Anyone who thinks there is safety in numbers hasn’t looked at the stock market pages.
Today we expect a flat to slightly higher start. Asian markets are mostly in the green. US stocks managed to overcome a grim jobs report. Volatility will persist. Immediate support is placed at around 4700. Below that support may kick in at 4640-4650. Resistance is expected around 4850-4900. Overall, near-term trading range is seen between 4500-5000.
The UPA is making renewed noises about disinvestment, financial sector and fiscal reforms, but whether it has the courage to execute them is questionable.
The quarterly numbers haven’t inspired as much confidence as one would have expected them to. Investment led growth is yet to materialise. Credit growth remains subdued. Inflation has started inching higher. Interest rates have bottomed out.
The bulls may have escaped a big scare but the danger is still lurking. The threat of a fresh correction still looms given the uncertainty over the shape of recovery. A measured ‘exit’ from the emergency stimulus measures is likely over the next few months. The market could again get withdrawal symptoms when the ‘exit’ begins.
FIIs were net buyers in the cash segment on Friday at Rs5.87bn on a provisional basis. The local funds were net buyers of Rs2.37bn, according to figures published on the NSE's web site. In the F&O segment, the foreign funds were net buyers at Rs14.72bn. On Thursday, the foreign funds were net buyers of Rs2.67bn in the cash segment. FIIs' net investments in Indian stocks this year is above $14bn. Mutual Funds were net buyers in the cash segment at Rs343mn on Thursday.
US stocks ended with modest gains on Friday after a volatile session, as most market players chose to overlook a government report showing the unemployment rate jumping to a 26-year high. Analyst upgrades of General Electric Co. (GE), Macy’s and Amazon.com helped spur optimism that the world's largest economy is recovering.
The Dow Jones Industrial Average added 17 points, or 0.2%, to close at 10,023.43. The S&P 500 gained 3 points or 0.3%, to end at 1,069.30 and the Nasdaq Composite index rose 7 points, or 0.3%, to finish at 2,112.44.
US stocks had gained on Thursday, with the Dow reclaiming 10,000 after a series of better-than-expected economic reports. But trading was very choppy on Friday, with stocks slumping at the open and then fluctuating for most of the session, before closing higher.
All three major US benchmarks finished higher for the week, recovering most of what was lost in a two-week selloff. For the week, the Dow was up 3.2%, while the Nasdaq rose 3.3% and the S&P 500 added 3.2%.
Though the Dow has closed above 10,000 several times this fall, it has not finished a full week of trading above that level since the period ending Oct. 3, 2009.
US stocks, as represented by the broad S&P 500 index, had lost 5.6% through the week ended Nov. 30. Prior to that selloff, the S&P 500 had rallied 63% off the March bottom.
US companies cut 190,000 jobs from their payrolls in October, after cutting 219,000 in the previous month, according to a Labor Department report. That was worse than the 175,000 economists. The unemployment rate, generated by a separate survey, rose to a 26-year high of 10.2% from 9.8% in September. Economists thought the rate would rise to 9.9%.
While the unemployment rate jump was surprising, the number of non-farm payrolls cut suggest that the pace of layoffs is slowing. Also, the number of non-farm jobs lost in August and September was revised down. American companies cut 91,000 fewer jobs in August and September than originally reported.
Dow component GE surged 6.2% after analysts at both Bernstein and Oppenheimer upgraded the stock to "outperform," according to reports. The GE-owned business television network CNBC reported that its parent is near a deal to sell its 80% stake in NBC Universal to Comcast. Comcast shares were up 2.8%.
Amazon.com climbed after Bernstein upgraded it to "outperform" from "market perform," and also lifted its 12-month target price on the stock.
AIG reported its second straight quarterly profit after seven quarters of losses. Results were better than expected, but the company's main insurance businesses posted weaker revenue, sending shares tumbling by almost 10% Friday. AIG stock had rallied on Thursday ahead of the results.
Starbucks posted weaker quarterly results that beat expectations in a report released late on Thursday. The coffee retailer also boosted its outlook for 2010 profit, after having cut costs and shuttered hundreds of stores in the last year. Shares gained 7.2%.
Fannie Mae reported an almost US$19 billion quarterly loss on bad loans. The biggest US mortgage lender also said that it would need more help from the Treasury. Shares fell 7.1%.
The dollar fell against the euro on speculation that the Federal Reserve will keep borrowing costs near zero into next year after the US unemployment rate exceeded 10 percent for the first time since 1983. The dollar fell versus the yen.
US light crude oil for December delivery fell US$2.19 to US$77.43 a barrel on the New York Mercantile Exchange, a decline of more than 3%.
COMEX gold for December delivery climbed US$6.40 to settle at US$1,095.70 an ounce after hitting an all-time high of US$1101.90 during the session.
Treasury prices rose, lowering the yield on the 10-year note to 3.51% from 3.52% on Thursday.
European shares finished the week on an upbeat note, overcoming weak US jobs data to close slightly higher. The pan-European Dow Jones Stoxx 600 index rose 0.2% to close at 241.06. On the week, the Stoxx 600 added 1.7%. The index recovered after temporarily losing ground early in the afternoon.
