Dull start, sideways session

It is the dull man who is always sure, and the sure man who is always dull. – HL Mencken.

You can’t be sure whether the nationwide ‘Bharat Bandh’ was successful or not is. The market remained dull and the story will continue today. The UPA has made it clear it is in no mood to yield to Opposition pressure on the issue of fuel prices. But, the fact remains that inflation is a major issue and the Government needs to take concrete steps to curtail the same; mere ad-hoc measures will not suffice. Monsoon may help soften the blow on inflation over the coming months, but in the near term one has no option but to endure the pain.



Back to the markets, we expect a slightly lower start. With the US markets shut for ‘Independence Day’, world markets are expected to remain sluggish. The key indices in India may remain sideways. The NSE Nifty is likely to swing between 5200 and 5350 in the near term. Non-index counters may remain abuzz but one should deal with this space cautiously. One key concern is that FIIs have turned net sellers in the past couple of sessions. Results will start pouring in from next week. IIP data and monthly inflation are other big events to keep an eye on.

Asian stocks are mixed today, with the MSCI Asia Pacific Index lower for the fifth time in six days, as disappointing reports on the service sector from China to Euro-zone increased concerns over the global economic recovery.

The MSCI Asia Pacific Index fell 0.8% to 110.96 as of 9:51 a.m. in Tokyo. The index has fallen 13% from its high this year on April 15 on concerns that Europe’s debt crisis and Chinese steps to curb property prices will hurt global growth.

Japan's Nikkei 225 stock average ended the morning session down 0.9%. Hang Seng is slightly down while the Shanghai Composite index has rallied after flaling to a new 15-month low yesterday.

European shares closed slightly lower after struggling for direction amid lingering worries about the debt-strapped region's economic prospects, although oil giant BP manage to gain ground.

British shares ended down as well with declines in miners and banks offsetting gains in BP.

The Stoxx Europe 600 index fell 0.2% to close at 236.88, after dipping in and out of positive territory through the session in a similar performance to Friday. The index had lost 4.5% last week.

A report from HSBC and Markit Economics showed that growth in Europe’s services and manufacturing industries slowed for a second month in June.

Germany's DAX index fell 0.3% to close at 5,816.20. The UK FTSE 100 index ended 0.3% lower at 4,823.53, while the French CAC-40 index declined 0.5% to finish at 3,332.46.

In the currency markets, the Polish zloty gained against the dollar and the euro, as Bronislaw Komorowski reportedly won a narrow victory in the presidential election.

However, the dollar gained against the euro and sterling.

BP shares rose 3.5%. The Sunday Times newspaper reported that the UK firm has launched a search for a strategic investor to help secure its independence.

Shokri Ghanem, Chairman of Libya's Nation Oil Co., was quoted as saying that he will recommend buying a stake in BP to the Libyan Investment Authority to take advantage of the firm's weak share price.

BP's shares have plunged since April 20, when an explosion on the Deepwater Horizon rig triggered a massive oil spill in the Gulf of Mexico. On Monday, BP put the cost of its response to the spill at $3.12 billion.

The MSCI World Index of stocks in 24 developed countries retreated 0.3% today, heading to its 9th decline in 11 days.

Canada’s benchmark stock index sank to its lowest level in eight months as oil producers declined, and Brazil’s Bovespa declined for the first time in three days on concern that higher borrowing costs will slow economic growth.

Futures on the Standard & Poor’s 500 Index were down 1%. US markets were closed yesterday for Independence Day.

The US stock market will begin the holiday-shortened week in a precarious state, with the third quarter off to a poor start and the S&P 500 Index perilously close to breaching 1,000.