Everybody knows if you are too careful you are so occupied in being careful that you are sure to stumble over something – Gertrude Stein.
The bulls finally managed to jump around Mount 18K but didn’t really manage to hoist their flag. The Nifty could surpass 5400 in the near term, provided there are no untoward developments and FII inflows remain firm. Some selling pressure will set in at higher levels given the jitters surrounding high valuations. In addition, a spate of headwinds like elevated inflation, impending rise in interest rates and a fragile global economy could play spoilsport. Monsoon will of course be the joker in the pack.
Today we expect a slightly lower start owing to soft global cues. US stocks fell despite Fed’s dovish words. Talk of potential changes to the EU-IMF debt rescue for Greek cast a shadow over world markets. Asian markets are mostly in red as US consumer credit and Japanese machinery orders reports missed economist estimates.
Back home, IIP data will be declared on Apr 12, while monthly inflation will be released on April 14. RBI’s annual policy is on Apr 20. Another round of rate hike could be in the offing. So, trade wisely and be on guard to shift gears quickly if the need arises.
US stocks pulled back a little amid mixed corporate news and steady increase in oil prices. Meanwhile, Fed chairman Ben Bernanke is more upbeat about the economic outlook than he has been at any time since the financial crisis began in the summer of 2007. Economic conditions in the US would continue to improve and be strong enough to slowly reduce the unemployment rate, he says.
Japanese shares have been dragged down by weaker-than-expected economic data. European shares retreated from recent highs amid some weakness in the commodity space and Greek banks.
FIIs were net buyers in the cash segment on Wednesday at Rs3.38bn on a provisional basis. Local funds were net sellers of Rs234.3mn, according to figures published on the NSE's web site. In the F&O segment, the foreign funds were net buyers of Rs11.78bn. On Tuesday, FIIs were net buyers of Rs5.9bn in the cash segment, as per the SEBI web site.
US stocks slipped following a report that consumer borrowing fell and General Motors said it lost billions of dollars during the second half of 2009.
The Dow Jones Industrial Average lost 72 points, or about 0.7%, to end at 10,897.52. The S&P 500 index fell 7 points, or 0.6% to 1,182.44. The Nasdaq Composite shed 6 points, or 0.2% to 2,431.16.
The blue-chip Dow has bumped against the important mark lately. On Monday, the index rose to within 11 points of 11,000. The Dow last closed above that level on Sept. 26, 2008.
With one hour left in the session, the Federal Reserve reported consumer credit fell at an annual rate of 5.6% in February to $2.448 trillion, after increasing for the first time in a year during the previous month. Analysts had expected a drop of only $0.7 billion.
The Dow fell more than 122 points immediately following the report's release then pared losses ahead of the market's close.
US Treasurys rose, with the yield on the benchmark 10-year note falling to 3.63%.
Earlier this week, the yield topped 4% for the first time in 18 months amid optimism about the economic recovery. Wednesday's auction of 10-year notes was part of an $82 billion offering this week of US debt.
Oil prices dipped, with crude for May delivery settling down 96 cents to $85.88 a barrel. The government's weekly oil inventories report said crude oil supplies rose about 1.1 million barrels last week.
COMEX gold for June delivery settled at $1,153 an ounce, up $17 from the previous day.
The dollar managed gains against the euro and British pound, but it slipped against the yen.
Lingering concerns about the debt woes brewing in Europe also weighed on stocks. Greece denied reports on Tuesday that it was uncomfortable with accepting assistance from the International Monetary Fund.
Trading on Wall Street was muted on Tuesday, but the Nasdaq and S&P 500 edged higher to finish at 1-1/2 year highs.
The market needs a catalyst to get investors to buy at these levels. It would be difficult to break barriers at the 11,000 mark on the blue-chip Dow index and 1,200 for the S&P.
The market is in a wait-and-watch mode, as investors look ahead to quarterly corporate results season. There Will also be the headwinds of increased interest rates and higher commodities costs. That could slow further progress on bourses.
Investors are also looking at the impact of winding down federal purchase programs. Last week, the Federal Reserve stopped buying securities backed by pools of mortgages.
Shortly after the start of trade, General Motors posted a $4.3 billion loss for the July-December period of 2009, during which the company emerged from bankruptcy protection.
The Financial Crisis Inquiry Commission began a three-day hearing, focusing on the causes behind the mortgage meltdown. Former Fed Chief Alan Greenspan testified at Wednesday's hearing, saying that while steps can be taken to limit the impact of another shock, regulators can't fully prevent another crisis from happening.
European shares closed down, as commodity-sector firms retreated, Greek banks fell and Renault shares traded lower after signing a three-way tie-up with Daimler and Nissan.
After closing at a fresh 2010 high on Tuesday, the Stoxx Europe 600 index declined 0.2% to 268.94. On Tuesday, the index had closed at 269.37, its highest level since Sept. 25, 2008, amid optimism for a sustained recovery in the global economy.
Commodity-sector firms gained on Tuesday but traded lower on Wednesday.
Data showed that the euro-zone's economic rebound lost steam in the final quarter of 2009, with gross domestic product unchanged from the previous quarter. An earlier estimate showed growth of 0.1%.