The UK's FTSE 100 index rose 0.3% to settle at 5,142.72, while the German DAX index finished nearly flat at 5,488.25. The French CAC-40 index posted a virtually flat finish, slipping 1.44 points to close at 3,707.29.
After a solid bounce back on Wednesday, the Indian markets managed to extend gains to second straight trading session. The upswing was seen despite weak cues from the Asian and the European markets. The BSE Sensex regained the 16,000 mark led by the Metals, Realty and the Power stock. Even the Mid-Cap and the Small-Cap stocks were in demand. Technically, the 4,720 levels which acted as a strong resistance for the Nifty in the past failed to act as a resistance.
In the US, The Federal Reserve on Wednesday indicated yet again that it is no hurry to raise interest rates, saying that the US economy remains weak even though the worst recession in decades appears to be winding down. The American central bank reiterated its long-standing stance to keep interest rates exceptionally low for an extended period because it expects only a weak recovery.
The BSE Sensex gained 151 points at 16,063 after touching a high of 16,092 and a low of 15,564. The index opened at 16,926 against the previous close of 16,912. The NSE Nifty advanced 54 points to shut shop at 4,765.
In Asia, the Nikkei in Japan was down 1.3%, while Australia's S&P/ASX ended lower by 0.7% at 4,508. Shanghai SE Composite gained 0.5% and Hang Seng index in Hong Kong fell 0.6%.
In Europe, stocks were in the negative terrain. The FTSE in the UK was down 0.7%, The DAX in Germany was down 0.5% and the CAC 40 index in France was down 0.6%.
Coming back to India, among the BSE sectoral indices, the Metal index was the top gainer, adding 3%, followed by the Realty index that was down 2.5% and the BSE Power index was down 2.5%.
The BSE Mid-Cap index gained 2% and the BSE Small-Cap index was up 2%.
Among the 30-components of Sensex, 23 stocks ended in the red and 7 ended in the positive terrain. Reliance Infra, RCom, Hindalco, Bharti and Tata Steel were among the major gainers.
On the other hand, among the major losers were SBI, ITC, ACC, Infosys and TCS.
Outside the frontline indices, the big gainers in the broader market were Spicetele, IFCI, RCF, Hind Copper and Mundra Port. On the other hand, losers included India Cement, Container Corp, Madras Cement and Power Fin.
Shares of Suzlon surged for the first time in 11 days. After sliding over 34% in the past 10 days, shares of Suzlon shot up by over 13% to end at Rs62.5 on the back bargain hunting witnessed at lower levels.
According to a release on the Bombay stock exchange, Suzlon, the constructor of large wind parks has pledged 1.79% equity shares with Indiabulls Financial Services Ltd.
The stock opened at Rs55.5 and made an intra-day high of Rs63 and a low of Rs55. Total traded volumes stood at 20.9mn shares.
The stock hit 52-week high of Rs145.85 on June 5, 2009 and 52-week low of Rs33.05 on March 12, 2009.
Shares of Maytas Infra were locked at 5% upper circuit at Rs149.45 after the company secured the Pune-Sholapur road contract worth Rs7.9bn from IL&FS Transportation Networks Limited (ITNL). ITNL was awarded the work of 4 laning of Pune-Sholapur section of NH-9 from km. 144.40 to km. 249.00 (104.60 kms) in the state of Maharashtra on a DBFOT (Design, Build, Finance, Operate & Transfer) basis by National Highways Authority of India (NHAI). This project is to be completed in a period of 20 month.
Shares of IFCI surged by over 14% to Rs49.95 after media reports stated that the government has hired a consultant to advise it on future of the company. The consultant will advise the government on its role in IFCI.
Reports also stated that IFCI could be merged with another state-owned financial institution
The stock opened at Rs44 and made an intra-day high of Rs50 and a low of Rs43.5. Total traded volumes stood at 20.4mn shares.
Shares of Aban Offshore erased early losses and ended higher by 4% to Rs1244. The stock slipped sharply from day’s high after media reports stated that the company’s US$200mn QIP may be delayed as the promoters are not willing to dilute their stake at the current market price.
The company needs to pay US$410mn debt by December 2009. Reports also added that the promoters are also weighing other option to raise fund, would also consider selling rigs.
Gvk Power & Infrastructure announced that the Board of directors approved the acquisition of 40.6mn shares being 12% of paid up equity share capital of Bangalore International Airport Limited (BIAL) at a total cost of Rs.4.84bn from Flughafen Zuerich AG through GVK Airport Developers Pvt. Ltd.
The stock ended lower by 2% to Rs47.25, it opened at Rs48 and made an intra-day high of Rs48.8 and a low of Rs45.4. Total traded volumes stood at 5.4mn shares.
Shares of RCF shot up by over 12% to Rs65.9 after reports stated that the company plans to foray in to cement distribution. The company is aggressively negotiating with seven cement manufacturers to enhance the portfolio of its dealers, the company’s Chairman and MD, Mr U. S. Jha was quoted as saying.
RCF posted a net profit of Rs561.2mn for the quarter ended September 30, 2009 as compared to Rs843.7mn for the quarter ended September 30, 2008. Total Income has decreased from Rs26.25bn for the quarter ended September 30, 2008 to Rs18.03bn for the quarter ended September 30, 2009.