This isn't good or bad. It's just the way of things. Nothing stays the same.
Bulls will hope for a bounce back at regular intervals during the interim rough patch being seen on the bourses. At the same time bears will continue to scout for money making opportunities. One should remain on guard as volatility could escalate ahead of Thursday’s F&O expiry. Don’t get hurt while the bull-bear tussle is on.
The Nifty is likely to oscillate between 5100 and 4900 depending on the newsflow and fund flows. With the key indices up smartly from March lows, the upside may be limited from here on. There are some concerns on the pace of the rally amid a somewhat murky outlook but no need to panic as such.
Globally, risk appetite may start easing a bit as we approach the year end. Demand for defensive plays may shoot up. Dollar’s movement will continue to determine the near-term fate of global equities. Economic data will of course continue to have a bearing on sentiment. The overseas Christmas holiday season will also be keenly followed.
For India, the big event will be Q2 GDP data, which will be released on Nov. 30. This will be followed by quarterly results and RBI's policy review in January and Budget in February.
Reliance Industries Ltd. (RIL) would be in the spotlight today after making a bid for LyondellBasell Industries.
Essar Oil Ltd. may also rise after a report that Royal Dutch Shell Plc is acquiring a 10% stake in the company as part of a deal to sell three refineries to the Indian company.
Sugar stocks will remain in focus after the Government dumped a controversial clause in the proposed sugar ordinance. Also, the Prime Minister has left for the much-hyped US visit over the weekend. There may be a few announcements that could be of interest to the stock market.
FIIs were net sellers in the cash segment on Friday at Rs4.64bn on a provisional basis. The local funds were net buyers of Rs184.6mn, according to figures published on the NSE's web site. In the F&O segment, the foreign funds were net sellers at Rs2.98bn. FIIs were net sellers of Rs3.34bn on Thursday. Mutual Funds were net sellers of Rs1.77bn in the cash segment on the same day. FIIs' net investments in Indian stocks this year have crossed $15bn.
Lots of key economic reports are due in the US this week, including data on home sales, housing prices, a revised reading on GDP, a monthly read on consumer confidence, durable goods order, personal income and consumer spending. PC maker HP will declare its results after the closing bell on Monday.
US financial markets will be shut on Thursday for the Thanksgiving holiday, and trading will end early on Friday. With many traders likely to take next week off, the traded volume of shares will be small, which could exaggerate swings in the market.
ECB chief Jean-Claude Trichet on Friday tightened the rules for the collateral it accepts against loans as it tries to restore the proper functioning of markets and prepares the ground to unwind emergency liquidity measures.
“Not all our liquidity measures will be needed to the same extent as in the past,” Trichet said at a conference in Frankfurt. “Any non-standard measure whose continuation would pose a threat to the achievement of price stability must be undone promptly and unequivocally.”
US stocks closed down for a third day running on Friday, as investors remained wary about valuations after this year's stupendous rally from the bear market lows. The drop in risk appetite led to some strength in the dollar and bonds.
The energy sector led the market lower due to a pullback in commodity prices. The technology sector was also weak, hurt by a bigger-than-expected drop in profits at the personal-computer maker Dell.
The Dow Jones Industrial Average ended down 14.28 points, or 0.1%, at 10,318.16, up 0.5% for the week but off 1.1% in the past three days of the week. This fall is the Dow's longest since a four-day pullback from Sept. 30 to Oct. 2.
The technology-laden Nasdaq Composite Index dipped 0.5% to 2,146.04, down 1% on the week. It was hurt in part on Friday by a 10% decline in Dell.
The S&P 500 index fell 0.3% to 1,091.38, led by a 0.9% decline in its energy sector. The S&P categories posting gains on Friday were utilities, consumer staples, and health care, all sectors traditionally used as defensive bets. Friday's decline pushed the S&P into the red for the week, off 0.2%.
Less than 7 billion shares changed hands on U.S. exchanges, the fourth-slowest trading session of the year.
