Never does nature say one thing and wisdom another. Juvenal, Satires.
As far as the market is concerned, the wise thing to do right now is to stay guarded amid heightened volatility and uncertainty. Talking of nature, reports suggest that monsoon this year is going to be "near normal" due to receding El Nino conditions. The first official monsoon forecast from IMD will be out later today. A significant improvement in rains from last year’s near disaster will go a long way in addressing some concerns on inflation. A healthy farm sector growth will also lift the overall economic growth. As of now, one can only keep one’s fingers crossed.
Coming to today’s outlook, the start will be a little weak as Asian markets are mostly in the red. US stocks finished nearly unchanged while the lingering worries over Greece’s financial state dragged down European indices. The US dollar rose for a fifth consecutive session as Greek bond yields jumped to new record high, weighing on the euro. We continue to advocate caution as the market will remain rangebound and sideways. Valuations too are not all that compelling barring few exceptions and fund flows have been easing of late. Mid-cap and Small-cap counters may continue to outperform frontline peers but one must be extremely careful while dealing with these stocks.
Results Today: ACC. Ambuja Cements, Escorts, Gujarat Gas, Indiabulls Power, M&M Financials, Nestle India, Rallis India, Sasken, Sterlite Technologies, Strides Arcolab, Tata Sponge, Wipro and Zensar.
FIIs were net buyers of just Rs829.6mn on Wednesday on a provisional basis. Local funds were net buyers of Rs252.5mn, according to figures published on the NSE's web site. In the F&O segment, the foreign funds were net buyers of Rs4.73bn. On Tuesday, FIIs were net buyers of Rs325mn in the cash segment, as per the SEBI web site.
US stocks edged higher on Wednesday as better than anticipated earnings from Apple and Boeing offset indifferent results from Yahoo and a couple of pharma companies. Weakness in the financial space also weighed on the sentiment despite good results by Morgan Stanley and Wells Fargo.
The Dow Jones Industrial Average added 8 points, or less than 0.1%, to end at 11,124.92. The S&P 500 index finished flat at 1,205.93, and the Nasdaq Composite index rose 4 points, or 0.2%, to close at 2,504.61.
The dollar edged higher against the euro but remained weak versus the Japanese yen and the UK pound.
The price of oil fell 17 cents to settle at $83.68 a barrel. Wednesday marked the first day of the June contract.
COMEX gold for June delivery prices rose $9.60 to settle at $1,148.20 an ounce.
Treasury prices were higher, with the yield on the benchmark 10-year note at 3.78%.
Decliners led advancers by a slight margin on the New York Stock Exchange, where 1.2 billion shares traded. Composite volume topped 5.9 billion.
Stocks finished Tuesday's session in positive territory, thanks to better-than-expected earnings from Goldman Sachs and several consumer companies.
Late on Tuesday, Apple posted a record quarter that blew past Wall Street's estimates. Apple shares ended more than 6.1% higher.
Yahoo also delivered earnings that beat expectations, but its sales came in below estimates. Shares closed down 4.9%.
Morgan Stanley said it swung to a $1.8 billion profit in the first quarter before the bell, as strong trading revenue boosted the Wall Street firm's latest results. Shares of Morgan ended 4.2% higher.
Wells Fargo reported a $2.5 billion profit before the bell, beating Wall Street expectations. The company said that credit conditions have "turned the corner" from the weakness of the financial crisis. Still, Wells shares fell almost 2% by the end of trading.
Overall, the finance sector ended 10.8% higher.
Merck & Co. Inc. shares fell 3.7%, the worst performer on the Dow average.
Abbott Laboratories shares were off 2.4% after the health-care-products company reported a lower first-quarter profit.
Gilead Sciences shares dropped 9.6%, making it the worst S&P 500 performer, after the HIV-drug developer issued a weaker-than-expected 2010 financial forecast.
Moody's Corp. shares lost 5.3% after a congressional panel probing the financial crisis subpoenaed the credit-ratings agency for failing to comply with a request for information.
AT&T beat estimates on a boost from strong sales of Apple's iPhone. Boeing's profit and revenue dropped amid fewer airplane deliveries. McDonalds' earnings rose above predictions as sales rose across all its markets, especially Europe and Asia. United Technologies also beat estimates.
Chrysler announced that it earned its first operating profit since exiting bankruptcy on June 10, 2009. The profit follows nearly $4 billion of losses logged by the automaker during that time.
Starbucks and other major names reported results after the bell. The coffee chain handily beat profit and sales estimates, and the company lifted 2010 guidance. Shares were up 2% in after-hours trade.
In other company news, General Motors announced that it had made a final payment of $5.8 billion late Tuesday to the U.S. and Canadian governments, paying off the last of its $6.7 billion in loans.
European stocks ended lower, as losses in the banking space offset strong earnings from both sides of the Atlantic. The Stoxx Europe 600 index declined 0.6% to close at 268.23, reversing course after having gained 1.4% in Tuesday's session.
