Freedom in general may be defined as the absence of obstacles to the realization of desires - Bertrand Russell.
The Indian market has yet to achieve freedom from the range it has been stuck in for quite a while now. While a breakout is long overdue, no sharp and swift moves are expected this week. The bulls will have to be a little more patient as the external situation remains murky. One good thing is that our market hasn’t cracked despite a series of bad global cues. At the same time that leaves it slightly vulnerable to some correction.
The overall bias towards India remains positive if the inflow of overseas capital is any indication. Inflation continues to be the biggest bugbear and may continue to cast a shadow on the markets for some time to come. July inflation will be out today and will be closely followed, for anticipating the next RBI action. Counters outside the main indices have been buzzing and the trend is likely to continue for a while.
The NSE Nifty last week bounced back from support of ‘rising wedge’ to close in positive terrain above 5450 levels and in process has formed higher top and higher bottom, says IIFL's Technical Analyst Amit Harchekar. The resistance line of ‘rising wedge’ corresponds at levels 5530 where one needs to exhibit caution and any close below 5400 levels will provide confirmation of a breakdown, he adds. Most technical experts see resistance upwards of 5500 and support near 5370. The broad trading range for the Nifty remains 5300-5600.
Shares of SKS Microfinance Ltd. will list today.
Shares of Cairn India could continue to gain amid the reported deal with Vedanta. Also, there are reports that Cairn India may have stumbled upon a major oil discovery onshore KG Basin.
Economic data points from key geographies will keep the markets on tenterhooks during the course of the week. UK will release this week data on consumer price inflation and retail sales. The latest US industrial production and capacity utilisation statistics are due to be published by the Federal Reserve. Data on CPI, along with a couple of housing reports are also due this week in the US. The latest monthly balance of payments figures for the eurozone are due to be announced by the European Central Bank. Australia will go to the polls on August 21.
Results from several big companies in the US, Europe and elsewhere will also be announced this week. Consumer spending in the US will be in focus as some of the biggest US retailers, including Wal-Mart and Home Depot, deliver their most recent quarterly results. Technology giants Hewlett-Packard and Dell will also release their results this week.
Barring China, most other Asian markets are down, with the region’s benchmark index dropping to a three-week low. The yen and the dollar strengthened after Japan’s economy expanded more slowly than economists estimated. Copper futures rallied.
Japan’s economy grew at less than a fifth of the pace economists estimated last quarter, pushing it into third place behind the US and China and adding to evidence the global recovery is faltering.
Asia (ex-Japan) remains in a good shape though, with China leading the pack even as the US economy has hit a soft patch. Though euro-zone GDP data came in ahead of estimates, most of that was propped up by Germany. Also, the region’s debt problems are not entirely settled as was shown by lackluster demand for Italy’s government bonds on Friday.
FIIs were net buyers of just Rs501.5mn in the cash segment on Friday (provisionally), according to the NSE web site. Local funds were net buyers of Rs333.8mn. In the F&O segment, they were net buyers at Rs12.15bn on Friday. Foreign funds were net buyers of Rs4.49bn in the cash segment on Thursday, according to SEBI's web site. Mutual Funds were net sellers at Rs1.4bn on the same day.
US stocks ended lower on Friday, the fourth consecutive day of declines, as investors digested another round of disappointing economic reports in the retail and consumer sectors.
The Dow Jones Industrial Average fell 17 points, or 0.2%, to end at 10,303.15. The S&P 500 lost 4 points, or 0.4%, to settle at 1,079.25 and the Nasdaq index was down 17 points, or 0.8% at 2,173.48.
All three indexes had been trading on either side of breakeven in morning trade.
Quite a few Wall Street traders are on vacation, and that tends to result in wild movements in the indices.
Stocks closed lower for a third straight session on Thursday, as investors digested an unexpected rise in jobless claims and Cisco Systems' cautious outlook. After slight gains Monday, all three stock indexes closed lower from Tuesday to Friday amid a raft of downbeat economic reports and some tepid earnings results.
The Dow lost 3.3% over the week, the S&P fell 3.8% and the Nasdaq plummeted 5%.
Stocks were also under pressure throughout the week after a Tuesday report from the Federal Reserve, which gave its most bearish outlook in more than a year and said that the economic recovery is weakening.
