Dull December...zzzzzzzzz

Truth makes many appeals, not the least of which is its power to shock. - Jules Renard.

Just when one was hoping that the "scam-tainted" 2010 would probably end on a happy note, comes another shocker. Citigroup has been hit by a fraud in its Gurgaon branch. It might not have a wider impact on the market sentiment but surely adds to the worries linked to the lack of governance – in both government and corporates.



As far as the market is concerned, the lackluster and rangebound pattern of December will continue. Traded volumes, which have been disappointing of late, could get some boost thanks to the F&O expiry on Thursday.

The broader market may fare a bit better than the Large Caps in the near term. But, be careful while dealing in illiquid and dodgy counters. Not too much should be made of the excruciatingly dull markets as movements are exaggerated either higher or lower. As the volatility ebbs, wide move of 100 points is expected on the breakout beyond 5970-6020.

Globally, things remain quiet amid light volumes. US stocks finished mixed in the face of a couple of not-so-good economic statistics. European markets ended in no-man’s-land while Asian markets are clueless this morning. Global markets will continue to see muted action in the near term owing to the year-end factor. However, global commodity markets are exhibiting some interesting moves.

Real action is expected in January when markets will digest latest quarterly results, along with fresh economic statistics. The RBI’s quarterly review will also be an important event in the face of the fresh upturn in inflation. Political war of words is likely to continue and there are a few concerns on what impact it will have on the Budget session.

FIIs were net buyers of Rs 1.09bn in the cash segment on Tuesday, according to the provisional NSE data. The domestic institutional institutions were net sellers at Rs 2.65bn. FIIs were net buyers of Rs 1.8bn in the F&O segment on the same day. The foreign funds were net buyers of Rs 2.66bn in the cash segment on Monday, according to the SEBI web site.

Asian Markets on Wednesday:

Asian stock indices were trading mostly mixed in early morning trade on Wednesday, with the Chinese benchmark index in Shanghai continuing to witness choppy moves in the wake of the recent rate hike by its central bank.

The Nikkei in Tokyo was up ~0.2% at 10,309 while the Shanghai SE Composite index in China was down ~0.2% at 2,728 after hitting a day's low of 2,726 and a day's high of 2,744.

South Korea’s Kospi Index was up ~0.3% at 2,039. The Taiex in Taiwan was down ~0.1% at 8,861 while the Straits Times index in Singapore rose ~0.4% at 3,195. The S&P/ASX 200 index in Australia was down ~0.4% at 4,760.

The MSCI Asia Pacific Index was trading near a two-and-a-half-year high, as oil and gold companies gained after prices of the commodities climbed.

The regional benchmark was little changed at 136.08 as of 11:33 a.m. in Tokyo, with about five stocks advancing for every three that declined. It is up 13% year-to-date, when it closed at the highest level since July 2008.

Taiwan's market was down on speculation that policymakers will increase borrowing costs tomorrow for the third time this year to curb gains in property prices and tackle accelerating inflation.

The dollar traded near a six-week low against the yen as US data signaled an uneven recovery in the world’s largest economy. The US currency was close to a seven-week low against the Australian dollar.

The euro fell against all of its 16 major counterparts after the European Central Bank (ECB) said that it failed to fully neutralize the extra liquidity created by its bond purchases for a second time since the program began in May.

The Swiss franc strengthened to a record against the dollar and snapped a three-day decline versus the euro after a government report showed that French economic growth slowed more than originally estimated.

Sugar futures extended a rally to a 30-year high on mounting concern that dry weather in Brazil, the world’s biggest producer, and record rainfall in Australia will slash worldwide supplies.

Gold declined for the first time in four days as some investors sold the precious metal before the end of the year to take advantage of its rally to a two-week high. Silver fell from a three-week high.

Crude oil settled near a 26-month high after a report showed that US retailers had their best holiday sales in five years and crude supplies were forecast to extend their biggest monthly decline since December 2006.

US Markets on Tuesday:

US stock indices finished mixed on Tuesday as a couple of disappointing economic reports raised some concerns on the health of the world's largest economy amid persistent weakness in the crucial housing sector and muted consumer confidence.

The Dow Jones Industrial Average rose 20.51 to end at 11,575.54, with 19 of its 30 components rising.

The S&P 500 Index closed virtually flat at 1,258.51, with the energy sector up the most and telecommunications space knocked the hardest among the index’s 10 industry groups.

The Nasdaq Composite Index declined 2.55 points to 2,664.72.

Decliners and advancers ran nearly even on the New York Stock Exchange, where 560.2 million shares traded. Volume was 57% of the 30-day average, according to data from FactSet.

Historically, US stocks advance during the final week of the year, a pattern generally referred to as a Santa Claus rally. But stocks have been rallying since late August, when Federal Reserve chairman Ben S. Bernanke said that the central bank was ready to take 'unconventional measures' to prop up the economy.

The Case-Shiller index of home prices tumbled for October, with six cities falling to their low points of the housing downturn. Home prices dropped 1.3% in October from the prior month, and fell 0.8% year over year.

Economists were expecting prices to edge up 0.1% from a year earlier.

Consumer confidence took an unexpected step backward in December, with Americans more concerned about the overall state of the economy and the grim prospects for jobs.

The Conference Board said that its reading on consumer confidence slipped to 52.5 in December from 54.3 the month before. Economists were expecting the index to have risen to 56.1.

Late on Monday, a report from MasterCard Advisors' SpendingPulse data service showed a 5.5% increase in retail sales in the period from Nov. 5 to Dec. 24, as consumer spending continued to make a comeback.

The report is based on charges rung up on MasterCard credit cards as well as a survey of sales made by cash or check.

The weekend's blizzard could cut into holiday sales, with analysts at NPD Group saying that retailers could lose about 0.5% of holiday sales due solely to the storm.

A separate survey from the International Council of Shopping Centers and Goldman Sachs found chain-store sales rising 4.8% last week from the year-ago period.

Also, a SpendingPulse report pointed to the best holiday season in five years as consumers sprung for clothing and jewelry at retailers including Tiffany & Co. and Macy’s Inc.

Electric car maker Tesla Motors rose 3%, a day after its stock tumbled 15%. Monday was the first day that large investors in the company's June IPO could sell shares, and they took advantage of a 70% run-up from the initial pricing.

Shares of Apple inched up slightly. A new lawsuit seeking class-action status accuses the iPhone and iPad maker of enabling advertisers to track how users interact with applications.

European Markets on Tuesday:

European stock indices closed nearly unchanged on Tuesday in a volatile session, as early weakness on Wall Street spilled over into the continental markets amid thin volumes.

The Stoxx Europe 600 index rose 0.2% to 279.8, a day after breaking a string of winning sessions. The regional benchmark lost 2.25 points, or 0.8%, on Monday, the biggest one-day point and percentage loss since late November.

The CAC 40 index ended flat at 3,858.7. The German DAX 30 index, which suffered its lowest close on Monday since Dec. 20, finished near neutral at 6,972.1.

London markets were closed on Tuesday as well for a bank holiday. UK markets have been closed since midday on Dec. 24 for the Christmas break.

Shares of Alcatel-Lucent SA added 1.9% on relief after the Paris-based telecommunications company settled a bribery case with US regulators. The Securities and Exchange Commission said that Alcatel-Lucent will pay $137 million to settle U.S. charges that it paid bribes to win business in Latin America and Asia.

Auto stocks again weighed on the downside. Auto stocks got hit hard on Monday, notably in Germany, as the market reacted to the weekend interest-rate hike in China. Also, Beijing’s municipal government will limit the number of new cars in the city.