Success is sweet and sweeter if long delayed and gotten through many struggles and defeats.
After over a year of struggles and defeats, the bulls have reached a comfortable level to kiss 16K on the Sensex. The market is set to open higher and the next resistance for the Nifty is 4850 level.
Risk appetite seems to be improving by leaps and bounds. Consider this: the prices of the most traded risky European and US loans have touched 12-month highs. Stocks and commodities are soaring. Emerging market currencies are firming up while the dollar and yen have taken a beating. Investors are also deserting government bonds. Upbeat reports on manufacturing and housing sent the S&P 500 past 1,000 for the first time since November. New US vehicle sales have hit an 11-month high in July, mainly due to government incentives.
Back home too, there are a number of new "green shoots" that could propel the key indices to new 2009 highs. Earnings have been good. Auto, steel and cement sales continue to climb. Manufacturing output remains promising though exports are still in a limbo. Fiscal deficit and its attendant offshoots like high interest rates and spike in inflation could pose challenges. But, the bulls are in no mood to contemplate such ills.
There are concerns on valuations as the market may have risen too far, too fast. Some correction is imminent after a sharp surge. So, one should not get carried away by seeing stock indices breach new milestones. The continuation of a rally is going to be dependent on leading economic indicators showing strength and a commensurate reflection in corporate earnings.
Japan's Nomura Holdings has downgraded developing-nation stocks to "underweight" from "overweight" in its recommended portfolio because valuations look "stretched." The rally in emerging-market stocks has pushed valuations to 17.8 times companies’ reported earnings for the past 12 months, the highest level since the MSCI index peaked in October 2007. That exceeds the ratio of 17.2 for the S&P 500.
FIIs were net buyers of Rs3.47bn in the cash segment on Monday on a provisional basis while the local funds too pumped in Rs610.1mn, according to figures published on the NSE's web site. In the F&O segment, the foreign funds were net buyers at Rs4.17bn. On Friday, the foreign funds were net buyers of Rs7.87bn in the cash segment. With this, their net purchases of Indian stocks have crossed $7.4bn.
US stocks got off to a strong start in August after better-than-expected readings on manufacturing and car sales added to bets that the economy is starting to stabilize.
The Dow Jones Industrial Average added 115 points, or 1.3%, to 9,286.56, ending at a fresh nine-month high. The S&P 500 index added 15 points, or 1.5%, to 1,002.63, ending above the 1,000 level for the first time since last November. The Nasdaq Composite index gained 30 points, or 1.5%, to 2,008.61, closing above 2,000 for the first time since last November.
US stocks had the best July in two decades after a spate of better-than-expected quarterly results reassured investors that the world's largest economy is getting closer to stabilizing. Last week, the first-quarter GDP report showed the economy shrank at a 1% rate, versus forecasts for a bigger contraction.
In July, the Dow gained 8.6%, its best July since 1989 and its best month overall since October 2002. The S&P 500 gained 7.4%, its best July since 1988 and its best month since April. The Nasdaq rose 7.8% in the month, its best July since 1997 and the best month overall since this past April.
The Institute for Supply Management's (ISM) manufacturing index rose to 48.9 in July from 44.8 in June. That was better than the 46.5 economists were expecting, but still short of the 50 level that indicates expansion in the sector.
Construction spending rose 0.3% in June versus forecasts for a decline of 0.5%. Spending fell 0.9% in May.
Ford Motor reported a gain in July auto sales and other major automakers cut losses, as the government's "Cash for Clunkers" program helped stimulate sales of cars and trucks. Ford said July sales rose 2% versus a year ago. It is the first U.S. automaker to report a rise in monthly sales since November 2007.
GM, Toyota, Chrysler and Honda all said sales fell versus a year ago, but rose versus June levels, thanks to "Cash for Clunkers". The popular program gives consumers a rebate check for as much as $4,500 if they exchange their gas guzzler vehicles and buy a fuel-efficient one. But the program could run out of cash by mid-week if the Senate doesn't approve the additional $2 billion in funding the House of Representatives approved last week.
With two-thirds of the S&P 500 having reported results, profits are on track to have fallen 29.5% from a year ago, according to the latest Thomson Reuters numbers. However, that's an improvement from a month ago, when profits were expected to fall more than 35%.
Profit reports have been topping expectations across the board, with roughly 74% of companies exceeding forecasts, versus the long-term average of 61% of companies.
Google CEO Eric Schmidt has resigned from the Apple board, as the Internet search leader is developing more and more products that compete with Apple's core businesses. Google gained 2%, while Apple gained 1.9%.
Bank of America has agreed to pay $33 million to settle charges that it mislead investors about Merrill Lynch's plans to pay bonuses to its executives. Bank of America completed its purchase of Merrill Lynch on Jan. 1.
Separately, BofA said Sallie Krawcheck, Citigroup's former head of global wealth management, will run BofA's global wealth and investment management operations.
US light crude oil for September delivery rose $2.13 to settle at $71.58 a barrel on the New York Mercantile Exchange.
COMEX gold for December delivery rose $2.90 to settle at $958.70 an ounce.
Treasury prices tumbled as investors pulled money out of the safe-haven commodity. The slump raised the yield on the benchmark 10-year note to 3.63% from 3.48% late on Friday.
In currency trading, the dollar fell versus the euro and rose against the Japanese yen.
On Tuesday morning, the Commerce Department releases its June readings on personal income and spending. Also Tuesday morning, the National Association of Realtors releases the pending home sales index.
