Dwell not upon thy weariness, thy strength shall be according to the measure of thy desire. - Arab Proverb.
After a weary Monday, looks like we are in for a much better start and perhaps an improved overall session. World markets did not react adversely to a couple of bad news emanating from Europe; this augers well for the bulls. Also, US stocks ended higher despite a disappointing report on home builders’ confidence, which fell to a 15-year low in July.
China's Shanghai Composite index, which stood out even yesterday, has extended those gains this morning. China’s stocks, the worst performers in Asia this year, probably ended a slump after reaching a low earlier this month, according to CLSA Asia-Pacific Markets. Other Asian markets, barring Japan, are stable to mixed if not in rally mode.
Given the backdrop, the market will kick off on a steady note with the NSE Nifty set to cross 5400. Whether it manages to build on a positive opening remains to be seen. The near-term range for the Nifty is likely to be 5300-5450. It may take a while before it convincingly pierces 5500. Key support is placed at around 5180-5200.
Corporate earnings (both local and global), RBI policy review (on July 27) and the outcome of European banks’ stress tests (this week) are the events to watch out for.
Results Today: Bombay Dyeing, JK Paper, Monsanto India, NIIT Tech, Noida Toll Bridge, Omnitech, Panacea Biotec, SKF India, Sonata Software, Tata Coffee, United Spirits and Zee Entertainment.
FIIs were net buyers of Rs1.54bn in the cash segment on Monday (provisionally), according to the NSE web site. Local funds were net sellers of Rs2.61bn. In the F&O segment, they were net sellers at Rs9.25bn. On Friday, the FIIs were net buyers of Rs7.59bn in the cash segment.
The Asian Development Bank (ADB) has urged the region’s economies, including China, to allow greater currency strengthening to help cope with capital inflows and enable a more gradual pace of interest-rate increases that can support growth.
The MSCI Asia Pacific Index fell to its lowest level in almost two weeks today after US home-builder confidence dropped more than forecast, renewing concern that a global economic recovery is losing steam.
Japan’s market was shut for a public holiday yesterday, when the MSCI Asia Pacific excluding Japan Index fell 1%.
US stocks recovered from a slow start to end with modest gains as investors turned their attention to quarterly earnings, and chose to ignore a downbeat report on home builders' confidence.
The Dow Jones Industrial Average closed up 56.53 points, or 0.6%, to 10,154.43, capping a choppy day that sent the index nearly 90 points higher intraday as well as into the red.
Of the 30 Dow components, eight closed lower.
The S&P 500 Index closed up 6.37 points, or 0.6%, to 1,071.25, with utilities and tech leading all 10 industry groups higher. The Nasdaq Composite Index added 19.18 points, or 0.9%, to 2,198.23.
For every stock on the decline nearly two were rising on the New York Stock Exchange, where nearly 956 million shares traded hands. Volume was light, amounting to 74% of its 30-day average.
The dollar was down against the euro, but up versus the British pound and the Japanese yen.
US light crude oil for August delivery rose 50 cents to settle at $76.51 a barrel.
COMEX gold's August contract fell $4.40 to end at $1,183.80 per ounce.
Treasury prices fell, pushing the yield on the 10-year note up to 2.96% from 2.93% late on Friday.
US stocks opened higher and struggled to gain momentum for most of the day. But the major indexes rallied in the afternoon as investors geared up for key corporate results later this week, including reports from Microsoft, AT&T, Coca-Cola and American Express. Earnings are also due from Apple, Wells Fargo, Ford Motor and UPS.
The National Association of Home Builders said that its index of builder confidence in the market for new single-family homes fell in July to the lowest level since April 2009. The Housing Market Index fell two points from a downwardly revised number in the previous month to 14 for July, according to NAHB.
NAHB chairman Bob Jones said that the decline in builder confidence reflects the expiration of a popular tax credit, tight credit conditions and persistently high unemployment.
Shares of home builders fell after the NAHB's release.
Shares of Apple slid amid ongoing controversy over its iPhone 4 as it prepares to release quarterly results on Tuesday.
Intel led the Dow with a 2.7% gain. Reports said that the chipmaker has reached an initial agreement with the Federal Trade Commission that will give it less flexibility in marketing its products but not cost it any money.
Boeing shares gained after the jet maker disclosed a pair of big orders from Emirates and General Electric.
Bank of America fell the most among the blue chips after analysts trimmed their outlooks for the bank after reviewing its earnings released last week.
IBM shares rose ahead of its results, out after the close. After the market closed, IBM reported earnings per share that beat analysts' expectations, but second-quarter revenue fell short of the mark.
Shares of the tech giant sank 5% in extended trading.
Halliburton reported quarterly results that exceeded Wall Street's expectations. The upbeat report lifted Halliburton shares 6% and supported stocks in other oil-services firms.
Toymaker Hasbro reported a rise in earnings but a drop in sales, feeding worries about the impact of unemployment on consumer spending. Hasbro shares ended down 0.4%.
Airline stocks were hit after Delta Air Lines reported revenues that fell short of expectations. Delta shares fell 2.9% and US Airways Corp. shares ended down 3.7%.
Motorola climbed 5.6% after Nokia Siemens Networks said it plans to buy the majority of Motorola's wireless network division for $1.2 billion in cash.
BP shares fell 6% after comments from a US official raised questions about pressure levels in the ruptured well in the Gulf of Mexico.
AIG named Mark Tucker, the former CEO of Prudential, as head of it its Asian life insurance business.
Moody's Investors Service cut Ireland's government bond ratings to Aa2 from Aa1, citing weakening growth prospects and mounting debt.
The downgrade was "primarily driven by the Irish government's gradual but significant loss of financial strength, as reflected by its deteriorating debt affordability," said Dietmar Hornung, Moody's lead analyst for Ireland.
Moody's warned that the country is looking at a slow climb from recession amid escalating costs from bailing out its banks. Ireland's ratings cut came one day before the scheduled sale of as much as 1.5 billion euros of Irish debt.
Meanwhile, talks between Hungary and the International Monetary Fund (IMF) reached an impasse over a $25 billion aid package the country accepted in 2008 from the IMF and European Union.
Of the American companies that have reported so far, about 75% have beaten earnings expectations and 71% have topped revenue forecasts. Including those that reported on Monday, a total of 122 companies are slated to post results this week.
Investors are also bracing for key economic data this week, including reports on housing starts and building permits on Tuesday morning. A report on existing home sales comes out later in the week.
Last week, a drop in consumer sentiment, along with weak earnings from financial firms Bank of America and Citigroup pressured stocks at the end of the week and dragged the Dow down by 261 points on Friday.
European stocks finished lower with the Stoxx Europe 600 index falling 0.8% to 246.18. The index gave up its earlier gains after a monthly survey found that American home builders grew more pessimistic in July.
France's CAC-40 index fell 0.4% to 3,486.33 and the U.K. FTSE 100 index dropped 0.2% to 5,148.28. Germany's DAX index slipped 0.5% to 6,009.11.
BP shares declined amid reports that its talks to sell half its Prudhoe Bay stake to Apache stalled twice over the weekend.
BP said that the cost of the response to the oil spill in the Gulf of Mexico to date amounts to approximately $3.95 billion. It is also concerned about seeping gas from the well it's temporarily capped.
Shares of European aircraft maker Airbus were up after the company announced more than $9 billion worth of orders for its best-selling A320 family jets from two leasing companies.