A weak mind is like a microscope, which magnifies trifling things, but cannot receive great ones.
Thank God for big mercies! That’s what the bulls may have thought during the Republic Day holiday. The situation, however, does not seem to have improved. Today, we expect a weak start as global cues are indecisive. The SGX Nifty is showing a sharp fall. The F&O expiry and uncertainty all around will only add to the volatility.
Being brave is not among the bests strategies now. Wait for little clarity in direction before making taking large positions. Beyond the main indices, there remain a host of opportunities, especially in anticipation of better results.
The events to keep an eye on for the coming days include today’s Fed announcement, the RBI policy meeting on Friday and of course the spate of earnings.
Though the Nifty has managed to stay above 5000 in the face of the sudden worsening of sentiment, the bulls have been at the receiving end following the recent selloff. The Nifty could rebound from 4930-4950 levels and 5000 remains a critical level to watch. If the selling persists a bit more, the Nifty could fall as low as 4840. On the way up, resistance is expected to kick in at around 5120.
US stocks closed nearly flat on Tuesday on the back of a late-session selloff in the financial space. The US market had earlier rallied on Apple's record quarterly results and a stronger reading on consumer confidence.
The Dow Jones Industrial Average lost 2 points or less than 0.1%, at 10,194.29. The S&P 500 index shed 4 points, or 0.4%, to 1,092.17. The Nasdaq Composite slid 7 points, or 0.3%, to 2,203.73.
After fluctuating through the early morning, US stocks turned higher near midday, thanks to gains in financial and consumer shares. But the advance petered out by the end of the session. Financials led the retreat, with the KBW Bank index falling 2.2%.
Wall Street managed slim gains on Monday as fears about the bank sector eased, along with opposition to Federal Reserve chairman Ben S. Bernanke serving for a second term.
Investors are still recovering after last week's rout, in which the Dow, S&P and Nasdaq all plunged 5% in the last three sessions of the week. Although Apple provided investors with some optimism throughout the Tuesday's session, that was not enough to keep stocks higher.
The VIX - Wall Street's so-called fear gauge - touched a six-month high on Friday. It has dropped about 11% since late on Friday.
The selling in the broad stock market may not quite be over and the risk of another 5% to 7% correction in the short term remains.
The Fed policymakers began their two-day policy setting meeting on Tuesday amid ongoing questions about whether Bernanke's term will be renewed. The central bankers are widely expected to hold interest rates steady at historic lows near zero and to signal that they will continue to do so for the time being.
Global investors will examine the FOMC statement for hints about when the Fed may start to raise interest rates or withdraw some of the trillions of dollars of stimulus it had put into the economy over the last few years.
With his term set to expire on Jan. 31, questions remain about whether Fed chairman Bernanke has enough votes in the Senate to force a confirmation vote. However, those worries have lessened this week.
After the close of trading on Monday, Apple reported quarterly earnings and revenue that topped estimates, thanks to strong sales of iPhones and Macintosh computers. Quarterly revenue surged to a record $15.7 billion. The company is on track to debut its greatly-anticipated new tablet computer on Wednesday.
Travelers Companies, the US property-casualty insurer, reported higher quarterly earnings and revenue that beat estimates thanks to strong gains in underwriting and investment. Shares rose 2.7%.
Chemical maker DuPont reported a profit versus a year-ago loss and a rise in revenue, thanks to improving market trends and cost cutting. Results topped analysts' estimates. DuPont also boosted its 2010 earnings forecast due in part to an improving economy. Shares of the Dow component were little changed.
Consumer products maker Johnson & Johnson reported weaker earnings and stronger revenue versus a year ago, both of which topped forecasts. The company also forecast a full-year 2010 profit of $4.85 to $4.95 per share versus analysts' expectations for a profit of $4.94 per share, sending the stock a little lower in afternoon trading.
Verizon Communications reported a fourth-quarter loss due to layoff charges. Excluding items, the profit was in line with estimates. The telecom also reported higher revenue that missed estimates. Verizon said it added 2.2 million mobile subscribers, topping forecasts for adds of 1.5 million.
