There is not any memory with less satisfaction than the memory of some temptation we resisted - JB Cabell.
The recovery may sure tempt you to believe things are settling down but the situation remains uncertain and risk aversion is still pretty elevated. We managed to bounce back after another rough start as European markets were relatively stable. US stocks too rebounded from session lows to end in the green. Asian markets are mixed this morning with Chinese market in the red yet again. Given the murky global outlook, we expect a subdued start to the proceedings. Sentiment may improve a little, provided there no further tremors on the external front. But, on the whole we expect a volatile yet rangebound session.
Technically, the levels to watch are 4950 on the downside and 5100-5200 on the way up. A close below 4900 could lead to some panic. A decisive breakout may continue to elude us till the Nifty sustains above 5300. For the time being, the broader market may hold more promise as the large caps appear to be fully priced. In terms of events, the latest GDP data will be out on May 31. Monsoon’s progress will also have some bearing on market mood in the near term.
We are certainly not out of the woods yet as far as global factors are concerned, and so it would be wise to remain cautious. Fresh buying could be avoided for now. Long-term bulls can wait for some more correction (about 5% from here) before taking the plunge.
Results Today: Bilpower, Bombay Rayon, Chennai Petro, Grindwell Norton, ICRA, JK Lakshmi Cement, Man Industries, Motherson Sumi, Munjal Showa and Omnitech Info.
FIIs were net sellers of Rs12.24bn in the cash segment on Monday on a provisional basis, according to NSE web site. Local institutions were net buyers of Rs3.82bn. In the F&O segment, the foreign funds were net sellers of Rs9.83bn. FIIs were net sellers of Rs2.05bn in the cash segment on Friday, as per the SEBI data. Mutual Funds were net sellers of Rs2.05bn in the cash segment on the same day.
US stocks ended slightly higher on Monday, as a late-session reversal in technology companies and private-school operators offset lingering worries about Europe's debt crisis. All the three main US indices erased big losses after the euro rebounded from a four-year low and gained ground against the dollar.
The Dow Jones Industrial Average was up 5.67 points, or 0.1%, at 10,625.83, snapping a two-day losing streak. Out of 30 components, 15 ended higher.
For every stock on the rise, 1.5 fell on the New York Stock Exchange, where more than 1.4 billion shares traded hands. Composite volume topped 6.1 billion.
The blue-chip Dow average had spent nearly 90% of the day lower and had fallen as much as 184 points.
Consumer staples and telecom sectors also led gainers on the S&P 500 Index, which closed up 1.3 points, or 0.1%, to 1,136.94. Energy was the hardest-hit sector on the S&P 500, falling nearly 1%.
But it was a turn higher in consumer-discretionary shares, including a late-session rally in educational providers Apollo Group and DeVry, that helped turn the broader market around.
The technology sector also closed up higher with the Nasdaq Composite rising 7 points, or 0.3%, to 2,354.23.
Before posting gains, all three indexes were more than 1% lower but began to trim losses with an hour left in the session.
Earlier, the euro sank below $1.23, as euro-zone debt concerns weighed on investors. But the currency recovered its losses late in the afternoon. The euro stabilized near $1.24. It had declined as low as $1.2233 as the market considered the impact of budget cuts in countries on Europe's economic recovery.
US stocks had tumbled on Friday, as the Dow lost 1.5%, and S&P 500 and Nasdaq slipped about 2% on a weak euro.
After holding firm against the euro most of the day, the dollar fell 0.3% late in the afternoon. But the greenback was 0.3% higher against the British pound and rose 0.1% versus the Japanese yen.
US light crude oil for June delivery slid $1.53, or 2.1% to settle at $70.08 a barrel - a five-month high.
Gold prices continued to rise, gaining 70 cents, or 0.1%, to settle at $1,228.50 per ounce.
Treasury prices gave up gains Monday afternoon. The price of benchmark 10-year note edged lower, and its yield edged up to 3.49%.
A report from the Federal Reserve Bank of New York showed that manufacturing growth slowed in the region in May. The Empire State Manufacturing Survey's index fell to 19.1 from 31.9 in April. Economists expected the index to slip modestly to 30.
The National Association of Home Builders on Monday reported a gain in confidence among U.S. home builders in May, with the trade group's index hitting a 33-month high.
The Treasury said China boosted its holdings of US debt in March for the first time in six months, increasing them by 2% to $895.2 billion. With mounting concerns over European debt and a strengthening US economy, overall foreign holdings of Treasury securities rose by 3.5% to $3.88 trillion.
General Motors (GM) posted its first quarterly profit in nearly three years, earning $865 million on revenue of $31.5 billion. After emerging from bankruptcy last July, the company has trimmed costs and increased sales thanks to an improving economy and recall troubles at rival Toyota.
Hope improvement retailer Lowe's posted a profit that rose 2.7% from a year earlier and topped expectations as demand for big-ticket items improved. But the company's forecast for the second quarter came in lower than expectations, and shares of the retailer finished 3% lower.
European shares ended a choppy session down, dragged lower as a drop in commodity prices weighed on the mining sector and concerns about the future of the region's economy sent the euro to a four-year low versus the dollar.
After a 4.8% rise last week, the Stoxx Europe 600 index declined 0.1% to close at 248.09.
Oil producers had helped buoy European shares in earlier activity. BP shares temporarily rose after it provided investors with some hope that it's starting to control an oil spill in the Gulf of Mexico. BP said over the weekend that it was able to reroute some oil. But oil shares turned south as oil futures slumped.
The UK's FTSE 100 index ended virtually flat at 5,262.54. The German DAX index rose 0.2% to close at 6,066.92, while the French CAC-40 index fell 0.5% to settle at 3,543.55.
The Greek ASE Composite Index declined 1.4% to 1,634.61.
The euro traded at a four-year low against the dollar. It later trimmed losses to change hands at $1.2310, a loss of 0.4% from Friday.
Shares of life insurer Prudential was down 1.5% to 534.5 pence. The firm launched its delayed share sale to finance the acquisition of AIG's Asian business, AIA. Prudential said shareholders will be able to buy 11 new shares for every two they already own at a price of 104 pence a share.
The rights issue had been delayed while the company sought approval from the U.K. Financial Services Authority for the capital raising. Prudential is paying $35.5 billion for AIA, including $25 billion in cash.
Shares of hedge-fund manager Man Group dropped 8.8% after it said it has agreed to buy GLG Partners for $1.6 billion. The deal will create a firm with around $63 billion of funds under management.