The minute you settle for less than you deserve, you get even less than you settled for - Maureen Dowd.
It is time to settle down a bit after a day of unexpected weakness. Bulls may bounce back, tracking the overnight advance in the US. Wall Street managed to escape the Greek-related global selloff, as investors welcomed better than anticipated retail sales. Markets across Asia are stable with a few managing to hold in the green territory. We expect a higher start for the Indian market but things could turn choppy later on.
In case of a fresh fall, the NSE Nifty is likely to find support at 5200-5230. On the higher side, resistance may kick in at around 5400. Worries over European sovereign debt issues might continue to linger for a while. One also has to closely follow events in the US and elsewhere. Attention will soon shift to earnings, both here and abroad.
Crude oil is hovering around $85 per barrel and will pose serious threat if it rises further. The Rupee may appreciate further amid reports that China could soon allow more variation in the yuan. That could weigh on IT and other export-linked stocks. Talking of IT, reports suggest that Infosys is likely to declare a special dividend next week when it announces its Q4 and FY10 results.
Telecom stocks will be in focus as 3G auction kicks off today. The bidding is expected to last for a few days to a month or so. SAIL may remain depressed amid FPO-centric concerns. The latest IIP data will be out on April 12. The RBI will announce its annual policy on April 20. Shares of Shree Ganesh Jewellery will list on the bourses today.
FIIs were net buyers in the cash segment on Thursday at Rs622mn on a provisional basis. Local funds were net sellers of Rs936.2mn, according to figures published on the NSE's web site. In the F&O segment, the foreign funds were net sellers of Rs3.02bn. On Wednesday, FIIs were net buyers of Rs4.18bn in the cash segment, as per the SEBI web site.
US stocks rose on Thursday as upbeat sales reports from retailers helped offset renewed concerns about Greece and other euro zone debt issues.
The Dow Jones Industrial Average advanced 30 points, or 0.3%, to 10,927.07. The S&P 500 index added 4 points or 0.3%, to 1,186.44. The Nasdaq Composite was up 6 points, or 0.2%, at 2,436.81. It matched Tuesday's 18-month high.
Treasury prices fell, raising the yield on the 10-year note to 3.90% from 3.86% late on Wednesday. The 10-year had risen as high as 4% Monday, an 18-month high. Treasury sold $13 billion in 30-year bonds in the afternoon, in the last of four auctions this week worth about $82 billion.
The dollar fell versus the euro and gained against the yen.
COMEX gold for June delivery fell 10 cents to settle at $1,152.90 per ounce.
US light crude oil for May delivery fell 46 cents to settle at $85.39 a barrel on the New York Mercantile Exchange.
Stocks fell in the morning, but managed to erase those losses and edge higher in the afternoon, led by financial shares. The KBW Bank index added 1.4%. The market was also vulnerable after finishing at 18-month highs on Tuesday.
The Dow, Nasdaq and S&P 500 have now risen in six of the last seven weeks. As of Thursday afternoon, the Dow is flat for the week, the Nasdaq and the S&P are both up.
Retail shares gained as well. A number of chain stores reported strong March sales thanks in part to the early Easter holiday and signs of improvement in the job market.
Sales at stores open a year or more, a retail metric known as same-store sales, rose 9.1% in March versus a year ago, according to Thomson Reuters. It was the biggest monthly gain since Thomson began keeping records in 2000, and surpassed the company's forecast for a gain of 6.3%.
But some companies warned that a strong March will chip away at April sales.
Separately, the number of Americans filing new claims for unemployment rose to 460,000 last week from a revised 442,000 the previous week, the Labor Department said. Economists had expected 435,000 claims, on average.
Continuing claims, a measure of those who have been receiving benefits for a week or more, fell to 4,550,000 from 4,681,000 the previous week. Economists thought continuing claims would fall to 4,630,000.
UAL's United Airlines and US Airways are reportedly talking about a merger again, according to several published reports. The two companies discussed teaming up previously in the last decade. UAL shares gained 7% and US Airways shares gained 12%. Other airlines rose as well.
European shares fell, with banks down sharply lower on mounting worries over Greece's ability to service its debt. The Stoxx Europe 600 index fell 0.9% to close at 266.28. Banks dropped across the board.
Declines were more severe for Greek banks with National Bank of Greece dropping 7.3% and Alpha Bank shedding 7.4%. The Greek ASE Composite Index dropped 3.1% to 1,925.82.
Of the main regional equity markets, the French CAC-40 index sank 1.2% to close at 3,978.46, the German DAX index lost 0.8% to end at 6,171.83 and the UK's FTSE 100 index settled 0.9% lower at 5,712.70.