Looking forward, the company said that it is seeing a slower-than-expected economic recovery and that it expects to cut 6% of its workforce this year, or around 13,000 jobs. Verizon shares lost 1.7%.
The Consumer Confidence index, from the Conference Board, rose to 55.9 in January from 53.6 in the previous month, versus forecasts for a reading of 53.5.
A key report that showed prices fell for the first time in seven months. The S&P/Case-Shiller 20-city home price index fell 0.2% in November from October and fell 5.3% from a year ago, in a bigger-than-expected drop.
Global stocks were under pressure after Standard & Poor's (S&P) warned that it could cut its debt rating on Japan and China implemented some of the bank curbs that had been hinted at last week.
The dollar gained versus the euro and fell against the yen.
COMEX gold for February delivery rose $2.60 to settle at $1,098.30 an ounce. Gold closed at an all-time high of $1,218.30 an ounce last month.
US light crude oil for February delivery fell 55 cents to settle at $74.71 a barrel on the New York Mercantile Exchange.
Treasury prices rose, lowering the yield on the 10-year note to 3.60% from 3.61% late on Monday.
After the close, Yahoo reported a quarterly profit, reversing a year-ago loss, as the online advertising market showed some signs of life. The company also reported weaker quarterly revenue that topped estimates. Shares gained about 2.3% in after-hours trading.
Stocks in Europe closed higher, as better-than-expected earnings from Siemens and Novartis and optimism from US consumers offset concerns on Chinese loans restrictions and lackluster economic data out of the UK.
Having resided in negative territory for much of the day and having dropped the last four sessions, the pan-European Dow Jones Stoxx 600 index finished with a rise of 0.5% to 249.41. Health sector stocks led the advance.
The UK's FTSE 100 index rose 0.3% to 5,276.85, the German DAX index added 0.7% to 5,668.93 and the French CAC-40 index gained 0.7% to 3,807.04.
Indian markets ended in the red on Monday, extending losses for fifth straight trading session. After registering a huge fall on Friday accompanied with record breaking volumes, traders and investors continued to book profits and offload their positions as US President Obama’s proposal to put new limits on the size and trading practices of big banks continued to haunt equity markets across the globe.
Selling was seen in the rate sensitive stocks like the Auto, Banking and Realty. IT stocks also were under pressure. However, the FMCG and the Capital Goods stock were in demand helping the Nifty to hold on to the 5,000 mark.
Disappointing Q3 earnings was among the other major sentiment dampener. Possible overheating in China and monetary tightening by Beijing has also been causing a few jitters of late.
The BSE Sensex fell 79 points to end at 16,780 after touching a high of 16,877 and a low of 16,705. The Nifty fell 28 points to end at 5,008.
Equity markets in Asia ended in the red. The Nikkei in Japan was down 0.7%, while Australia's S&P/ASX ended lower by 0.7%. The Shanghai SE Composite ended lower by 1% and Hang Seng index in Hong Kong was down 0.6%.
In Europe, stocks were trading in the red. The DAX in Germany was down 0.4% and the CAC 40 index in France was flat. The FTSE in the UK was down 0.3.
Coming back to India, the BSE Realty index was the top loser, shedding 3%, followed by the Auto index that was down 2.1% and the BSE Metal index was down 1.5%. The BSE Mid-Cap index slipped 1.3% while BSE Small-Cap index was down 1%.
Among the gainers were BSE FMCG index up 1.1% and Capital Goods index up 0.5%.
Among the 30-components of Sensex 17 ended in the negative terrain and 13 ended in the green. M&M, JP Associates, DLF, Tata Steel, Sterlite and RCom ended in the red. Among the top gainers were, Bharti Airtel, HUL, ITC, L&T and Sun Pharma.
Outside the frontline indices, the big losers in the broader market were HCL Tech, Century Tex, Madras Cem, Yes Bank and Voltas. On the other hand, gainers included Jai Corp, Jet Airways, Koutons, Gujarat NRE and REI Agro.
