The undertaking of a new action brings new strength. – Evenius.
April promises to be an action-packed month after a rather dull March. Earnings, RBI policy, IIP data, monthly inflation and 3G auction will vie for the market’s attention. On top of that, one will have to keep an eye on global developments. The market has left behind a stellar fiscal year and began the new one on a firm note.
Today we expect the momentum to gain strength on the back of strong global cues. A better-than-anticipated US jobs report is likely to give a fillip to world markets. This means that the NSE Nifty will breach 5300 yet again today. It could manage to stay above 5300 given the firm global markets and positive FII flows. However, the Nifty is likely to meet resistance as it approaches 5400 and attempts to surpass that level.
In short, the bias remains positive but there might be some softening owing to growing discomfort on valuations. Inflation will continue to be a big worry, especially if it crosses double digits and doesn’t come down quickly. Going further ahead, monsoon will have some bearing on sentiment and on the overall economic outlook.
Telecom firms will be in focus ahead of the 3G auction. Cement firms may also attract some attention due to strong dispatch numbers and news of fresh consolidation. Patni Computer will also be in the spotlight amid reports that promoters have resumed talks for an exit. RIL, ONGC and Cairn could rise as crude oil prices have crossed $85 a barrel. But, PSU oil marketing companies will come under pressure.
FIIs were net buyers in the cash segment on Thursday at Rs1.06bn on a provisional basis. Local funds were net buyers of Rs4.5bn, according to figures published on the NSE's web site. In the F&O segment, the foreign funds were net buyers of Rs10.51bn.
US stocks closed higher on Thursday with the Dow Jones Industrial Average and S&P 500 index ending at a fresh 18-month highs as Wall Street kicked off a new quarter on a firm note. Oil and other commodities rallied as economic reports from across the globe lifted hopes of a global recovery.
The Dow added 70 points, or 0.7%, ending at 10,927.07, its highest close since Sept. 26, 2008. The blue-chip indicator rose to within 43 points of 11,000, a key psychological indicator, before pulling back. The Dow touched an intraday high of 10,956.30.
The S&P 500 gained 9 points, or 0.7%, to finish at 1,178.10. Gains in materials and energy shares led the advance in the broad index.
The Nasdaq added 5 points, or 0.2%, to 2,402.58.
For the week, the Dow was up 0.7%, the S&P rose 1% and the Nasdaq advanced 0.3%, the indexes' fifth straight week of gains.
For every stock on the decline, nearly three were rising on the New York Stock Exchange, where trading volume topped 928 million and composite volume topped 4.1 billion.
The dollar gained versus the euro and fell against the yen.
COMEX gold for June delivery rose $11.60 to settle at $1,126.10 per ounce.
US light crude oil for May delivery rose $1.11 to settle at $84.87 a barrel on the New York Mercantile Exchange, the highest close for crude since October 2008.
Treasury prices tumbled, raising the yield on the 10-year note to 3.86% from 3.83% late on Wednesday.
US stocks rose through the early afternoon as investors welcomed reports showing continued fall in the pace of job losses and further pick-up in the manufacturing sector. The advance briefly lost steam in mid-afternoon, before picking up again near the close.
US stock markets were shut on Friday for Good Friday, even as the key jobs report was slated for release. But, the Treasury markets had a shortened session.
The initial jobless claims data, released on Thursday showed that the US is witnessing a slow and steady improvement in the labour market and the manufacturing numbers provided reassurance about the prospects for the global economy.
On Wednesday, US stocks had declined at the end of a good quarter, in which the Dow gained 4.1%, the S&P 500 gained 4.9% and the Nasdaq gained 5.7%. All three major US stock indexes have risen in six of the last seven weeks.
The number of Americans filing new claims for unemployment fell last week to 439,000 from 445,000 in the previous week, matching the lowest level since August 2008. Forecasts were for 440,000 claims, according to a consensus of economists.
The Labor Department report also showed that continuing claims, a measure of Americans who have been receiving benefits for a year or more, fell to 4,662,000 from 4,668,000 the previous week. Economists thought continuing claims would fall to 4,618,000.
A separate report from outplacement firm Challenger, Gray & Christmas showed that planned job cuts rose in March. Employers said they were planning to cut 67,611 jobs in March, a rise of 61% from February's 42,090 cuts.
