For many men that stumble at the threshold are well foretold that danger lurks within.- William Shakespeare.
The market may be at the threshold of yet another technical breakout, but given the murky global outlook, the bulls may just remain standing. A flat start and a possible listless session for the overall market is what we have in store.
The US market has been struggling lately amid a few downbeat economic reports and a subdued Fed outlook. Though any fresh bad news from Europe has not hit the headlines, the situation there remains fragile. Japan too is not doing particularly well and China is battling its own demons.
One can safely assume that India is perhaps among the best bets if not the best. There is no denying the fact that India has to grapple with its own set of issues. Double-digit inflation is set to only increase following the fuel price hike. Monsoon has been erratic as usual. Still, India is poised for at least 8% growth in FY11. Earnings have held up quite well and can only get better. That makes it difficult for anyone to avoid India as a growth market.
While market watchers see the NSE Nifty advancing further, it will find resistance at 5400 before it gets to 5500. Non-index counters will continue to attract attention. Support for the Nifty stands at 5200 and around 5000 if there is a deeper sell-off.
Shares of Samruddhi Cement will be listed today post the restructuring of Grasim Industries. IDFC and Godrej Consumer will be in focus as they are reportedly in the market with their QIPs. Sterlite will be another stock to keep an eye on amid news that the Centre may clear its Orissa bauxite mining proposal.
Tyre companies may come under pressure owing to a spike in natural rubber prices. Technofab IPO will kick off today. Aster Silicates IPO has been subscribed over 4 times.
The FIIs were net buyers of Rs7.93bn in the cash segment on Monday (provisionally), according to the NSE web site. Local funds remain cautious and were net sellers of Rs948.8mn. In the F&O segment, they were net buyers at Rs5.28bn. On Friday, the FIIs were net buyers of Rs2.84bn in the cash segment.
Shares bought on June 30, should not be sold on July 01, as trades done on both these days will be settled together on July 5. Also, the Pay-in Pay-out schedule has changed for stocks sold on June 30 and July 01 to 10.00 a.m. and 2.00 p.m on July 05, respectively.
US stocks gave up solid gains to close basically flat amid some worries that the Group of 20's pledge to cut deficits could hurt the ongoing global economic revival. Technology stocks started the week on a mixed note.
Stocks struggled for direction throughout the session as investors considered a pledge from world leaders to cut public deficits over the next few years. They still welcomed a slight increase in personal spending but remained on guard ahead of key economic reports due later this week.
The Dow Jones Industrial Average shed more than 50 points in the last hour of trading to end down 5.29 points, or 0.1%, at 10,138.52. The Nasdaq Composite Index fell 0.1% to 2,221. The S&P 500 Index declined 0.2% to 1,075.
Tuesday brings reports on home prices in 20 major US cities and a key measure of consumer confidence. Manufacturing reports are due later in the week and the US government's closely-watched monthly jobs report comes out on Friday.
Bond prices rallied, pushing the yield on the 10-year Treasury note to 3.032%, the lowest level since April 2009. The 30-year bond's yield has been flirting with the key 4% level.
The dollar was higher against the euro, but was flat versus the British pound and Japanese yen. The dollar index, which tracks the US currency against a basket of six others, rose 0.5%.
US light crude oil for August delivery eased 90 cents to $77.96 a barrel.
COMEX gold's August contract fell $16.60 to $1,239.20 per ounce.
Leaders of the world's 20 key economies agreed to ambitious targets for getting deficits under control, pledging to cut them in half by 2013, according to a statement made following the G20 summit over the weekend in Toronto.
But the leaders acknowledged that progress on deficit reduction will take more time for some countries, and included a special provision for Japan, which is heavily reliant on external borrowing. The G20 nations also pledged to stabilize their debt by 2016.
Consumer staples were among the best performers after a report on personal spending came in somewhat better than expected and the Supreme Court issued a decision that will benefit tobacco companies.
Bank stocks were lower as investors continued to digest the Wall Street reform bill Congress finalized last week. Lawmakers are expected to vote on the sweeping overhaul this week and send the bill to President Obama in July.
Before the open, the Commerce Department reported that personal income rose 0.4% in May, while personal spending edged up 0.2%. The government was expected to report that personal income rose 0.5% in May after climbing 0.4% in April.
Personal spending was expected to have risen 0.1% from a flat reading in April.
Tobacco companies Altria and Philip Morris rose after the Supreme Court refused to hear an appeal over the government's ability to collect $280 billion from the industry for alleged fraud in its marketing.
The Supreme Court also ruled unconstitutional a long-standing ban on hand guns in Chicago. Smith & Wesson Holding Corp. shares jumped 5.6%.
A divided Supreme Court also struck down some provisions that created a private regulatory body to inspect and discipline public-company accountants. Still, the relatively narrow ruling leaves intact most of the Sarbanes-Oxley Act, passed in 2002 to combat corporate-accounting scandals.
The telecom sector was a bright spot after US President Barack Obama signed a memorandum to nearly double the amount of federal and commercial spectrum available for smart phones and wireless Internet devices. Sprint shares gained 6%.
Noble announced plans to buy FDR Holdings, an independent drilling company, in a cash transaction that values Frontier at $2.16 billion. Shares of Noble rose 2.4%.
Shares of BP rose after the oil company said it has spent $2.65 billion on costs related to the spill in the Gulf of Mexico.
European shares rose amid sustained strength in auto makers and commodity-sector firms even as Morgan Stanley European equity strategists said that low valuations and sentiment should limit downside for regional stocks.
The Stoxx Europe 600 index gained 1.2% to 251.36. The UK FTSE 100 index rose 0.5% to 5,071.68, the German DAX index added 1.4% to 6,157.22 and the French CAC-40 index advanced 1.6% to 3,576.45.