It is only possible to live happily ever after on a day-to-day basis.
The gains made in Saturday’s special session may not hold much significance due to lack of adequate participation. Nevertheless, the bulls did get a chance to claw their way back after being battered and bruised in the previous two days. That snap-back advance may continue today, at least early in the morning. The rest of the day’s proceedings will hinge on how the external situation evolves.
Don’t be surprised if the market recovers some more ground. Use that pull-back as an exit opportunity, as the market may fall further on a combination of local and global worries. On the whole, the market will be volatile with alternate bouts of rallies and declines. We remain cautious and advise you to stay on guard till the turbulence subsides.
The near-term support for the Nifty is around 4700. The crucial level to watch would be 4640, which represents 200 DMA. A sustained and decisive breach of this level could spell more trouble. On the higher side, the market will face resistance at around 4900-5000 levels. The Nifty has to sustain above 4950 to signal resumption of an intermediate uptrend.
FIIs were net sellers in the cash segment on Saturday at Rs284.5mn on a provisional basis while the local funds were net buyers of Rs324.8mn, according to figures published on the NSE's web site. In the F&O segment, the foreign funds were net sellers to the tune of Rs320.7mn. As per SEBI figures, the FIIs were net buyers of Rs425mn in the cash segment on Thursday. Mutual Funds were net sellers of just Rs2.96bn in the cash segment on the same day.
Wall Street reverses losses to end higher:
US stocks managed modest gains, ending higher on Friday in the wake of a dramatic comeback in the final hour of trade. The advance was led by the technology space, which has bore the brunt of the recent sell-off. Late gains were also seen in the commodity space.
The Dow Jones Industrial Average erased a 167-point drop in the final hour of trading, on speculation that the European Union (EU) may come to the rescue of Greece in resolving its debt crisis. Oil, gold and copper rebounded, and the dollar pared its gain.
Reversing course after a nearly 170-point drop earlier, the Dow added 10.05 points, or 0.1%, to 10,012.23. The Nasdaq Composite Index rose 15.69 points, or 0.7%, to 2,141.12. The S&P 500 Index gained 3.08 points, or 0.3%, at 1,066.19.
All the three major US indexes touched three-month lows before recovering. A three-session rout had sent the US market to its lowest point since last fall.
Stocks fell sharply in the afternoon as worries about a growing debt crisis in Europe exacerbated uncertainty about the US economic outlook. But the market changed direction as the dollar trimmed bigger gains.
The Dow fell 0.6% on a weekly basis while the S&P 500 lost 0.7% and the Nasdaq shed 0.3% from the week-ago close.
The economic picture is still muddy after the government released a conflicting report on US employment in January. The US unemployment rate fell to 9.7% in January from 10% in December. Economists expected unemployment rate to hold steady at 10%.
But the drop in jobless rate coincided with nonfarm payrolls shedding 20,000 jobs on the month.
The Labor Department released the report before the start of trading. Employers had been expected to add about 15,000 jobs. Employers cut a bigger-than-initially reported 150,000 jobs from their payrolls in December.
In its latest report on employment, the government said that job losses in 2009 were worse than previously reported. Though the government's survey of households found a drop in the unemployment rate the new figures raised concern that the recovering economy may be slow to bring relief for workers.
The January report had some positive signs, including an increase in the work week and an increase in temp agency employment - both of which are seen as leading indicators. But the report also showed that the impact of the recession on the labor market was far worse than initially reported.
Worries about the eurozone caused global investors to dump riskier assets and take refuge in safe havens like the US dollar and government debt. The greenback rose to a more than six-month high versus the euro and also gained against the yen. The dollar's strength then dragged on commodity prices, oil and gold stocks.
Because of the flight to safety, assets that have been benefiting from a weak dollar are getting hit. However, the trend could turn out to be temporary and once the panic goes away, buyers would move back into riskier assets.
US investors are focused on whether there will be a default or bailout in Greece, and how this will affect the euro and the dollar.
COMEX gold for April delivery fell US$10.20 to settle at US$1,052.80 an ounce, after slumping US$49 on Thursday.
US light crude oil for March delivery fell US$1.95 to settle at US$71.19 a barrel on the New York Mercantile Exchange.
Treasury prices rose, lowering the yield on the 10-year note to 3.54% from 3.61% late on Thursday.
Goldman Sachs surprised many on Wall Street by announcing that it is paying CEO Lloyd Blankfein US$9 million in company-restricted stock as his bonus. Blankfein was expected to receive a heftier payment.
Earlier, JPMorgan said that its CEO Jamie Dimon was given a US$16 million bonus last year, in restricted stock and options.
The S&P 500 surged 23% in 2009, and 65% after hitting a 12-year low on March 9 of last year. That momentum propelled stocks into the first half of January. But by the second half of the month, the tone had turned more sour and investors had begun to step back.
Between rally highs hit on Jan. 19 and Friday's lows, the S&P 500 lost 9.2%, getting close to the technical definition of a correction - a loss of 10%.
Toyota's CEO apologized Friday for the recall of 8 million cars. However, he did not announce a new recall of the popular Prius Hybrid, despite reports of brake problems. Earlier, the company said it is also examining the brake systems of the Lexus hybrid vehicles since they used the same system as the 2010 Prius.
Toyota shares gained 3.5%.
European stocks declined for a third day, extending the biggest weekly slump in 11 months, on concerns that efforts by Greece, Portugal and Spain to repair their bleeding balance sheets will hurt the region’s economic recovery.
The Dow Jones Stoxx 600 Index decreased 2.2% to 237.46. On Thursday, the pan-European benchmark suffered its worst one-day fall in three months. And over the course of the week it lost 3.9%, its worst performance since the week ended Feb. 13 2009.
Greece's ASE Composite index lost 3.7 % to 1,878.91, while Spain's Ibex 35 index declined 1% to 10,139.4. Portugal's PSI 20 index fell 1.4% to 7,341.56, down after the Portuguese government on Friday voted to lift spending.
The French CAC-40 index closed down 3.4% at 3,563.76, while the German DAX index declined 1.8% to 5,434.34 and the UK's FTSE 100 index shed 1.5% to 5,060.9. Spain’s IBEX 35 slid 1.4 percent, paring an earlier plunge of 3.2%.
Benchmark indices ended near day’s high as bulls dominated the entire 90-minutes of special trading on Saturday. Realty stocks, which were badly battered in the past couple of sessions, turned out to be among the top gainers, metal stocks too rebounded after recent sharp losses. The Mid-Caps and the Small-Cap stocks also were lapped up during the special trading session.
The BSE Sensex rose 124 points to end at 15,915 while the NSE Nifty added 38 points to end at 4,757.
The session was summoned by the National Stock Exchange which is upgrading the capacity of capital market trading system by implementing horizontally scalable architecture.
Among the 30-components of Sensex, 28 ended in the negative terrain and only Hero Honda Bharti Airtel ended in the red. Among the top gainers were Hindalco, JP Associates, Sterlite, DLF, Infosys and Tata Steel.
Outside the frontline indices, the big gainers in the broader market were Spice Comm, Essar Oil, REI Agro, GMR Infra and Century Tex. On the other hand, losers included P&G, Ackruti City, Indian Bank and Tulip Tele.