Certainty is the mother of quiet and repose, and uncertainty the cause of variance and contentions. - Edward Coke.
Uncertainty continues to haunt global markets despite multi-billion-euro bailout for the troubled euro-zone nations. What’s worse, volatility has shot up as risk aversion remains elevated. Gold and the Dollar are attracting safe haven buying while risky assets like stocks and commodities are under pressure. Aside from the European debt crisis, markets are also worried about possible overheating in China. In short, things are not looking bright as of now and the prospects for global equities may take a while to revive.
Today we expect a slightly positive start but early gains may not sustain and the key indices will remain sluggish within a tight range. The NSE Nifty will continue to meet resistance at 5200 and beyond that, at 5300. On the way down, support is placed at around 5115. A bigger selloff could even take the Nifty below 5000. Telecom stocks may fall further on TRAI recommendations and aggressive 3G bids. March IIP data will be out today and is likely to show ~15% growth. Monthly inflation will be released on May 14.
Rural Electrification Corp. Ltd. (REC) has been added to the MSCI Emerging Markets Index. According to reports, Adani Enterprise and Piramal Healthcare have also been included in the widely tracked index. Reports also suggest that HDIL and Suzlon have been added by MSCI while Power Grid and Glenmark Pharma have been removed.
Results Today: Bajaj Auto, Bajaj Holdings, Blue Star, DB Realty, Dewan Housing, Hathway Cable, Infinite Computers, MRPL, Thermax and Welspun India.
FIIs were net buyers of Rs201.9mn in the cash segment on Tuesday on a provisional basis, according to NSE web site. Local institutions were net buyers of Rs224.9mn. In the F&O segment, the foreign funds were net buyers of Rs19.74bn. FIIs were net buyers of Rs6.97bn in the cash segment on Monday, as per the SEBI data. Mutual Funds were net buyers of Rs1.23bn in the cash segment on the same day.
US stocks erased early gains to end mostly lower on Tuesday, losing steam late in a volatile session, as investors turned cautious a day after giving a thumbs-up to Europe's nearly $1 trillion aid package. We could see a short-term trading range as investors adjust to a period of increased volatility.
After rising nearly 90 points, the Dow Jones Industrial Average ended down 36.88 points at 10,748.26. The tech-heavy Nasdaq Composite Index bucked the trend, climbing 0.6 points to 2,375.31. The S&P 500 Index fell 3.94 points, or 0.3%, to 1,155.79.
Utilities led sector gains among the S&P 500 index's 10 industry groups.
Advancers still topped declining issues by 17 to 13 on the New York Mercantile Exchange, where more than 1.4 billion shares traded. Composite volume topped 6.0 billion.
Stocks lost steam in the last hour of trade as enthusiasm waned over the EU's nearly $1 trillion rescue plan to back debt-strapped countries. However, the worries of the last few weeks pushed investors into safe-haven areas such as the US dollar and gold.
US stocks rallied on Monday, joining stocks around the globe, after European leaders approved an almost $1 trillion rescue package aimed at containing the growing debt crisis and stabilizing the euro. The Dow gained 405 points, its biggest gain since March 23, 2009.
But the euphoria ran out of gas amid questions about whether the bailout package will work if Greece and other debt-plagued nations don't make other efforts to cut their growing deficits. Markets around the world slipped after Monday's big gains.
The bailout agreement offered reassurances that the common European currency would survive and the 16 nations that use the euro would be able to get loans. But the nations including Greece will also have to slash spending, possibly slowing Europe's recovery.
Greece requested $18.4 billion in funds from the European Union (EU) and is due to receive $7 billion from the International Monetary Fund (IMF) on Wednesday. In total, the nation is requesting access to around $25 billion of the over $140 billion the EU and IMF have pledged in support.
The funds mean Greece will be able to meet the May 19 deadline to pay back roughly $11 billion in debt.
The CBOE Volatility index, or the VIX, slipped 2% in choppy trading, reflecting the mixed market. On Monday, the VIX slipped around 30%, reflecting a lessening of worries following last week's selloff.
During last week's sell off, culminating in the one-two punch of Thursday's "flash crash" and Friday's follow-up, the VIX rallied to 13-month highs as investors grew more panicky.
The dollar was barely changed versus the euro. On Monday, the euro bounced versus the dollar after hitting 14-month lows against the US currency during last week's big stock selloff. The dollar was barely changed versus the yen.
US light crude oil for June delivery settled down 43 cents to $76.37 a barrel on the New York Mercantile Exchange.
Treasury prices fell, pushing the yield on the 10-year note to 3.56% from 3.54% late on Monday.
The Commerce Department reported that wholesale inventories rose 0.4% in March, after climbing 0.6% in February. Economists thought inventories would increase by 0.5%.
The House Financial Services Subcommittee on Capital Markets was discussing last Thursday's stock market roller-coaster ride, in which a 350-point loss on the Dow became a nearly 1,000-point loss in under 10 minutes. The intraday selloff was the biggest on a point basis in market history.
Executives from the nation's largest stock exchanges and the chairwoman of the SEC were expected to tell Congress that the ultimate cause of the crash remains a mystery.