Shares of Mahindra & Mahindra fell 5% to end at Rs1072 after the company announced that it posted a net profit after special adjustments of Rs4.13bn a decline of 5% as compared to Rs4.36bn for the quarter ended December 31, 2008. Total Income is Rs45.21bn for the quarter ended December 31, 2009 where as the same was at Rs29.29bn for the quarter ended December 31, 2008.
The results for the previous year's quarter and nine month period ending December 31, 2008 have been restated to incorporate the figures of the Company's erstwhile subsidiary Punjab Tractors Ltd (PTL) which merged with the Company effective August 01, 2008 on February 16, 2009.
The company also announced that the board of approved the sub-division (stock-split) of each of the equity Share of the face value of Rs10 each in the equity share capital of the company fully paid-up into 2 equity shares of the face value of Rs5 each fully paid-up and consequential.
The company would be seeking consent of the Shareholders for the aforesaid and has fixed February 05, 2010 as the cut off date for ascertaining the list of Shareholders to whom Notice and Postal Ballot Form will be sent.
Jet Airways announced its Q3 results with net profit of Rs1.06bn as against loss of Rs2.14bn in the same period last year. On the other hand, net sales fell 6.5% YoY at Rs27.2bn as against Rs29.1bn in the same period last year.
Shares of Jet Airways gained 3.7% to end at Rs539. It opened at Rs523 it touched an intra-day high of Rs555 and a low of Rs519 and recorded volumes of over 0.76mn shares on BSE.
ONGC announced that Life Insurance Corporation has increased its shareholding from 4.99% to 5.01% in the company. The aggregate number of shares held by LIC as on January 19, 2010, are 107111252 number of equity shares of ONGC.
The stock gained 0.5% to end at Rs1119. It scrip opened at Rs1115 it touched an intra-day high of Rs1126 and a low of Rs1108 and recorded volumes of over 0.12mn shares on BSE.
Shares of India Cements slipped by 4% to end at Rs113 after the company’s net profit fell 44% to Rs348mn for the quarter ended December 31, 2009 as compared to Rs619.1mn for the quarter ended December 31, 2008.
Total Income has increased from Rs76.88bn for the quarter ended December 31, 2008 to Rs87.59bn for the quarter ended December 31, 2009.
Shares of Crompton Greaves advanced 2% to end at Rs419 after the company announced that board of directors will meet on January 28, 2010to consider issue of Bonus Shares. The scrip opened at Rs424 it touched an intra-day high of Rs448 and a low of Rs418 and recorded volumes of over 0.26mn shares on BSE.
Shares of United Breweries erased early gains and ended lower by 3.5% at 157.5. The stock hit an intra-day high of Rs170 after the company announced its Q3 results with net profit rising 14-folds to Rs212.6mn as against Rs14.7mn in the same period last year.
While, net sales rose 18.5% to Rs4.47bn as compared to Rs3.77mn in the same period last year.
Shares of NMDC slipped 3.5% to end at Rs516 after reporting a decline in Q3 sales and profit. The company reported a 40% drop in profit to Rs8.6bn in the quarter ended December 31 while the company’s sales fell 32% to Rs15.88bn.
The scrip opened at Rs533 it touched an intra-day high of Rs543 and a low of Rs510 and recorded volumes of over 1.4mn shares on BSE.
Shares J. Kumar Infraprojects shot by over 4.5% to end at Rs190 after the company received work orders worth Rs360mn. (a) Construction of pedestrian Skywalk at Kharghar, Navi Mumbai worth Rs330mn. (b) Pilling works orders from various parties worth Rs30mn.
The scrip opened at Rs183 it touched an intra-day high of Rs198 and a low of Rs181 and recorded volumes of over 0.38mn shares on BSE.
Shares of Kale Consultants bounced from day’s and gained 1.6% to end at Rs94 after the company announced its Q3 results with net profit rising 48.2% to Rs56.5mn as against Rs38.1mn in the same period last year. While, third quarter operating revenue was at Rs431.2mn as compared to Rs368.7mn.