The Dow snapped a three-week winning streak, representing its biggest weekly decline since the week ended July 2.
The S&P 500 had its second week in the red out of the past three weeks. The S&P 500 has declined 3.21% this year. The Nasdaq is now off 4.22% for the year.
Friday's stock declines came despite small increases in US retail sales and consumer sentiment. The sales growth was driven by sales of cars and gasoline, while demand fell in many other categories, adding to investors' recent worries about the sustainability of the economic recovery.
Meanwhile, a bigger-than-expected rise in US business inventories came as sales fell, suggesting that the growth in stockpiles was involuntary.
The dollar gained against the euro, the UK pound, but fell versus the Japanese yen.
Oil futures for September delivery fell 35 cents to settle at $75.39 a barrel.
Gold futures for December delivery fell 10 cents to settle at $1,216.60 an ounce.
Prices for Treasurys were higher. The 10-year yield hovered near a 16-month low of 2.69% on Friday from 2.75% late on Thursday.
A report from the Commerce Department said that July retail sales gained 0.4%, just missing economists' forecasts.
The Labor Department's July Consumer Price Index, a key measure of inflation, snapped a three-month streak of declines and ticking slightly higher than economists expected.
A report released later in the morning showed business inventories had edged up 0.3% in June.
The University of Michigan Consumer Sentiment Index for early August rose to 69.6 from 67.8 the previous month, just missing expectations.
IBM said that it will purchase software firm Unica for $480 million, offering a whopping 120% premium for the marketing analytics company.
General Motors (GM) is expected to announce a stock offering as early as Friday to bring the company public again - a day after the automaker said that it is getting its fourth CEO in just under 18 months.
Dell was accused of refusing to comply with court orders to reveal secret documents in an ongoing dispute with client Advanced Internet Technologies over allegedly faulty computers.
JC Penney shares dropped after the department-store retailer swung to a profit in the second quarter. But, it gave a cautious third-quarter earnings and revenue forecast and cut its earnings target for the year.
Eli Lilly declined after the pharmaceutical company said that it lost its patent dispute over attention-deficit hyperactivity disorder drug Strattera, opening the gates for a generic to hit the market.
Nvidia shares climbed after the graphics-chip maker's fiscal second-quarter loss widened on higher charges, but revenue climbed.
Rambus shares advanced after the company that designs and licenses memory chip technology, reached a patent-licensing agreement with Nvidia regarding certain memory controllers, although litigation between the companies remains outstanding.
Autodesk shares rose after the design-software company's fiscal second-quarter profit surged following year-earlier restructuring charges as revenue jumped.
Nordstrom shares sank after the upscale retailer's fiscal second-quarter earnings rose 39%, right where analysts expected. But investors were disappointed with weakness in its expanding discount-store channel.
European shares ended slightly higher on Friday, as strong regional economic data was countered by ongoing worries about euro-zone sovereign debt. The Stoxx Europe 600 index rose 0.2% to close at 255.56 in a choppy session dominated by data from both sides of the Atlantic.
The euro-zone economy grew at its fastest quarterly pace in four years in the second quarter, boosted by much stronger-than-expected German growth.
Telecom, which are less leveraged to growth than some other sectors, performed well for the second straight session. Retailers were among the worst performers in Europe.
The UK's FTSE 100 index rose 0.2% to close at 5,275.44, the French CAC-40 index declined 0.4% to end at 3,610.91, and the German DAX index gave up 0.4% to settle at 6,110.41. The Irish Iseq 20 index fell 1.4%, with banks declining.
Sovereign-debt worries resurfaced in the euro zone last week as peripheral bond yields rose. The rise in yields came amid growing concern about the cost of bailing out Ireland's banking sector. Sovereign worries were further reinforced by weak demand at an Italian government bond auction.
The euro fell versus the dollar.
Germany's ThyssenKrupp said it swung to a fiscal third-quarter net profit of €272 million from a loss of €639 million in the year-earlier period, beating analyst forecasts for a €188 million profit.
The steel maker said its performance "has improved notably" through the fiscal year so far, with order intake and sales increasing quarter by quarter, and it now expects a significant improvement in earnings compared to the previous fiscal year.
Shares of TUI Travel climbed after Goldman Sachs lifted its stance on the firm to buy from neutral on valuation grounds.