Laziness is nothing more than the habit of resting before you get tired. - Jules Renard.
The bulls may have managed to hold the Nifty above the crucial 5300 mark on F&O expiry day but the NSE benchmark index might struggle to hold on to that level owing to weak global cues. The good news is that Asian markets, barring the Nikkei in Japan, have not reacted to the latest bad news coming out of the US and Europe. So, despite the overnight declines in the US and European markets, the Indian market could well manage to hold its own in line with the trend across Asia.
Still, one can’t look at India in isolation. Externally the situation remains wobbly. Global recovery will be painfully slow. It will have an effect on sentiment back home. At the same time, it could lead to stronger money flows into India. If raingods remain kind enough we could see much higher GDP growth.
High growth also means high inflation and high interest rates. Hopefully, the RBI will stick to its calibrated approach to tightening and inflation (especially food prices) will moderate in the coming weeks and months. Earnings have been generally pretty good and that momentum should remain in tact.
Global cues are not great to start with. If the European debt worries were not bad enough investors have been hit by a few disappointing US economic reports lately. The Fed too has scaled down its outlook, which has accentuated the uncertainty over the global economy.
The cost to protect against a Greek default rose to a new record on Thursday, while Spain's credit default swaps have been hovering near a record high. Gold has regained some more luster following a sudden spike in risk aversion. The revised US GDP numbers, anxiety over the Wall Street Reform bill and the G20 summit are the events to watch out for in the immediate future.
If Murli Deora has his way, we will finally have an EGoM meet later today on fuel prices. IT stocks might be in focus after Oracle and Accenture announced impressive earnings. Laziness may help in avoiding unnecessary purchases, especially considering the run-up we have had in June.
US stocks slumped on Thursday, as investors mulled mixed reports on the economy and a sell-off in bank shares as Wall Street reform talk move toward a close.
The Dow Jones Industrial Average fell 145.64 points, or 1.4%, to 10,152.80, in a move that echoed Tuesday's 149-point drop.
The Standard & Poor's 500 Index posted a fourth straight decline, its longest losing streak in seven weeks. The broad index ended down 1.7%, led by declines of more than 2% each in its consumer-discretionary, financial, energy and basic-materials sectors.
The Nasdaq Composite Index declined 1.6% to 2,217.42. The Russell 2000 tumbled 1.7% to 1,073.69.
Financial shares tumbled as Washington lawmakers moved closer to reaching a compromise on two different versions of the Wall Street reform bill. The KBW Bank sector index fell 2.2%.
Market breadth was negative and volume was pretty modest.
The euro was little changed versus the dollar, erasing earlier gains but remained well above the four-year low of $1.188 hit last week. The dollar was barely changed versus the yen.
US light crude oil for August delivery rose 22 cents to $76.51 a barrel on the New York Mercantile Exchange.
COMEX gold for August delivery gained $10.60 to $1,245.90 an ounce after closing at a record $1,258.30 last Friday.
Treasury prices fell, raising the yield on the 10-year note to 3.12% from 3.11% late on Wednesday.
US stocks fell one day after the Federal Reserve sounded a cautious tone on the economy. The Fed issued a cautious growth outlook on Wednesday. It downgraded its economic outlook, which is not good for the markets.
The central bank policymakers opted to hold interest rates steady at historic lows near zero, as expected. However, in the statement the bankers said that while the economy is recovering, growth is likely to stay moderate for a while.
Additionally, they were concerned about the weakness in the housing market and the "less supportive" financial conditions as a result of the European debt crisis.
In the day's main economic news, the number of Americans filing new claims for unemployment fell to 457,000 last week from a revised 472,000 in the previous week, the Labor Department reported. Economists expected 457,000.
Continuing claims, a measure of Americans who have been receiving benefits for a week or more, fell to 4,548,000 from 4,571,000. Economists expected 4,580,000 continuing claims, on average.
Durable goods orders fell 1.1% in May, the Commerce Department reported. That was better than the 1.3% drop that was expected. Orders rose 3% in April.
Orders, excluding transportation rose 0.9% in May versus forecasts for a rise of 1.3%. Orders ex-transportation fell 0.8% in the previous month.
On the upside, mortgage rates fell this week to the lowest level on record, a boon to individuals looking to buy a home or refinance. Freddie Mac said that the average rate for 30-year fixed loans fell to 4.69% from 4.75%.
JP Morgan Chase & Co. and Bank of America Corp. fell as House and Senate lawmakers sought to reach agreement on the final pieces of legislation that is expected to tighten oversight of the financial industry more than many had expected.
Offshore drilling stocks slipped after the US federal judge, who earlier this week overturned a six-month ban on deepwater drilling activity, denied a motion filed by the Obama administration to allow the ban to stay in place during the appeal process.
The judge also denied a motion by plaintiffs to enforce his own injunction. This means the government can file an emergency motion with the appeals court asking it to keep in place the drilling moratorium until the legal fight over the injunction is resolved.
Thousands of Apple fans lined up Thursday morning to buy the hugely anticipated iPhone 4, which is being released at Apple stores and other retailers Thursday including Wal-Mart Stores and Best Buy.
Google won a crucial copyright infringement battle with Viacom on Wednesday when a federal court ruled Google's YouTube isn't liable for its users' copyright violations. Viacom, which has been seeking more than $1 billion in damages, says it will appeal the ruling.
Oracle shares dipped ahead of its quarterly profit report, due out after the close.
Bed Bath & Beyond dropped 5.6% after its current-quarter earnings outlook fell below analysts' estimates.
Nike declined 4% after the athletic-shoe and apparel maker's revenue growth missed analysts' expectations.
Other retailers also dropped.
European shares finished lower with the Stoxx Europe 600 index falling 1.8% to 249.78 after losing 1.5% over the last two trading sessions. European banks, which are big holders of the region's government debt declined.
The focus on Europe's debt woes put Greece back in the frame. The cost of insuring Greek sovereign debt against default hit a fresh record high on Thursday. Greek stocks were the worst performers by a long way, with the Greek ASE Composite Index down 3.7% at 1,469.
The French CAC-40 index fell 2.4% to 3,555.36, the German DAX index lost 1.4% to 6,115 and the UK FTSE 100 index declined 1.5% to 5,100.23.
Miners also declined in European trading amid concerns about the global economic growth and on the long-term implications of a change of leadership in Australian on a proposed super-tax for the sector.