and goodies remains to be seen amid an already precarious fiscal situation.

After Germany and France, government data shows that Japan too pulled out of the recession in the April-June quarter. However, most Asian markets are down 1-2%. Wall Street and Europe too ended down on Friday.

Technically speaking, the Nifty is likely to remain in a broad range of 4300-4700. We are in for a major tug-of-war among the bulls and the bears in the near term.

Investors are looking for clearer and concrete signs of an economic recovery. A 10-15% correction should not surprise anyone. The fear of missing out on another round of rally could arrest any major sell-off. On the whole, the market is likely to be sideways and uncertain. Volatility is a given and one should also keep an eye on traded volume, aside from of course the fund flows.

FIIs were net sellers at Rs1.26bn in the cash segment on Friday on a provisional basis while the local funds pumped in Rs4.44bn, according to figures published on the NSE's web site. In the F&O segment, the foreign funds were net buyers at Rs837.8mn.

US stocks slipped on Friday but managed to claw their way back a bit by the close, after a weaker-than-expected consumer sentiment report raised worries about the strength of any economic recovery.

The Dow Jones Industrial Average lost 77 points, or 0.8%, to 9,321.40. The S&P 500 index fell 8 points, or 0.9%, to 1,004.09. The Nasdaq Composite index lost 24 points, or 1.2%, to 1,985.52.

The decline was broad based, but a few sectors recovered from the day's lows. Some 24 of the Dow's 30 components fell.

US stocks started off on a weak note, as investors shrugged off positive reports on consumer inflation and factory production. But the selloff gathered momentum following the release of the consumer sentiment index. By the close, stocks had trimmed some of those losses.

The University of Michigan's consumer sentiment index dipped to 63.2 in August from 66 in late July. Economists thought it would rise to 69. The state of US consumers remains a worldwide concern, notwithstanding recent signs that the recession is winding down.

The report shows that American consumers are still not confident enough to resume their spending spree with lower incomes and erosion in wealth. This is going to be a cause for worry for a while before there is a substantial improvement in this critical part of the US economy.

Friday's losses came after the key US indices had made new highs for the year. Stocks ended lower for the week after a four-week advance, as a more optimistic view from the Federal Reserve could not offset weaker retail sales, and a disappointing but consumer sentiment report.

Between hitting a bottom on March 9 and Thursday's close, the S&P 500 rose 50%.

In the day's other economic data, industrial production rose 0.5% in July after falling 0.4% in the previous month. It was the first rise in nine months and could indicate that manufacturing is bottoming. Economists had forecast a gain of 0.4%. Capacity utilization rose to 68.5% from 68.1% in June. Economists had predicted a rise to 68.3%.

The Consumer Price Index (CPI), a measure of consumer inflation, was unchanged in July, as expected. CPI rose 0.7% in June. The so-called core CPI, which strips out volatile food and energy prices, rose 0.1%, as expected. Core CPI rose 0.2% in June.

Colonial BancGroup may have found a buyer for part or all of its assets in BB&T Corp., according to reports. Late on Thursday, a judge ruled in favor of Bank of America in a suit looking to bar Colonial, which is on the verge of collapse, from transferring or liquidating $1 billion in assets.

Shares of Colonial BancGroup, a Southern regional bank, slumped 12% before being halted. BB&T shares gained 9.4%. BofA shares rose 2.3%.

Abercrombie & Fitch reported a fiscal second-quarter loss versus a year-ago profit due to weak sales, higher costs and more markdowns. The loss was steeper than expected. The teen clothing retailer also reported weaker revenue that topped estimates. Shares gained 3.5% Friday.

JC Penney reported a smaller-than-expected quarterly loss, but also issued a current-year forecast that is lower than expectations. Shares fell 6.1%.

Market breadth was negative. Losers surpassed winners by seven to three on the New York Stock Exchange and by three to one on the Nasdaq.

Treasury prices rallied, lowering the yield on the benchmark 10-year note to 3.56% from 3.60% on Thursday. The government auctioned $75 billion in debt this week as part of its efforts to reduce the deficit and fuel its recovery efforts.

US light crude oil for September delivery fell $3.01 to settle at $67.51 a barrel on the New York Mercantile Exchange.

