An idea that is developed and put into action is more important than an idea that exists only as an idea - Buddha.
Given the current action in the markets, the bulls seem to have no idea what to do. Today’s F&O expiry will only add to the choppiness as we brave for a negative end to the May series. To begin with we expect a shaky start as most Asian markets are trading lower. Besides, the anxiety over the external environment remains. Results are still pouring in, which may impact the concerned stocks. The Reliance packs could once again be in spotlight on news of fresh collaboration between the two Ambani siblings.
Notwithstanding Wednesday’s big bounce the overall scenario remains quite volatile and uncertain with a negative bias. The Dow Jones erased early gains to end below 10,000 despite a couple of encouraging economic reports. The late selling came as the euro dipped below $1.22 on reports that China is reviewing its holding of the shared currency. The dollar index rose above 87. Crude is hovering around $70 a barrel. Gold is trading above $1210.
Risk-reward continues to be unfavourable and may remain so in the short term. Avoid needless bravado and wait for some more declines before snapping up your favorite stocks.
Results Today: BPCL, BPL, Britannia, Cairn India, Colgate, DB Corp., DS Kulkarni, Engineers India, Essar Shipping, GSPC, GSPL, Jagran, Nagarjuna Fertilizers, National Fertilizers, Neyveli Lignite, Omaxe, Orchid Chem, Royal Orchid Hotels, Sangam India, Tata Motors Vakrangee Software and ZF Steering.
FIIs were net sellers of Rs1.66bn in the cash segment on Wednesday on a provisional basis, according to the NSE data. The local institutions were net buyers at Rs648.6mn on the same day. In the F&O segment, the foreign funds were net buyers of Rs19.81bn. On Tuesday, FIIs were net sellers of Rs14.22bn in the cash segment, according to the SEBI data.
US stocks retreated from session highs to close slightly lower on Wednesday, with the Dow slipping below 10,000 for the first time in three months. A drop in the euro below a key threshold spooked investors on reports that China might review its holding of the euro-zone common currency.
The Dow Jones Industrial Average shed nearly 70 points, or 0.7%, at 9,974.45, ending at the lowest point since Feb. 8. The S&P 500 index lost 6 points, or 0.6%, to 1,067.95, and the Nasdaq Composite index was down 15 points, or 0.7%, to 2,195.88.
This was the first time the blue chip Dow closed below 10,000 since early February. It had risen as much as 135 points during the day.
On the S&P 500, industrials were the only sector of 10 that managed to cling to gains. Telecoms and tech stocks led declines.
All three US stock indexes are down for the week and the month.
For every stock declining, fewer than two were on the rise at the New York Stock Exchange, where nearly 1.9 billion shares traded hand.
The CBOE Volatility index (VIX), Wall Street's fear gauge, ended modestly higher after having fallen through most of the session. The VIX had dropped as much as 13% as the market initially rallied, but turned higher when stocks fell.
The dollar index rose to 87.23 from 86.799 in late North American trading on Tuesday.
A stronger dollar hurts US exports overseas. Also, a weaker euro reflects many investors' concerns about European growth and its impact on the global economic recovery.
US stocks seemed to react to a late-day dip in the euro below $1.22, after the Financial Times said that China is reviewing its euro-zone debt holdings in the wake of Europe's financial problems.
China's State Administration of Foreign Exchange, which manages the reserves, has expressed concerns about its exposure to the five euro-zone markets of Greece, Ireland, Italy, Portugal and Spain, the newspaper said.
The euro fell below to $1.2185 from $1.2308 late Tuesday.
Crude oil futures climbed above $71 a barrel even as the government reported a bigger-than-expected increase in inventories. US light crude oil for July delivery rose $2.76 to settle at $71.51 a barrel on the New York Mercantile Exchange, a gain of over 4%.
COMEX gold for June delivery rose $15.40 to settle at $1,213.40 an ounce.
Treasury prices tumbled, raising the yield on the 10-year note to 3.24% from 3.16% late on Tuesday.
In the day's economic news, new home sales jumped 15% in April, thanks to still-low mortgage rates and a homebuyer tax credit that expired at the end of last month. Sales rose to a seasonally adjusted rate of 504,000 from a revised 439,000 in the previous month. Economists expected sales of 425,000.
