To establish oneself in the world, one has to do all one can to appear established.
The Indian equity market appears set to establish its hold. For all those who wake up trying to track how the Nifty is performing on the Singapore Stock Exchange (SGX), there will probably be another breed of investors who will now stay awake to watch the Dow and S&P 500 being traded on our exchange.
Meanwhile, stocks appear to have settled into yet another consolidation phase with no substantial newsflow to trigger direction. Traded volumes have been a bit disappointing even as flows from FIIs have improved. The post Budget feel-good factor which actually coincided with global optimism seems to have ebbed slightly. For lack of other things, fourth quarter results, RBI’s annual policy meeting and monsoon could provide fresh direction going ahead. On the global front, it is going to be more of a mixed bag. External events could surprise on both sides- negative as well as positive.
Today we expect flat to a slightly higher start. US indices have gained overnight. European stocks too advanced while Asian markets are mostly in the green zone. On the technical front, 5150 is proving to be a tough resistance for the NSE Nifty. If it manages to surpass that barrier, the next obstacle could come at around 5190-5200. On the down side, strong support is expected at 5000. Though the UPA is under no real threat, one needs to keep an eye on the developments in the capital.
FIIs were net buyers in the cash segment on Wednesday at Rs3.64bn on a provisional basis. Local funds were net sellers of Rs3.75bn, according to figures published on the NSE's web site. In the F&O segment, the foreign funds were net buyers of Rs1.55bn. On Tuesday, FIIs were net buyers of Rs17.7bn in the cash segment.
Elsewhere in the world, the US monthly deficit stood at record $221bn in February. Japan's Q4 growth has been revised down to 0.9% vs initial 1.1%. Bank of Korea has kept its key policy rate unchanged at 2%. Australia's unemployment rate has gone up to 5.3% in February. China's consumer price index (CPI) is up 2.7% from year-earlier, above 2.4% forecast.
US stocks edged higher for a second straight day on Wednesday, thanks to a rally in the financial sector led by American International Group (AIG) and Citigroup, which conducted a successful offering of $2 billion in securities. US bank stocks rose, led by Zions Bancorp, Regions Financial Corp. and SunTrust Banks, amid speculation about mergers and acquisitions in the space.
The Nasdaq ended at its highest level in more than 18 months due to strength in the financial sector and an upbeat report on wholesale inventories. The tech-laced index closed up 18.27 points or 0.78% at 2,358.95. The Dow Jones Industrial Average rose 3 points, or less than 0.1%, to end at 10,567.33. The S&P 500 index advanced 5 points, or 0.5%, to 1,145.
The Nasdaq closed at its highest level since August 2008. Wednesday marked the 10th anniversary of the Nasdaq's all-time closing high of 5,048.62 at the peak of the dot-com bubble.
Market breadth was positive.
Traders said volumes have been declining this week as many market participants have moved to the sidelines amid a lack of market-moving economic reports. The US market has stalled, with the S&P 500 struggling to push past its Jan. 19 high of 1,150. "Until that happens, the market is just going to drift.
The dollar slipped versus the euro but rose against the yen and the pound.
The price of oil rose 60 cents to settle at $82.09 after hitting a high of $83.03 earlier in the session.
Meanwhile, the price of gold fell $14.20 to close at $1,108.10 an ounce.
The price of the 10-year note fell, pushing up the yield to 3.71%. The government sold $21 billion worth of reopened 10-year notes on Wednesday as part of a $74 billion offering of U.S. debt this week.
Bank stocks advanced on upbeat analyst comments and bullish statements from some executives. Citibank rose 3.6% after the company priced a $2 billion offering of trust-preferred securities. Bank of America gained nearly 2%.
AIG soared over 10% as investors cheered the insurance giant's recent asset sales. Fannie Mae and Freddie Mac also gained significant ground.
Shares of energy producers weakened as oil prices pared earlier gains. Oil briefly traded above $83 a barrel after the government reported a smaller-than-expected increase in oil supplies and a dip in gasoline inventory but ended 60 cents higher to settle at $82.09 a barrel. Gold prices fell.
The US Commerce Department said wholesale inventories fell 0.2% in January, after a 1% drop the month before, raising expectations that consumer demand is strengthening.
Separately, the Labor Department said fewer states reported increases in unemployment in January.
