Finally some year-end cheer

"Winning isn't everything, but the will to win is everything." - Vince Lombardi.

After a long time we had a decent session as the bulls re-discovered their winning ways and volumes improved ahead of the F&O expiry. There could be a bit of extra volatility owing to the derivative settlement. The opening is likely to be a positive one, and the key indices could extend gains from the previous session.



The Nifty broke out of the 5970-6020 range to close above 6050. But, one needs to exercise some caution as the bulls might face resistance at higher levels. The rangebound and light volume pattern of the last couple of weeks has been frustrating. Hopefully there will be some excitement before we bid farewell to 2010.

Oil companies will be in focus as the much-anticipated EGoM on diesel and LPG price hike has been postponed again. Keep an eye on the weekly inflation numbers. Shares of Punjab & Sind Bank will be listed today after a fairly successful IPO.

Asian markets are pretty much mixed. Silver and copper continue to shine. Crude oil is hovering near $91. US stocks ended at new two-year highs even as the dollar ceded some ground.

London shares dipped on resumption after a long Christmas break. Other European stock markets advanced, helped by a rally in gold miners.

FIIs were net buyers of Rs 5.47bn in the cash segment on Wednesday, according to the provisional NSE data. The domestic institutional institutions were net sellers at Rs 1.7bn. FIIs were net buyers of Rs 20.60bn in the F&O segment on the same day. The foreign funds were net buyers of Rs 1.49bn in the cash segment on Tuesday, according to the SEBI web site.

Asian Markets on Thursday:

Asian stock indices were trading mixed in early morning trade on Thursday, with the Chinese benchmark index in Shanghai continuing to witness choppy moves after a private survey showed drop in manufacturing activity.

The Nikkei in Tokyo was down ~1.2% at 10,215 while the S&P/ASX 200 index in Australia was up ~0.3% at 4,788.

The Shanghai SE Composite index in China was down ~0.5% at 2,738 after hitting a day's low of 2,734 and a day's high of 2,751.

China's manufacturing activity continued to expand in December, but the pace of growth slowed to a three-month low, according to the outcome of a survey by HSBC.

China's purchasing managers' index (PMI) for December came in at 54.4 as against November's reading of 55.3.

A reading above 50 denotes expansion while anything under it implies contraction.

Average input prices continued to rise during the month, but "although still substantial, the rate of input-cost inflation eased to the slowest in three months," HSBC said in a statement.

South Korea’s Kospi Index was virtually flat at 2,043. The Taiex in Taiwan was up ~0.2% at 8,885 while the Straits Times index in Singapore rose marginally to 3,210.

The MSCI Asia Pacific Index rose 0.3% to 137.25 as of 9:44 a.m. in Tokyo, with more than three times as many stocks declining as advancing. It is up 14% year-to-date and on Wednesday closed at the highest level since June 2008.

The US dollar weakened to a seven-week low against the yen, damping the outlook for Japanese export earnings. Commodity companies rose.

The dollar fell against the yen for an eighth straight session yesterday, the longest streak since 2004. It depreciated to 81.40 yen today, the lowest intraday level since Nov. 9.

A weaker dollar reduces the value of US income at Japanese companies when converted into their home currency.

The yen is headed for its strongest annual average level against the dollar since currencies began trading freely in 1971.

US Markets on Wednesday:

US stock benchmarks gained modestly with the Dow Jones Industrial Average closing at a new 28-month high even as volume remained abysmally low due to severely cold weather.

After closing at its highest level since Aug. 28, 2008, the Dow ended up 9.84 points, or 0.09%, at 11585.38. Seventeen of the Dow’s 30 components gained.

Up for a third straight session and by 13% for the year, the S&P 500 Index gained 1.27 points, or 0.1%, to 1,259.78, with energy companies gaining the most and financials ranking as the biggest laggard.

The Nasdaq Composite Index rose 4.05 points, or 0.15%, at 2,666.93.