The yield premium demanded by investors to hold 10-year Greek government bonds over German bunds rose hitting its highest level since the launch of the euro in 1999, before coming in slightly following remarks by European Central Bank President Jean-Claude Trichet.
The Bank of England and the European Central Bank left their respective interest rates on hold.
Trichet, in his monthly news conference, said default was "not an issue" for Greece and said the standby aid pledge agreed to by euro-zone leaders last month marked a "serious commitment" that shouldn't be taken lightly.
After reaching dizzying heights upwards of 18,000 levels in the previous trading session, the BSE Sensex stumbled largely due to weak global markets. Stocks across the globe came under pressure amid fresh worries over Greeks financial condition. Part of the selling at higher levels could also be attributed to jitters surrounding high valuations. In addition, a spate of headwinds like elevated inflation, impending rise in interest rates and a fragile global economy played spoilsport. "With Greece financial woes intensifying, market players preferred to book some profit ahead of the eventful results season kicking off next week", says Amar Ambani VP Research India Infoline. Offloading was seen across the board. The Oil & Gas, Metals and the Bank stocks were among the major losers which dragged the BSE Sensex and NSE Nifty index over 300 and 90 points fro their respective 52-week highs. In addition, advance-decline ratio turned in favor of the bears for the first time in three days. Out of total 2957 stocks on the BSE, 1678 stocks declined as against 1198 advancing stocks while, 81 remained unchanged. Finally, the BSE Sensex lost 256 points to end at 17,714 and NSE Nifty fell 70 points to close at 5,304. Among the 30 components of Sensex, 19 ended in the positive terrain and 11 were in the red. Asia markets ended in the red, the Nikkei in Japan slipped 1.1%, Australia's S&P/ASX edged lower by 0.6%. Shanghai SE Composite ended lower by 0.3% and Hang Seng index in Hong Kong was down 0.3%. European indices as well were under pressure, the DAX in Germany slipped 1%, the CAC 40 index in France was down 1% and the FTSE in the UK slipped 1.1%. Coming back to India, among the BSE sectoral indices, the BSE Oil & Gas index was top loser, the index fell 2%, followed by BSE Metal index down 1.9% and Bank index down 1.6%. Even the Mid-Cap and the Small-Cap index ended in the red. On the other hand, BSE Consumer Durables index gained 2.2% and BSE Realty index added 0.6%. Outside the frontline indices, the big losers in the broader market were Central Bank, Idea, IRB Infra and Bharat Forge. On the other hand, losers included Jain Irrigation, PNB, Ispat Ind and LITL. Kotak Mahindra Bank which replaced the Cement major Grasim Industries ended marginally lower by 0.2% at Rs783. On the other hand, shares of Grasim slipped 1.7% to end at Rs2846. Shares of Sun Pharma slipped by 1.4% to end at Rs1773. The company announced that USFDA has granted its subsidiary an approval for its Abbreviated New Drug Application (ANDA) to market a generic version of GlaxoSmithKline’s Wellbutrin SR® Extended Release tablets. Shares of Moser Baer edged higher by 0.5% to end at Rs75 after the company announced the commissioning of its largest Thin Film solar farm with an installed capacity of 1 MW at Chandrapur in Maharashtra. It has been set up using amorphous silicon Thin Film technology which is best suited for the Indian climatic conditions and is connected to the 33 KVA local grid. The project will give much better returns (Rs/kWh) to the investors as compared to other technologies available in the country. Shares of Aptech surged by over 3% to end at Rs175 after the company announced that it would offer 1.7mn shares at Rs216 each to Enam Securites Pvt and 18 other buyers. That’s a 27% premium from yesterday’s closing price. The scrip opened at Rs172 it touched an intra-day high of Rs185 and a low of Rs171.5 and recorded volumes of over 0.94mn shares on BSE. Aban Offshore announced that a contract has been signed with Brunel Shell Petroleum Sendirian Berhad for the deployment of the jack-up rig Deep Driller 8 offshore Brunei for firm period of 4 years plus four optional periods of 1 year each. The estimated revenues from the firm period of the deployment is about US$159mn (equivalent to Rs7.16bn). The deployment is likely to commence during the third quarter of calendar year 2010. Shares of Aban Offshore hit a high of Rs1269 post the announcement however ended flat at Rs1246. Shares of United Spirits ended flat at Rs1336. The company yesterday announced that it has crossed the milestone of clocking a sales volume of 100mn cases for the fiscal year ended March 31, 2010. This achievement makes United Spirits the world’s second-largest spirits company by volumes, dislodging Paris-headquartered Pernod Ricard.