Market snaps two-day winning streak

Volatility ruled the roost today, 4 January 2012, as key benchmark indices flip-flopped between negative and positive territory. After a choppy start, the barometer index, BSE Sensex, shot up to the psychological 16,000 mark in mid-afternoon trade. Gains could not be sustained as the market soon reversed direction. Concerns about upcoming Q3 December 2011 earnings and weak European stocks hit investor sentiment adversely. The Sensex fell 56.72 points or 0.36%, off about 122 points from the day's high and up about 60 points from the day's low.

The market snapped a two-day winning streak. The Sensex had jumped 484 points or 3.13% in two trading sessions to settle at 15,939.36 on Tuesday, 3 January 2012, from a recent low of 15,454.92 on Friday, 30 December 2011. The Sensex has jumped 427.72 points or 2.77% this month so far. From a 52-week high of 20,664.80 on 3 January 2011, the Sensex has lost 4782.16 points or 23.14%. From a 52-week low of 15,135.86 on 20 December 2011, the Sensex has risen 746.78 points or 4.93%.



PSU stocks rose after the stock market regulator Securities and Exchange Board of India (Sebi) on Tuesday, 3 January 2012, made it easy for the government to quickly tap major institutional investors to sell up to 10% of its stake in listed public sector companies. Index heavyweight Reliance Industries (RIL) edged lower in volatile trade.

Capital goods stocks extended recent gains on bargain hunting after a steep sell-off last month. Some realty stocks declined. Two wheeler makers fell on the possibility of a hike in petrol prices by public sector oil marketing companies (PSU OMCs) after a surge in crude oil prices overnight. FMCG stocks fell on profit taking after the recent gains. IT stocks were mixed after positive economic data in the US, the biggest outsourcing market for Indian IT firms. Telecom stocks fell on reports that the telecoms department plans to impose penalties totaling Rs 1594 crore on five mobile phone companies for allegedly understating revenues and hence paying lower revenue share during 2006-07 and 2007-08.

A bout of volatility was witnessed in early trade as key benchmark indices trimmed losses after slipping into the red after a higher opening. The market traded off lows in morning trade. Volatility ruled the roost as key benchmark indices reversed direction to hit fresh intraday lows after surging to hit their highest level in more than one week in morning trade. The market extended losses to hit fresh intraday low in early afternoon trade.

The market trimmed losses after hitting fresh intraday low in afternoon trade. Volatility was the order of the day as key benchmark indices trimmed gains after surging to hit their highest level in more than one week in mid-afternoon trade. The market slipped into the red once again later.

The BSE Sensex lost 56.72 points or 0.36% to settle at 15,882.64, its lowest closing level since 2 January 2012. The index fell 117.04 points at the day's low of 15,822.32 in mid-afternoon trade. The index rose 65.33 points at the day's high of 16,004.69 in mid-afternoon trade, its highest level since 27 December 2011.

The S&P CNX Nifty shed 15.65 points or 0.33% to settle at 4,749.65, its lowest closing level since 2 January 2012. The index hit a high of 4,782.85 in intraday trade, its highest level since 27 December 2011. The index hit a low of 4,728.85 in intraday trade.

The BSE Mid-Cap index rose 0.17% and the BSE Small-Cap index rose 0.10%. Both these indices outperformed the Sensex.

The market breadth, indicating the overall health of the market, was positive. On BSE, 1,499 shares rose and 1,200 shares fell. A total of 135 shares were unchanged.

BSE clocked turnover of Rs 2178 crore, higher than Rs 1850.45 crore on Tuesday, 3 January 2012.

Among the 30-member Sensex pack, 18 rose while rest of them fell.

Index heavyweight Reliance Industries (RIL) fell 1.06% to Rs 716. The stock was volatile. The scrip hit a high of Rs 730.90 and a low of Rs 713.50. The stock had risen 2.37% on Tuesday after the company said during trading hours on that day that it is divesting a part of the interest owned by it in the ETV channels. RIL said that a part of the interest owned by it in the ETV channels is being divested to TV18 Broadcast, a Network18 Group firm.

RIL said as a part of the deal with TV18 Broadcast, Infotel Broad Band Services (Infotel), a subsidiary of RIL, has entered into a Memorandum of Understanding with TV18 Broadcast and Network18 Media and Investments for preferential access to all content of the latter for distribution through the 4G Broadband Network being set up by RIL.

RIL, through investments of about Rs 2600 crore, by its group companies, currently holds interest in various ETV channels being operated and managed by Eenadu Group. A part of the above investments comprising of 100% interest in ETV's regional news channels in Hindi, 50% interest ETV's non-Telugu general entertainment channel and 24.50% interest in ETV's Telugu channels is being profitably divested to TV18 Broadcast, RIL said in a statement.