A sharper-than-forecast contraction in the Greek economy meant that the Greek government edged up its 2009 budget deficit forecast to between 12.8% and 12.9% of GDP on Wednesday, just above an earlier estimate of 12.7%, according to reports.
Worries about Greece have weighed on the single currency lately, and the euro declined 0.2% to $1.3363 against the dollar.
The Greek ASE Composite Index dropped 3% to 1,987.58, with banks under heavy selling pressure.
The UK's FTSE 100 index declined 0.3% to 5,762.06, the French CAC-40 index lost 0.7% to 4,026.97 and the German DAX index declined 0.5% to 6,222.41.
Notwithstanding the deadly Maoist attack in Chhattisgarh, the BSE Sensex took off in style, with the index breaching the psychological 18,000 mark for the first time since February 2008. The NSE Nifty missed the 5400 mark by a whisker. However, as the day progressed, the momentum faded away and the market turned a bit volatile in the mid-afternoon trades.
Heavy offloading was seen in the second half, and index front runners like Reliance Industries, ICICI Bank and HDFC dragged the Sensex and Nifty nearly 80 points and 30 points from their respective day’s highs. However, bulls showed great resilience and the main indices managed to recover in the closing hour aided by the Auto and the Oil & Gas stocks.
"After being continuously battered for the past couple of weeks, IT stocks seem to attract some buying interest as the rupee retreated from its 19-month high. The space was also in focus as Infosys will announce its results on April 13", says Amar Ambani, VP Research India Infoline.
Advance-decline ratio stayed in favor of the bulls for the third straight day. Out of total 2972 stocks on the BSE, 1669 stocks advanced as against 1216 declining stocks while, 87 remained unchanged.
Finally, the BSE Sensex gained 29 points to end at 17,970 and NSE Nifty added 9 points to close at 5,375. Among the 30 components of Sensex, 19 ended in the positive terrain and 11 were in the red.
In Asia, the Nikkei in Japan ended flat, Australia's S&P/ASX gained 0.2%. Shanghai SE Composite ended lower by 0.3% and Hang Seng index in Hong Kong was up 2%.
In Europe, stocks were trading flat. The DAX in Germany, the CAC 40 index in France and the FTSE in the UK all were trading almost unchanged.
Coming back to India, among the BSE sectoral indices, the BSE Auto index was top gainer, the index rose 1.1%, followed by BSE Oil & Gas index up 0.8% and realty index up 0.5%.
Outside the frontline indices, the big gainers 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.
Glenmark Pharmaceuticals announced that Glenmark Generics received UK-MA approval for Ropinirole film-coated tablets and to distribute Lercanidipine Hydrochloride film-coated tablets.
Shares of Glenmark Pharma marginally gained by 0.3% to end at Rs278. The scrip opened at Rs280 it touched an intra-day high of Rs281 and a low of Rs274 and recorded volumes of over 0.22mn shares on BSE.
Suzlon Energy proposed a meeting of bond holders on April 29, 2010 to consider proposed resolutions in relation to the trust deeds and certain terms and conditions of convertible bonds.
Shares of Suzlon edged higher by 0.2% to end at Rs75.2. The stock opened at Rs76 it touched an intra-day high of Rs76.2 and a low of Rs74 and recorded volumes of over 4.4mn shares on BSE.
Shares of NTPC gained by 1% to end at Rs212 after the Chairman of company R.S. Sharma said that the company plans to set up a coal-fired power plant in Bangladesh in a venture with a local company. The scrip opened at Rs210 it touched an intra-day high of Rs212 and a low of Rs209 and recorded volumes of over 0.62mn shares on BSE.
Shares of Godrej Consumer Products gained 1% to end at Rs281 after the company announced that it has agreed to buy Indonesian household insecticide maker PT Megasari Mamur.The scrip opened at Rs287 it touched an intra-day high of Rs299 and a low of Rs281 and recorded volumes of over 0.13mn shares on BSE.
Shares of Shree Ashtavinayak surged by over 2.5% to end at Rs13 after the company announced that the board of directors has approved the proposal of buy back up to maximum price of Rs21.60 per share and up to Rs250mn from Open market through Stock Exchange. The scrip opened at Rs13.45 it touched an intra-day high of Rs13.45 and a low of Rs12.8 and recorded volumes of over 14.3mn shares on BSE.
Shares of Rana Sugars shot up by over 8% to end at Rs14.15 after the United Nations Framework Convention on Climate Change approved Carbon Credits to the company for using Green Energy for its Bagasse based Cogeneration Power Project situated at District Amritsar, Punjab. With this benefit, the profitability of the company is likely to be increased considerably.
Dewan Housing Finance announced that the company proposes to seek the approval of the board of directors to consider and approve fund raising through issue of securities, by way of equity shares / equity related instruments: (i) To QIB's through QIP and/or to FIIs through FDI route.
Also to issue equity shares and/or convertible equity warrants to the Promoter /Promoter group of the company on preferential basis as per SEBI (ICDR) Regulations 2009
And also to enhance FIIs investment limit in the paid up capital of the company as per FEMA Guidelines.
Shares of Dewan Housing surged by over 3% to end at Rs218. The scrip opened at Rs212 it touched an intra-day high of Rs227 and a low of Rs210 and recorded volumes of over 0.4mn shares on BSE.