SEC chairwoman Mary Schapiro said regulators need more time to figure out what exactly happened. She said they had ruled out computer hacking, a terrorist attack or any malicious intent having driven the selling.
In addition, regulators and exchanges have reportedly firmed up plans to institute "circuit breakers" on individual stocks in an attempt to prevent a repeat of last week's incident.
After the close of trade, Walt Disney reported quarterly earnings and revenues that topped expectations.
European shares erased some of Monday's outsized gains as banks and miners came under pressure amid worries about prospects for economic growth from Europe to China. The Stoxx Europe 600 index slipped 0.4% to 253.18, though earlier in the session it lost as much as 2%.
On Monday the index soared 7.2% in a relief rally sparked by news of a EU-IMF €750 billion loan program as well as by the European Central Bank's move to buy government bonds. Bank shares enjoyed big gains in Monday's rally.
The UK's FTSE 100 index was down 1% to 5,334.21, the French CAC-40 index shed 0.7% at 3,693.20. The German DAX index, however, rose 0.3% to 6,037.71, helped by a good performance from auto makers and stronger-than-expected results at Deutsche Post.
Among the smaller benchmarks, the Greek ASE Composite index fell 2.5% to 1,735.29, the Portugal PSI 20 index lost 2.2% to 7,174.10 and the Spanish Ibex 35 dropped 3.4% to 9,995.40.
Equity markets in India ended in the red on Tuesday, as doubts emerged over the unprecedented debt relief for the troubled euro-zone nations. Also, strong set of economic data in China amplified concerns of further monetary tightening in the Middle Kingdom.
In the process, "the 500-plus-point rally of Monday seemed to lose some of the steam. Market players preferred to book some profits at higher levels. Realty, Metal and Pharma stocks were among the major laggards. Even the second rung stocks were under pressure", says Amar Ambani, Vice President Research IIFL.
Finally, BSE Sensex fell 189 points to end at 17,141 and NSE Nifty lost 57 points to close at 5,136. Among the 30 components of Sensex, 27 ended in the negative terrain and only HDFC Bank, M&M and Hero Honda ended in the green.
Markets in Asia ended in the negative terrain; the Nikkei in Japan lost 1.2%, Australia's S&P/ASX was down 1.2%, the Hang Seng index in Hong Kong fell 1.4% and Shanghai SE Composite was down 0.3%.
On the other hand, European indices were trading with negative bias as well, the DAX in Germany was down 1.2%, the CAC 40 index in France was down 2.1% and the FTSE in the UK fell 1.8%.
All the BSE sectoral indices ended in the red, the BSE Metal index was top loser; the index lost 3%, followed by BSE Realty index was down 2.8% and BSE Pharma index was down 2%. Even the Mid-Cap index was down 1% and the Small-cap index fell 1%.
Outside the frontline indices, the big losers in the broader market were Piramal Healthcare, Renuka Sugars, Bhushan Steel and Shriram Transport. On the other hand, gainers included Petronet LNG, RCF, Chambal Fert and Godrej Consumers.
Shares of Fortis Healthcare erased early gains and ended lower by 1.5% at Rs164. According to reports the company plans to raise as much as Rs3.8bn selling 22.4mn shares to GIC Special Investments Pte. The scrip opened at Rs169.8 it touched an intra-day high of Rs171 and a low of Rs164 and recorded volumes of over 1.1mn shares on BSE.
Shares of Glenmark Pharma ended lower by 1.7% to end at Rs272. According to reports Merck & Co. agreed to let Glenmark sell a generic version of the cholesterol medicine Zetia in the U.S. by December 2016 as part of a settlement of a patent-infringement lawsuit. The scrip opened at Rs283 it touched an intra-day high of Rs285 and a low of Rs272 and recorded volumes of over 0.21mn shares on BSE.
Era Infra announced that in association with OJSC-SIBMOST has bagged the prestigious order from NHAI for an estimated cost of Rs17.23bn for "4-Laning of Bareilly-Sitapur Section of NH-24 from KM 262.000 to 413.200 in the State of Uttar Pradesh under NHDP Phase III on Design, Build, Finance, Operate and Transfer ("DBFOT") Toll Basis.
Shares of Era Infra erased slipped 1.1% to end at Rs216. The stock hit an intra-day high of Rs222 after the order was announced it had earlier hit an intra-day low of Rs215. Total traded quantity over the counter was 0.3mn shares on BSE.
Shares of Hindustan Zinc slipped marginally by 0.5% to end at Rs1114. According to reports, Vedanta Resources through its subsidiary Hindustan Zinc has acquired UK-based Anglo American Plc’s zinc business for US$1.34bn in an all-cash deal.
ABG Shipyard sold ~0.8mn equity shares or 2.15% of equity in Great Offshore for Rs369.4mn. ABG's stake in Great Offshore has come down to 7.35% from 9.5% following the transaction.
Shares of ABG Shipyard ended lower by 1.7% to Rs247. The scrip opened at Rs254 it touched an intra-day high of Rs256 and a low of Rs247 and recorded volumes of over 99,000 shares on BSE.