The S&P 500 rose as much as 64% from a 12-year low in March, closing at a 13-month high on Nov. 17. After bottoming at 12-year lows in March, stocks have been on a near-continuous rally fueled by signs of economic stabilisation.
The dollar rallied against the euro and most other foreign currencies after the ECB unveiled its first step towards reversing the unprecedented stimulus measures. The bank said in a surprise announcement that it will tighten the standards under which it accepts newly issued asset-backed securities as collateral from banks.
European stocks slipped as ECB President Jean-Claude Trichet said that the central bank will remove liquidity in order to ensure the bank doesn’t fuel inflation.
“Not all our liquidity measures will be needed to the same extent as in the past,” Trichet said at a conference in Frankfurt. “Any non-standard measure whose continuation would pose a threat to the achievement of price stability must be undone promptly and unequivocally.”
Trichet has already signaled the ECB is unlikely to renew its offer of 12-month loans to banks after the third installment in December.
The Dollar Index, which gauges the dollar against a basket of six major currencies, rose 0.4% to 75.607 and climbed as high as 75.879. It rose three out of the last four days after touching a 15-month low on Nov. 16. The US currency gained against all 16 major currencies except the yen. The yen rose against all 16.
The dollar's gains weighed on commodities, which are traded globally in terms of the US currency. Oil futures fell for a second straight day, off 74 cents to end at US$76.72 per barrel, up 0.5% on the week.
But gold futures managed to post a sixth straight record, up US$5 at US$1,146.40 per ounce, up 2.7% on the week at the Comex division of the New York Mercantile Exchange.
Prices for US Treasurys were mixed. The yield on the benchmark 10-year Treasury note, which moves inversely to its price, fell to 3.36% from 3.50% late on Thursday. The yield on the 3-month Treasury bill, which is seen as a temporary shelter from market volatility, stood at 0.015%.
D.R. Horton, the second-largest US homebuilder, said that its quarterly loss narrowed to US$231.9mn, or 73 cents a share, in the fourth quarter ended Sept. 30. Shares fell 15%. Analysts were expecting a loss of 30 cents per share.
After the closing bell on Thursday, Dell reported a sharp drop in quarterly profit that fell short of Wall Street's estimates. The stock tumbled 10%.
Also on Thursday, analysts at Bank of America Merrill Lynch downgraded the semiconductor industry. That came one day after two key software companies issued cautious profit outlooks.
But, retailer Gap said that its quarterly profit surged 25%.
A government report showed that more US states suffered rising unemployment rates, though fewer reported joblessness above the national average in October.
Wall Street started the week on a high, closing at 13-month highs on Monday and Tuesday. A softer dollar and bets that interest rates will remain low for much longer sent the S&P 500 above the key 1,100 level early in the week.
But the undertone turned more cautious on Wednesday after government data showed a surprise drop in new home construction and a couple of software makers announced bearish profit forecast.
Housing and technology woes continued to plague the market on Thursday as well after a report showed that nearly 10% of all mortgage loans were delinquent in the third quarter and analysts at Bank of America Merrill Lynch downgraded the semiconductor industry.
On Friday, technology shares remained under pressure after Dell reported weak third-quarter results late on Thursday. Homebuilder stocks fell after D.R. Horton posted a larger-than-expected quarterly loss and said that conditions in the industry remain challenging.
European indices ended in the red on Friday, as banking stocks came under pressure after the ECB suggested that the central bank will remove extraordinary liquidity measures that have helped commercial lenders during the crisis. Auto shares also put in a weak performance.
The Stoxx 600 index lost 0.8% to 243.62, down for the fourth straight session and bringing weekly losses to 1.7%. Friday's move pared year-to-date gains for the Stoxx 600 index to around 23%.
Germany's DAX index shed 0.7% to 5,663.15, while the French CAC-40 index declined 0.8% at 3,729.36 and the UK's FTSE 100 index dropped 0.3% to 5,251.41.
After rallying for three straight days, bulls seem to have lost some steam as the BSE Sensex ended below the 17,000 mark, however, the NSE Nifty managed to hold on the 5050 mark. Weak cues from the Asian and the European markets coupled with selling pressure in the Oil & Gas and the Banking stocks dragged the Sensex to end below the 17,000 levels.
