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Wednesday, December 14, 2011

Sensex succeeds…Snaps 3-day losing streak

Main Indian stock indices managed to notch decent gains on Tuesday, breaking the sequence of three straight losing sessions, with the BSE Sensex ending above 16,000 and the NSE Nifty closing at 4,800. The advance today was led by the Large-Cap shares while the broader market weakened. Also, the market overlooked a steep drop in the Indian rupee, which touched a new all-time low before recovering slightly. Another interesting aspect was that today’s gains came in the backdrop of weak overseas cues.

Fed fumble & currency crumble

A weak currency is the sign of a weak economy, and a weak economy leads to a weak nation. - Ross Perot.

A steep fall in the rupee since August to an extent reflects the rapid deterioration in India’s economic fortunes. A big problem is that policymakers have little room to arrest the economic slowdown. The RBI cannot afford to cut rates as inflation remains elevated. The Government is also hamstrung due to a swelling fiscal deficit. The eurozone credit crisis and anemic US economy have made matters worse. Downside risks for the Indian and global economy still persist. Therefore, one cannot rule out further drop in equities and currencies. There is only one option: endure the pain and avoid misadventures.

Better trades for the day - Dec 14 2011

All eyes will be on the inflation for the month of November today. Markets are expecting a negative start...To see more...Click Here

Global Cues:

The European stock markets were mostly lower Tuesday (December 13, 2011), as fears over European debt continued to dominate sentiment with ratings agencies adding pressure by warning on the future of the euro zone.

The US stocks fell for a second straight day on Tuesday after the Federal Reserve gave no hints of new stimulus measures to offset the effects of the worsening European debt crisis.

The Asian stocks were trading lower on Wednesday (December 14, 2011) on Fed disappointment. SGX Nifty was trading 46 points down, indicating a negative opening for the Indian markets.

Commodity cues

The US Crude Oil prices rose 2% on Tuesday as geopolitical jitters about Iran combined with threats to supply and key shipping lanes sent US crude above $100 a barrel.

Headlines for the day

TV, fridge makers get the blues

Hotel rates, air fares soar for Christmas, New Year

Thomas Cook sells hotel to ease debt burden

Tata Power secures funds for its solar project

L&T Infra bets on solar power

Arvind inks JV with PD Glass

DGH proposes formula for curbing RIL's KG-D6 cost recovery

DIPP to hold talks with stakeholders on FDI in retail

CBI probe into appointment of IFCI head recommended

Food Bill put on the backburner

Mixed finish for bullions as gold drops but silver rises

Gold extends drop in electronic trading following FOMC meet

Precious metals ended mixed on Tuesday, 13 December 2011 at Comex. Yellow metal prices turned pale as the dollar headed up substantially higher. Gold prices fell but silver rose. But Comex gold futures also sold off sharply in after-hours U.S. electronic trading and pushed to a fresh seven-week low following the Fed's FOMC meeting that gave no hints of any further quantitative easing of U.S. monetary policy. That helped to push the U.S. dollar index further higher and to a fresh two-month high, which in turn put more downside price pressure on gold.

Crude prices end substantially higher

IEA expects global oil demand to average 89.0 million barrels a day in 2011 and 90.3 million barrels a day in 2012

Crude prices ended considerably higher on Wednesday, 13 December 2011 at Nymex. Prices stayed strong throughout the day. Prices rose following reports of Iran planning military drills in a strategically important oil-shipping channel. A strong dollar put a check on the price rise.

Market may open lower on weak Asian stocks; inflation data in focus

The market may open lower on weak Asian stocks. Trading of S&P CNX Nifty futures on the Singapore stock exchange indicates a fall of 43.50 points at the opening bell. Asian shares fell today as the Federal Reserve refrained from announcing new stimulus measures.

On the macro front, data due today, 14 December 2011, on headline inflation for November 2011 will provide cues on the central bank's likely policy stance at its mid-quarter monetary policy review on Friday, 16 December 2011. Inflation based on the wholesale price index (WPI) is projected to ease to 9% in November 2011, as per the median estimate of the poll carried out by Capital Market. Inflation, as measured by the wholesale price index (WPI), stood at 9.73% in October 2011 and 9.72% in September 2011.

SGX Nifty Live Update - Dec 14 2011

4794.25 -35.25 (-0.73%)

GAIL, Telecom, India Economy

GAIL, Telecom, India Economy