European shares jumped, led by banks, after reports that UBS may avoid a fine from the US and as HSBC surprised investors by beating forecasts with its earnings. The pan-European Dow Jones Stoxx 600 index climbed 1.6% to 228.43, a level not seen since Nov. 4.
Germany's DAX index rose 1.8% to 5,426.85 and the French CAC-40 index was up 1.5% to 3,477.80. The UK's FTSE 100 index advanced 1.1% to 4,682.46, a level not seen since Oct. 3.
Indian markets ended at 52-week high on Monday with the NSE Nifty index managing to close above the 4,700 mark for the first time since June 6, 2008. Better than expected sales numbers by the auto companies coupled with firm cues from the international equity markets lifted the sentiments on Dalal Street.
The Auto, Realty, Metals and the Power stocks were among the major gainers. Even the Mid-Cap and the Small-Cap stocks participated in the upswing. On the other hand, the Consumer Durables and the FMCG stocks were offloaded.
The BSE Sensex advanced 254 points or 1.6% at 15,924 after touching a high of 15,963 and a low of 15,608. The index opened at 15,695 against the previous close of 15,670. The NSE Nifty advanced 75 points or 1.6% to shut shop at 4,711.
In Asia, the Nikkei in Japan ended flat at 10,352 while Australia's S&P/ASX ended higher by 0.5% at 4,263. The Hang Seng index in Hong Kong gained by 1.1% to end at 20,807. Shanghai index in China gained 1.5% to end at 3,462.
In Europe, stocks were trading higher. The FTSE in the UK was up 1.6%. The DAX gained 1.6% and the CAC 40 was up 1.5%.
Coming back to India, among the BSE sectoral indices, the Auto index was the top gainer, gaining 4.6%, followed by the Realty index that was up 4.1%. The BSE Metal index up 3.4% and the BSE Power index was up 2.1%.
The BSE Mid-Cap index gained 2.3% and the BSE Small-Cap index ended higher by 1.7%.
Within the Sensex, the major gainers were Hindalco, M&M, RCom, BHEL, Tata Steel, Tata Power, JP Associates and Maruti. Among the major losers were HUL, ITC, HDFC Bank and HDFC.
Outside the frontline indices, the top gainers included Bharat Forge, Biocon, Aban, Jubilant, Praj Industries, Cummins India and Renuka Sugar.
Among the big loser in the broader market were Divi’s Lab, MTNL, IOC, Castrol India and Nestle.
Oil Minister Murli Deora said on Monday that the first priority was to allot KG-Basin gas to existing power plants. He also added that the proposed Dadri plant of RNRL would get gas when it was ready to start producing power. "The Dadri plant will get gas subject to availability", he added.
Shares of RNRL ended flat at Rs83.9. The stock opened at Rs84.5 and made an intra-day high of Rs85 and a low of Rs81.8. Total traded volumes stood at 9.7mn shares.
While, shares of Reliance Industries surged by 3% to Rs2014. The stock opened at Rs1960 and made an intra-day high of Rs2032 and a low of Rs1958. Total traded volumes stood at 0.8mn shares.
Shares of Hero Honda gained by 1% to Rs1621 after the company reported a jump of 30.39% in its sales at 3,66,808 units in July compared to the sales in the same month last year.
Hero Honda had reported a jump of 83.28% in its net profit at Rs5bn for the quarter ended June 30 on account of robust sales amidst softening of input costs.
The company sold 2,81,317 units in July last year. The net profit for the first quarter for the last fiscal was at Rs2.72bn.
Shares of Maruti Suzuki gained by 4% to Rs1469 after the company announced that it posted 33% yoy growth in car sales in July. The stock opened at Rs1425 and made an intra-day high of Rs1478 and a low of Rs1421. Total traded volumes stood at 0.17mn shares.
Shares of DLF gained by 2.4% to Rs405 after reports stated that the company plans to launch 16mn sq ft of residential space in the current fiscal. Reports also stated that Hedge fund DE Shaw may retain a partial stake in DLF Assets. The stock opened at Rs396 and made an intra-day high of Rs407 and a low of Rs385. Total traded volumes stood at 4.2mn shares.
Shares of Suzlon Energy declined by over 4% to Rs95.6 after reporting a loss in the first quarter. The loss in the Q1 was Rs4.53bn compared with a profit of Rs93mn a year earlier.
The stock opened at Rs94.4 and made an intra-day high of Rs97 and a low of Rs90. Total traded volumes stood at 20.1mn shares.
Shares of Financial Technologies gained by 5% to Rs1485 after reports stated that the company plans to divest 52% in the MCX-SX bourse by September-end. The stock opened at Rs1430 and made an intra-day high of Rs1495 and a low of Rs1421. Total traded volumes stood at 73,000 shares.
Shares of SAIL advanced by 2.4% to Rs179 after the company announced thatit registered 14% growth in steel production at 1.08mt in July over the year-ago period. The stock opened at Rs176 and made an intra-day high of Rs180 and a low of Rs174. Total traded volumes stood at 1.7mn shares.
Shares of Wanbury were locked at 20% upper circuit to Rs70.50 after the company reported net sales of Rs837.4mn for the quarter ended 30th June 2009, registering a growth of 25.6%, as compared to Rs666.6mn in the corresponding quarter of last fiscal.
Net Profit was Rs94.8mn, as compared to Rs14.3mn in the corresponding quarter of last fiscal, grown by 5.62 times.