The French CAC-40 index lost 1.2% to settle at 3,977.67, the UK's FTSE 100 index fell 1% to close at 5,723.43 and the German DAX index ended 0.5% lower at 6,230.38.
Greek banks fell again, with Alpha Bank shares losing 5.2% and Piraeus Bank dropping 3.3%. The ASE Composite Index lost 1.3% to close at 1,936.43. Losses came amid renewed concerns over how the government will finance its debt.
Greek government bond yields rose to fresh highs, as the cost of insuring the government's debt against default also reached record levels.
Greece on Wednesday began talks with its counterparts in the euro region, the International Monetary Fund (IMF) and the European Central Bank on what steps are needed for it to secure a $61 billion emergency aid package.
Indian stock benchmarks erased some of the early gains to finish nearly flat at the end of a choppy day of trade. The Indian market witnessed a follow through rally in the opening trades, buoyed by the overnight advance on Wall Street. However, as the day wore on, bulls turned a bit shaky and pared some of their gains. The key indices fell gradually from their intra-day highs, led by profit booking in the index heavyweights like Reliance Industries, L&T, BHEL and Infosys.
On the other hand, the mid-cap and the small-cap stocks maintained their tempo. Both the broader market indices outperformed the benchmark stock indexes, adding 1% and 1.5% respectively.
"Market players remained cautious as many headwinds like spike in non-food inflation, volatile crude oil prices and fiscal deficit continue to remain important issues to solve. Technically too, the key indices are facing some resistance", says Amar Ambani, Vice President Research IIFL.
The BSE Sensex gained 12 points to end at 17,472 and NSE Nifty gained 15 points to close at 5,245. Among the 30 components of Sensex, 20 ended in the positive terrain and 10 were in the red.
Markets in Asia ended in the green; the Nikkei in Japan was up 1.8%, Australia's S&P/ASX was up by 0.6%. However the Hang Seng index in Hong Kong was down 0.5%. However, and Shanghai SE Composite ended flat.
On the other hand, European indices were trading with negative bias, the DAX in Germany was down 0.2%, the CAC 40 index in France was down 0.3% and the FTSE in the UK was down 0.6%.
Coming back to India, among the BSE sectoral indices, the BSE Realty index was top gainer, the index gained 1.7%, followed by BSE Banking index up 1.25% and Auto index up 1.1%.
Even the Mid-Cap and the Small-cap index ended in the green, they added 1% and 1.5% respectively.
Outside the frontline indices, the big gainers in the broader market were Godrej Industries, Yes Bank, Jet Airways and Opto Circuits. On the other hand, losers included Cadila Health, Hindustan Copper and Castrol India.
Shares of Unitech surged by over 2.5% to end at Rs85.5 after over 20mn equity shares of the company changed hands in multi days. The trades were reportedly done between an average price of Rs86-87 per share. The company approved separating its infrastructure and telecommunications units. MD Sanjay Chandra was quoted as saying that the company expects the demerger of its infrastructure unit to take four to six months and Unitech Infra Ltd. may be listed on bourses by the end of the year, Chandra added.
For every one share held in Unitech Ltd, shareholders will get one share of the new firm Unitech Infra Ltd, to be listed on the stock exchanges.
Unitech Infra will house the property firm's infrastructure businesses including telecoms, management of amusement parks, construction business, hotels, special economic zones. The company also announced that its board approved constituting a committee to explore potential local and overseas acquisitions.
Orchid Healthcare, the US arm of Orchid Chemicals has received USFDA approval for generic modafinil, according to reports. The US regulator has approved Orchid's generic modafinil oral tablets of strength 100 mg and 200 mg. Modafinil is an analeptic drug that stimulates the central nervous system, and is for the treatment of symptoms of fatigue and excessive daytime sleepiness in narcolepsy.
The stock gained by 2.5% to end at Rs157. The scrip opened at Rs155 it touched an intra-day high of Rs158 and a low of Rs154 and recorded volumes of over 0.2mn shares on BSE.
Shares of SpiceJet surged by 1.5% to end at Rs58.65 after reports stated that the low-cost carrier is looking to raise "around" US$75mn selling shares to select investors. The scrip opened at Rs58.4 it touched an intra-day high of Rs59.8 and a low of Rs58.4 and recorded volumes of over 2.5mn shares on BSE.
Shares of Binani Cement shot up by over 8% to end at Rs85.6 after the company announced that it will consider a plan to buy back shares on April 23. The scrip opened at Rs80 it touched an intra-day high of Rs87 and a low of Rs80 and recorded volumes of over 1.1mn shares on BSE.
Shares of Shiva Cement shot up by over 9% to end at Rs9 after the board of directors are planning to meet on April 29, 2010, to consider the proposal for setting up 25 MW Captive Power Plant. The board is also planning to allot 10mn equity share warrants to promoter group at a price of Rs11/-.