All journeys have secret destinations of which the traveler is unaware.
While the Indian market enjoyed an extended weekend, the global markets haven’t traveled much ahead. We expect a soft opening with uncertainty accompanied by volatility in the short term. Some more cooling is not ruled out. So, be careful of what you buy or trade. Overall, it appears as though the bulls have run out of steam and reasons to keep lifting the market higher.
India Inc’s report card is out, and though profits have improved, the real demand-led growth is still elusive. Most of the rebound in earnings is due to lower operating costs and stimulus measures. The road ahead will be tough to ride on for India Inc., as the RBI and the Government unwind the extraordinary stimulus steps.
Globally too, the situation is similar. Earnings growth has returned but largely due to government stimulus. Though authorities, both here and abroad will be cautious in reversing the stimulus, it remains to be seen how corporates, households and markets behave sans the stimulus.
Meanwhile, the fire at IOC depot in Jaipur is still showing no signs of cooling off. This may affect IOC’s bottomline in Q3.
FIIs were net buyers in the cash segment on Friday at Rs5.76bn on a provisional basis. The local funds were net buyers of Rs5.92bn, according to figures published on the NSE's web site. In the F&O segment, the foreign funds were net buyers at Rs20.70bn.
US stocks closed higher on Monday, led by the blue chips after a volatile day that saw the Dow swing in a 180-point range.
The Dow Jones Industrial Average rose 77 points, or 0.8%, to 9,789.44. The Dow had gained as much as 145 points and lost as much as 34 points earlier. The S&P 500 gained 7 points, or 0.7%, at 1,042.88 and the Nasdaq Composite index rose 4 points, or 0.2%, to 2,049.20.
After the close, Stanley Works said that it would buy Black & Decker in a $4.5 billion all-stock deal.
US stocks rallied in the morning after a key manufacturing index spiked to its highest level in three and a-half years in October. An upbeat reading on pending home sales and Ford Motor's strong earnings report also added to the positive sentiment after last week's selloff.
But the morning rally turned sour in the afternoon due to weakness in financial, technology and transportation shares. By the last hour, short-term investors used the selling as an opportunity to jump back in and scoop up a variety of shares.
Ford delivered its first quarterly profit in more than a year, helped by the government's Cash for Clunkers program. The company said that it earned nearly $1 billion, or 29 cents a share. The automaker was expected to post a loss of 12 cents a share. Ford shares rose 8.3%.
A survey by the Institute for Supply Management showed nationwide manufacturing activity jumped to 55.7 in October, from 53 the previous month. Economists had predicted a more modest gain to 54. Numbers above 50 signal growth, while figures below 50 suggest contraction.
The Commerce Department said construction spending rose unexpectedly by 0.8%. Economists were anticipating a 0.5% decline.
Meanwhile, the National Association of Realtors reported that the number of signed sales contracts to buy homes rose in September for the eighth straight month. Pending home sales rose much more than expected, by 6.1%, in September. Analysts were looking for a 1.2% increase.
Small business lender CIT filed for bankruptcy protection Sunday as part of a reorganization plan that has the support of most of the company's debt holders. It was the fifth-largest in US history.
CIT said it has already worked out a reorganization plan with bondholders that it expects to speed the Chapter 11 process and reduce CIT's debt by $10 billion. The stock plunged on the news, losing 65% in active trading.
The dollar gained versus the yen and the euro.
US light crude oil for December delivery gained $1.13 to settle at $78.13 a barrel on the New York Mercantile Exchange after tumbling in the previous session.
COMEX gold for December delivery rose $19.10 to settle at $1,059.50 an ounce.
Treasury prices slipped, raising the yield on the 10-year note to 3.41% from 3.38% on Friday.
European shares traded firmly higher as investors welcomed a marked improvement in conditions for US manufacturers in October, although Royal Bank of Scotland came under selling pressure at the onset of a new month.
Stocks started on an unsteady note following sharp losses on Friday and loss overall for October but the pan-European Dow Jones Stoxx 600 index rose 0.4% to 237.82 after the Institute for Supply Management reported that the ISM index jumped to 55.7% in October from 52.6% in September. This was well above forecasts.
The French CAC-40 index rose 1.1% to 3,645.95, the UK's FTSE 100 index rose 0.9% to 5,091.362 and the German DAX index rose 0.6% to 5,446.70.
The world suddenly seemed worried this week with bulls resorting to sell-off across the board globally. Some respite came in for the global markets on Thursday after US GDP showed some expansion. All that it could do for the local market was to give it a good start after which the main indices came tumbling into the red. Less enthusiastic earnings coupled with Hawkish stand unveiled in the RBI’s mid-year policy review added to the sharp fall on Dalal Street. Finally, the NSE Nifty closed the week lower by 5.7% and BSE benchmark Sensex was down by 5.4%.
The BSE Sensex hit an intra-week high of 16,939 and low of 15,805 while, NSE Nifty intra-week high of 5,033 and low of 4,687.
On Friday, the BSE Sensex fell 156 points to end at 15,896 after touching a high of 16,360 and a low of 15,805. The index opened at 16,135 against the previous close of 16,052. The NSE Nifty was down 39 points to shut shop at 4,711.
In Asia, the Nikkei in Japan was up 1.4%, while Australia's S&P/ASX ended higher by 1.5% at 4,643. Shanghai SE Composite was down 2.3% and Hang Seng index in Hong Kong closed higher by 2.2%.
In Europe, stocks were flat. The FTSE in the UK was up 0.3%, The DAX in Germany was down 0.2% and the CAC 40 index in France was flat.
Coming back to India, among the BSE sectoral indices, the Oil & Gas index was the top loser, shedding 3%, followed by the Teck index that was down 2% and the BSE Power index was down 1.9%. Even, the BSE Mid-Cap index fell 1% and the BSE Small-Cap index was down 1.1%.
Among the major gainers were, BSE Auto index gained 0.5% and Banking index added 0.5%.
Among the 30-components of Sensex, 19 stocks ended in the red and 11 ended in the positive terrain. RCom, Bharti Airtel, Reliance Infra, Tata Power, Reliance Industries and ONGC were among the major losers.
On the other hand, among the major gainers were Sterlite Industries, ICICI Bank, Grasim and Tata Motors.
Outside the frontline indices, the big losers in the broader market were Bank of India, Renuka Sugar, Idea, Aban Offshore and GE Shipping. On the other hand, gainers included United Spirits, Tulip Tele, Rolta, Ashok Leyland and Voltas.