The BSE Sensex slipped 52 points to end at 16,998 after touching a high of 17,098 and a low of 16,958. The index opened at 17,050 against the previous close of 17,050. The NSE Nifty ended flat at 5,054.
In Asia, the Nikkei in Japan was down 0.6%, while Australia's S&P/ASX ended marginally higher by 0.2% at 4,739. Shanghai SE Composite was up 0.5% and Hang Seng index in Hong Kong fell 0.3%.
In Europe, stocks were trading in the green. The DAX in Germany was up 0.6% and the CAC 40 index in France was up 0.5%. The FTSE in the UK was up 0.2%.
Coming back to India, among the BSE sectoral indices, the Oil & Gas index was the top loser, shedding 1%, followed by the Banking index that was down 0.91% and the BSE Capita Goods index was down 0.7%.
Major gainers were BSE Metals index up 1.2% and BSE FMCG index up 0.6%.
The BSE Mid-Cap index ended flat while the BSE Small-Cap index was up by 0.7%.
Among the 30-components of Sensex, 18 stocks ended in the red and 12 ended in the positive terrain. Reliance Infra, L&T, Reliance Industries, ICICI Bank and Grasim were among the top losers. On the other hand, among the major gainers were Tata Motors, Tata Steel, ITC, Infosys and JP Associates.
Outside the frontline indices, the big losers in the broader market were Mphasis,Exide Ind, Spice Tele, Jain Irrigation and Fin Tech. On the other hand, gainers included Pantaloon Retail, GE Shipping, GTL Infra and Sintex Ind.
Shares of SAIL advanced by 0.5% to end at Rs187. Reports stated that Jharkhand government has agreed to renew the company’s lease for the Buddhaburu mine, having reserves of 810mn tons.
The company also announced that it was planning to spend Rs600bn for expansion in next 3 years and the company is also reportedly planning to jointly develop a limestone project at Arki in Himachal Pradesh with a 3MTPA capacity.
BHEL announced that it formed a joint venture with Madhya Pradesh Power Generation for 1600MW power plant. Shares of BHEL ended flat at Rs2275. The stock opened at Rs2273 and made an intra-day high of Rs2283 and a low of Rs2255. Total traded volumes stood at 0.11mn shares.
Union Bank of India plans to raise US$500mn by selling bonds by March; the Chairman M.V. Nair was quoted as saying. The bank plans to use the proceeds to fund its overseas operations
The stock ended at Rs270 adding 1.7%, it opened at Rs266 and made an intra-day high of Rs271 and a low of Rs262. Total traded volumes stood at 0.11mn shares.
Wockhardt announced that it launched anti-hypertensive drug Nicardipine injections in USA. The stock erased early gains and ended lower by 1.5% at Rs180 after it opened at Rs183. It made an intra-day high of Rs187 and a low of Rs179. Total traded volumes stood at 0.14mn shares.
Shares of Redington surged by over 3% to end at Rs316 after 2.2% of its equity, or ~1.7mn shares were traded in a single block on the BSE. The deal was transacted at an average price of Rs310 per share on the BSE.
The stock opened at Rs307 and made an intra-day high of Rs324 and a low of Rs306. Total traded volumes stood at 1.9mn shares.
Lloyd Electric & Engineering announced that through Janka Engineering s.r.o., (a wholly owned subsidiary company) having its registered seat at Prague, Czench Republic has signed a purchase agreement for the acquisition of assets (no liabilities) with Trademarks and 'JANKA' brand of Janka Radotin a.s., a leading czech based manufacturer of diversified Air Handling Product portfolio well positioned in the Czech market for a total consideration of approx. Euro 3.66mn, which is subject to the adjustment on the closing date.
The stock rose over 2% to end at Rs55.5. The stock opened at Rs54.6 and made an intra-day high of Rs56.85 and a low of Rs53.60. Total traded volumes stood at 0.18mn shares.