The Treasury Department said the government suffered a record $220.9 billion budget deficit in February, after a shortfall of $42.6 billion in January. It was the 17th consecutive monthly deficit and was slightly smaller than the $221 billion shortfall economists had forecast.
Shares of Facet Biotech surged 66% after Abbott Labs announced plans to acquire the company for $27 a share. Abbott gained about 0.7%.
Airline stocks rallied on growing expectations that 2010 is shaping into a profitable year for the industry. Shares of UAL, holding company for United Airlines, and Continental Airlines surged about 5%.
China reported a 46% increase in exports during February. The rise was due in part to stronger demand from consumers in the US and Europe, analysts said.
Investors will turn Thursday to the government's weekly report on initial claims for unemployment benefits. Economists expect claims to have risen last week by 9,000 to 460,000. The Census Bureau's report on the January trade gap is also due out on Thursday.
It was yet another insipid trading session for the Indian markets with the benchmark indices registering modest gains. After being under pressure for majority of the day, markets managed to recover some losses towards the fag end shutting shop off intra-day lows.
The NSE Nifty which broke below the 5100 levels nearly three times during the day, held on to the important level thanks to index heavyweights Reliance Industries and HDFC Bank. While the 17,000 mark remained intact on the BSE Sensex.
However, the breath on the BSE Sensex was negative, out of the total 2905 stocks, 1648 declined as against 1185 advances and 72 remained unchanged.
Among the 30-components of Sensex, 18 stocks ended in the positive and 12 ended in the red.
The BSE Sensex advanced 46 points to end at 17,098 after touching a high of 17,183 and a low of 17,028. The NSE Nifty added 15 points to end at 5,116.
In Asia, the Nikkei in Japan ended flat, while Australia's S&P/ASX also remained unchanged and Hang Seng index in Hong Kong also ended flat.
Even in Europe stocks were trading flat. The DAX in Germany was up 0.2%; the CAC 40 index in France was up 0.2% and the FTSE in the UK was flat.
Coming back to India, among the BSE sectoral indices, the Oil & Gas index was the top gainer, adding 1%, followed by the FMCG index that was up 0.8% and the BSE Realty index was up 0.6%.
Among the losers were BSE Teck index down 0.5% and BSE IT index down 0.4%. Even, the BSE Mid-Cap index was down 0.2% and BSE Small-Cap index was down 0.3%.
Outside the frontline indices, the big gainers in the broader market were M&M Finance, IDFC, Thermax and Indian Hotels. On the other hand, losers included Balrampur Chini, Renuka Sugars, Adani Ent and RCF.
Thermax announced the formation of a strategic joint venture with Babcock & Wilcox Power Generation Group, Inc. to engineer, manufacture and supply supercritical boilers for the Indian power sector. The Joint venture will also manufacture subcritical boilers over 300MW in size.
The stock gained 2.3% to end at Rs671. It opened at Rs658 it touched an intra-day high of Rs680 and a low of Rs658 and recorded volumes of over 0.18mn shares on NSE.
Texmo Pipes and Products, manufacturer of PVC pipes had a scintillating debut on Wednesday. The stock shot up to Rs139 as against its issue price of Rs90 per share, translating into a premium of 54%.
The company had come out with a public issue of 5mn shares in a price band of Rs85 to Rs90 each to raise over Rs425mn. The IPO of Texmo Pipes & Products Limited received subscription of 7.48 times.
The QIBs portion received subscription of 1.02 times with bids for 2499900 equity shares against the offer of 2450000 equity shares. The Non Institutional Investors portion was subscribed 30.4962 times receiving bids for 22414725 equity shares against the offer of 735000 equity shares. The Retail Individual Investors portion of the issue received subscription of 7.26 times.
The company proposes to invest the proceeds to expand its PVC pipes capacity by 66%, start making pipefittings and diversify in woven sacks by October 2010. Post-IPO, the promoter group’s stake in the company will come down to 55.6% from the current 100%.
After being under pressure in the previous trading session, shares of Tata Motors bounced back and gained by 1% to end at Rs780 after Tata Sons and Citigroup Global Markets Mauritius Pvt. acquired the 8.65mn shares from Daimler AG.
Daimler AG had sold its 5.34% stake or 25.5mn equity shares in Tata Motors through a block deal on Tuesday morning, the deal was done at an average price of Rs750 per share on the BSE. Through this share sale, Daimler AG managed to raise Rs19.12bn.