Advancers outpaced decliners 19 to 11 on the New York Stock Exchange, where volume hit 520 million shares, just over half of the 30-day average.

There were no economic reports scheduled for the day.

Trading volume is likely to remain muted for the rest of the week as the Northeast continues to recover from a severe snowstorm and many traders are off for the holidays.

Stocks have climbed 6% in December, and are on track to post double-digit percentage gains for the year. For 2010 overall, the Dow is up about 11%, the S&P 500 is up nearly 13% and the Nasdaq is up nearly 18%.

With 2010 ending on a high note for equities, investors are now the most bullish they have been since 2004. Some experts expect the rangebound trading to be resolved next week.

The dollar fell against the euro, the British pound and the Japanese yen.

Crude oil for February delivery slipped 37 cents to settle at $91.12 a barrel, but was still near two-year highs as investors anticipate a boost in energy demand in 2011.

Gold futures for February delivery rose $7.90 to settle at $1,413.50 an ounce.

The price on the benchmark 10-year U.S. Treasury rose, pushing the yield down to 3.36% from 3.48% late on Tuesday.

Energy giants, including Chevron, ConocoPhillips and Exxon Mobil all posted fresh 52-week highs in mid-session trading, but pared back those gains in late afternoon trading.

Bank of America's stock fell in afternoon trading, paring back losses from earlier in the morning. Allstate filed a lawsuit against the bank and its Countrywide Financial unit for more than $700 million in mortgage-backed securities that the insurance giant had purchased.

The suit also named former Countrywide CEO Angelo Mozilo, who agreed to pay $67.5 million to settle fraud charges in October.

Shares of Sears Holdings rose 6.3% - a day after the company announced it has launched its own online movie download service, Alphaline Entertainment. Sears plans to sell the service embedded in portable media players, Blu-ray DVD players, mobile phones and high-definition televisions.

BJ's Wholesale Club stock rose 7.1%, after the New York Post reported that Los Angeles-based firm Leonard Green & Partners LP may make a hostile bid for the company.

A district judge ruled that the German-based business software maker SAP will have to pay rival Oracle millions of dollars in interest on the $1.3 billion copyright infringement verdict. SAP shares rose 0.6% and Oracle shares fell 0.2%.

On Thursday, the Institute for Supply Management in Chicago is scheduled to release data illustrating US business expansion in December.

Separately, the National Association of Realtors will report on pending sales of previously owned homes in November from October.

European Markets on Wednesday:

Most European stock markets advanced, spurred by gains in gold miners, as investors started preparing for the farewell of the year 2010.

The Stoxx 600 index finished a thin trading session up 0.3% to 280.63. The European benchmark lost 0.8% on Monday, though it managed to edge 0.2% higher on Tuesday.

Overall, though, the Stoxx 600 has had a very good year, surging 10%. All sectors except the traditionally defensive telecoms and pharmaceutical traded in the green on Wednesday.

Data from the European Central Bank showed that loans to households and companies grew at a faster-than-expected rate in October.

That and M3 created a bit of concern that there could be the start of an inflation issue.

M3, the broadest gauge of money supply, includes cash in circulation, some forms of savings and money-market holdings.

France’s CAC 40 index was up 0.8% to 3,890.65. Germany’s DAX 30 added 0.3% to 6,995.47.

The UK’s FTSE 100 index reopened for the first time since Christmas Eve and slipped 0.2% to 5,996.36.

Some oil stocks gained as crude oil futures hovered at levels around two-year highs at $91.40 a barrel.

Metal-related stocks also rose as copper and gold surged.

Gold futures for February delivery climbed 1.7% in New York on Tuesday, their biggest one-day percentage gain in seven weeks. On Wednesday, they advanced a further $6.50 to $1,412.10.

Shares of Rio Tinto fell 0.5% after it declared force majeure on coal production from four basins in Australia because of flooding.

In Sweden, shares of Skanska AB gained 2.2% after the construction company said that it will receive 5 billion kronor ($730 million) from the sale of its 50% stake in Chile’s Autopista Central highway.