The Institute for Supply Management's manufacturing index rose to 59.6 in March from 56.5 in the previous month. Economists expected a reading of 57.
February construction spending fell 1.3% after falling 1.4% in January, according to a Census Bureau report released in the morning. Economists thought it would fall 1%.
In company news, BlackBerry maker Research in Motion (RIM) slipped after it posted fiscal fourth-quarter earnings and revenue that rose from a year earlier, but missed forecasts due to weaker-than-expected phone shipments.
The company also issued a fiscal first-quarter earnings and revenue forecast that was better than expected. But shares fell on Thursday as analysts and investors expressed worries that the company is not keeping up with Apple and Google.
Primerica, Citigroup's soon-to-be spun-off life insurance division rallied more than 20% in its first day of trading as a public company.
General Motors (GM) and Ford Motor were among the automakers reporting improved sales in March, although forecasts were short of more bullish analyst estimates released earlier in the month.
Ford said sales rose 40% versus earlier forecasts for a gain of 55%. GM said sales rose 21% versus forecasts for a gain of 27%.
Overall auto industry sales were expected to rise sharply in March in comparison to a weak period a year earlier.
The positive economic data in the US followed reports that manufacturing in China is picking up speed, and confidence is rising among Japan's biggest manufacturers.
European shares ended higher on the first day of the second quarter, helped by improvement in manufacturing data from Europe, China and the UK.
The Stoxx Europe 600 index rose 1.3% to end at 267.02, extending gains from the first quarter when the index rose around 4%.
Manufacturing activity across the 16-nation euro zone expanded at the fastest clip since June 2006 in the same month. The euro-zone figure masked sharp divergence within the region, with Germany's PMI reading at an almost 10-year high but Greece at an 11-month low.
The euro rose against the dollar to US$1.3568.
The German DAX index rose 1.33% to 6,235.56 and the French CAC-40 index advanced 1.5% to 4,034.23. The UK's FTSE 100 gained 1.15% to 5,744.89 after activity in Britain's manufacturing sector last month accelerated at its fastest pace since October 1994.
After enjoying a spectacular run in FY10, the Indian benchmark indices ended the week on a flat note halting its seven-week winning streak. The Nifty and the Sensex although started off the week by hitting their respective 52-week highs, however, the surge showed some signs of slackening. Headwinds include inflation, an impending hike in interest rates. Monsoon will be crucial. The earnings and guidance from India Inc would be the closely watched in the ensuing weeks.
The Realty, Capital Goods and the Power stocks were in demand during the week; even small-cap stocks attracted buying interest. On the other hand, the IT stocks were among the top laggards as the rupee appreciated to its 52-week high of Rs44.88 as against the US dollar.
The FII continued to be net buyers in the Indian markets. They bought stocks to the tune of Rs40.46bn in the last four days. On the other hand, the DIIs were net seller to the tune of Rs7.55bn.
The BSE Sensex hit an intra-week high of 17,793 and low of 17,488 and the NSE Nifty hit an intra-week high of 5,329.5 and low of 5,235.
On Friday, The BSE Sensex advanced 164 points to end at 17,692 and NSE Nifty added 41 points to close at 5,291.
Market breadth was in favour of the bulls, out of total 2889 stocks, 2,208 advanced against declines of 610 and 71 stocks remained unchanged.
In Asia, the Nikkei in Japan ended higher by 1.4%, Australia's S&P/ASX also gained 0.6%. Shanghai SE Composite rose 1.2% and Hang Seng index in Hong Kong was up 1.4%.
In Europe, stocks were trading with a positive bias. The DAX in Germany was up 0.9%, the CAC 40 index in France was up 1.2% and the FTSE in the UK was up 0.9%.
Coming back to India, among the BSE sectoral indices, the BSE IT index was top gainer, the index rose 2.2%, followed by BSE Consumer Durables index up 1.5% and Metal index up 1.4%.
Among the top losers were, BSE FMCG index was down 0.3% and the BSE Auto index was down 0.1%.
Outside the frontline indices, the big gainers in the broader market were P&G, Godrej Ind, Crompton Greaves, Max India and Biocon. On the other hand, losers included Mundra Port, Balrampur Chini, Renuka Sugar and Tata Chem.