Another report released before the start of trading showed that durable goods orders rose 2.9% in April, versus forecasts for a gain of 1.5%. Goods orders were flat in March, a revision on an earlier reading that showed a drop in orders.
However, orders excluding transportation fell 1% after rising 4.8% in the previous month. Economists thought orders excluding transportation would rise 0.7%.
European shares ended higher, with investors picking up shares of companies battered by heavy selling in the previous session.
After a 2.5% downturn on Tuesday, the Stoxx Europe 600 index rose 2.5% to 237.95, with markets volatile amid worries that sovereign-debt issues will curtail growth and spur a rerun of the 2008 banking crisis.
The Organization for Economic Cooperation and Development (OECD) said that economic growth across the world's developed economies is picking up faster than expected, even in Europe, although it did highlight that sovereign debt poses a risk to recovery.
Italy joined other European countries in setting out austerity measures to bring its debt down. The FTSE MIB index rose 2.9% to 18,921.75. Read more on Italy. The French CAC-40 index climbed 2.3% to 3,408.59, the UK FTSE 100 index moved back over 5,000 to close up 2% at 5,038.08 while the German DAX index jumped 1.6% to 5,758.02.
BP shares climbed 1.4%, reversing early losses. The oil giant is attempting a "top-kill" procedure to stem the Gulf of Mexico oil spill. BP said the procedure may take up to two days and warned that the live video feed that Congress forced the company to set up may "not provide a reliable indicator of the overall progress, of success or failure, of the top kill operation as a whole."
Burberry shares jumped 7.6%. The luxury retailer swung to a fiscal-year net profit of 81.4 million pounds ($116.9 million), as exceptional charges fell sharply and sales of shoes and non-apparel accessories climbed.
Portugal Telecom shares rose 6% after the finance director of Spanish telecom giant Telefonica said in an interview published in the Financial Times that the company could launch a hostile takeover bid for Portugal Telecom if the Portuguese group won't sell its share of Brazilian mobile-phone joint venture Vivo. Telefonica shares advanced 0.5%. Read more on possible Telefonica deal.
Deutsche Telekom climbed 1.6%. The company said the head of its T-Mobile USA subsidiary said its veteran CEO would step down next year in a move that signals DT is looking for new ideas to help it regain its footing in this key market.
L'Oreal shares rose 2.9% after the cosmetics company was upgraded to buy from neutral at UBS.
After the bloodbath in previous trading session, bulls were back with a bang thanks to overnight recovery in the US markets. Asian markets rebounded after the Dow Jones staged remarkable come back on Wall-Street. Europe which ended sharply lower on Tuesday also followed suit.
"Similarly, the NSE Nifty opened with a gap up and stayed in a narrow range for majority of the first half. However, markets picked up momentum in the second half led by the IT, Realty and the Metal stocks. Even the second rung stocks were in demand", says Amar Ambani, Vice President Research IIFL.
The turnover yet again past the Rs1 lakh crore mark for the second straight day. The advance decline ratio on the BSE was quite positive today, Out of the total 2885 stocks, 1886 advances as against 901 declines and 98 stocks remained unchanged. Finally, the BSE 30-share Sensex surged 365 points at 16,387 and NSE Nifty advanced 111 points at 4,917.
Markets in Asia ended in the green; the Nikkei in Japan ended marginally higher by 0.7%, Australia's S&P/ASX gained by 1%, while the Hang Seng index in Hong Kong rose 1.1% and Shanghai SE Composite declined 3.5%.
European indices were trading in the green as well, the DAX in Germany was up 1.6%, the CAC 40 index in France was up 2.3% and the FTSE in the UK was up 1.6%.
All the BSE sectoral indices ended in the green, BSE IT index was the top gainer, the index was up 3.5%, followed by BSE Realty index was up 3% and BSE Metal index was up 3%. Even the BSE Mid-Cap index ended lower by 3% and the Small-Cap index gained 1.5%.
Outside the frontline indices, the big gainers in the broader market were GMDC, IDFC, GMR Infra and United Phos. On the other hand, losers included Godrej Cons, Indian Hotels, Concor and IOB.