COMEX gold for December delivery fell $7.80 to settle at $948.70 an ounce.

In currency trading, the dollar gained versus the euro and rose against the Japanese yen.

Economic reports are due this week on housing, unemployment and manufacturing. A handful of retailers are due to report results, including rivals Lowe's and Home Depot and also Target. Computer maker Hewlett-Packard is also set to release results. Both Home Depot and Hewlett Packard are Dow components.

With 91% of the S&P 500 results having been released, second-quarter profits are expected to have fallen 28% versus a year ago, according to the latest figures from earnings tracker Thomson Reuters. Reports have largely been better than expected.

But results have been driven by cost-cutting, and many companies have reported lower revenue. Looking out, the third quarter is expected to show continued weakness, with Thomson estimates showing a decline of around 20% versus the previous year.

European shares closed lower on Friday, with automakers like Volkswagen pacing the decline. The pan-European Dow Jones Stoxx 600 index shed 0.8% to 228.67. Germany's DAX index was down 1.7% to 5,309.11, while the French CAC-40 index dropped 0.8% to 3,495.27 and the UK's FTSE 100 index lost 0.9% to 4,713.97.

The BSE Sensex slipped 107 points or 0.7% at 15,412 after touching a high of 15,535 and a low of 15,367. The index opened at 15,530 against the previous close of 15,518. The NSE Nifty slipped by 25 points to shut shop at 4,580

In Asia, the Nikkei in Japan gained by 0.8% at 10,597 while Australia's S&P/ASX gained 0.6% at 4,461. The Hang Seng index in Hong Kong gained 0.2% at 20,893. Shanghai index in China slipped 3% at 3,046.

In Europe, stocks were trading in the green. The FTSE in the UK was up 0.2%. The DAX in Germany was up 0.2% and the CAC 40 index in France was up 0.3%.

Coming back to India, among the BSE sectoral indices, the Realty index was the top loser, losing 2%, followed by the FMCG index that was down 1.3%. The BSE Teck index down 1.3% and the BSE Auto index was down 1.2%.

Among the major gainers were, BSE Oil & Gas index up 1.5% and BSE Consumer Durables index up 0.9%

The BSE Mid-Cap index slipped by 0.3% and the BSE Small-Cap index edged higher by 0.3%.

Within the Sensex, the major losers were JP Associates, HUL, ACC, RCOM, NTPC, HDFC and Maruti. Among the major gainers were, ONGC, Reliance Infra and Reliance Industries.

Outside the frontline indices, the big losers in the broader market were Balrampur Chini, Renuka Sugar, HCL Tech, Akcruti, PFC and Gujarat NRE. On the other hand, gainers included United Phosphorous, Jet Airways, Gujarat Petronet, Bhushan Steel and EKC.

The top gainers: The top gainers in the Sensex were Ranbaxy Labs (up 13.8%), Tata Motors (up 12.7%), DLF (up 7.7%), ONGC (up 7.1%) and Hindalco (up 6.9%).

The Top Losers: The top losers in the Sensex were Hindustan Unilever (down 4.7%), ACC (down 4.5%), Ambuja Cements (down 4.2%), Grasim Industries (down 3.2%) and NTPC (down 3%).

The BSE IT Index (up 1.5%): The top gainers in the IT sector were Sasken Communication (up 20.8%), Patni Computer (up 13.4%), Oracle Financial (up 3.9%), TCS (up 2%) and Wipro (up 2.3%).

Mphasis shot up by over 10% during the week. The company signed definitive agreement to acquire AIG Systems Solutions Ltd; part of American International Group Inc. AIGSS is an India-based provider of information technology services and solutions to AIG companies worldwide.

HCL Tech surged over 10% during the week. CRISIL assigned an 'AA+ /stable' rating to the Rs5bn Non-convertible Debentures programme of HCL Technologies.

Financial Tech lost 5.2% during the week.

The BSE Consumer Index: The top gainers in consumer durables space were Su-Raj Diamonds (up 7.8%), Titan (up 4.9%), Samtel Color (up 2.3%) and Whirlpool (up 2%).

Blue Star was the top loser in the consumer durables index during the week. The stock fell 4.4%