Independent Media Trust, a trust set up for the benefit of Reliance Industries, has agreed to fund the promoters of Network18 and TV18 to enable them to subscribe to the proposed rights issue announced by both the companies on Tuesday, 3 January 2012. The promoter companies of Network18 and TV18 and Independent Media Trust have entered into a term sheet under which the trust will be subscribing to the Optionally Convertible Debentures to be issued by the Network18 promoter companies. Mr. Raghav Bahl and his team will continue to have full operational and management control of both the Network18 group companies, RIL said.

Meanwhile, the government has reportedly approved Reliance Industries' $1.53 billion investment plan for developing four satellite fields in its D6 gas block off India's east coast. The investment plan, which will help boost falling output of the gas field in the Krishna Godavari basin, has been pending with the authorities for two years. The four satellite fields can produce 10 million cubic metres of gas per day by 2016, which will help shore up output from the D6 block that has seen a 35% drop in production in the past 15 months

Capital goods stocks extended recent gains on bargain hunting after a steep sell-off last month. Among capital goods shares, Crompton Greaves (up 3.42%), Usha Martin (up 3.33%), Bhel (up 2.44%), Havells India (up 2.14%), Thermax (up 1.44%) and BEML (up 1.10%), edged higher.

L&T rose 0.88%, with the stock gaining for the third straight day on the back of announcement of new orders. L&T during market hours on Monday said that L&T Construction bagged new orders worth over Rs 2056 crore across various business segments in December 2011. The Water and Affluent Treatment business has won two major orders totaling Rs. Rs 1262 crore. The Building and Factories segment has bagged a new order valued at Rs. 388 crore while the Rail Infrastructure segment has won orders aggregating to Rs. 406 crore.

Two wheeler makers fell on the possibility of a hike in petrol prices by public sector oil marketing companies (PSU OMCs) after a surge in crude oil prices. Shares of Bajaj Auto fell 4.70% and was the top loser from the Sensex pack. The firm unveiled an ultra-low-cost car on Tuesday, its first foray into the four-wheel market. The compact "RE60" boasts of high fuel efficiency and low carbon dioxide emissions, but the firm did not release a price tag.

Shares of Bajaj Auto had tumbled early this week on reported comments by a company official that the company does not expect to meet its vehicle sales target for this financial year through March. The company's total sales rose 10% to 3.05 lakh units in December 2011 over December 2010. Motorcycle sales rose 8% to 2.63 lakh units and commercial vehicle sales rose 27% to 41,991 units. Exports jumped 25% to 1.19 lakh units. The company announced the monthly sales data early this week.

India's largest two-wheeler maker Hero MotoCorp fell 2.75%. The company today launched two motorcycle models and one scooter model. The company will start retail sales of the 110-cubic-centimeter scooter model Maestro later this month, while that of the 110cc motorcycle model Passion X Pro and 125cc motorcycle Ignitor will happen in the remainder of the year, Chief Executive Pawan Munjal said at the launch.

TVS Motor Company declined 1.13%. The stock had plunged 7.32% on Monday, 2 January 2012, after the company said its total sales declined 0.79% to 1.70 lakh units in December 2011 over December 2010.

Tata Motors rose 3.38%, extending recent gains triggered by strong sales in the month just gone by. The company's total sales of commercial and passenger vehicles jumped 22% to 82,278 units in December, 2011 over December 2010. The domestic sales of the vehicles in both categories for the month stood at 76,663 cars, a 24% jump compared to 61,685 in December 2010, the company said in a statement. However, exports declined 3% to 5,615 units compared to 5,809 in December 2010.

Ashok Leyland rose 1.72%. The company reported sales of 9,088 units for December 2011 including 1,099 units of the recently launched LCV for cargo transportation -- Dost. Adjusting for Dost which was launched in October 2011, sales came in at 7,989 units, up 6% year-on-year.

Maruti Suzuki India declined 0.89% in volatile trade. The car major will reportedly take a call on price hike of its products today, 4 January 2012. The company's total vehicle sales fell 7.1% to 92,161 units in December 2011 over December 2010. Domestic sales dropped 13.4% to 77,475 units. Exports surged by 50.5% to 14,686 units.

Fiat India Automobiles said Tuesday it expects to conclude shortly discussions with Maruti Suzuki India for the supply of diesel engines for cars, a step that will allow the local unit of Suzuki Motor Corp. cut the waiting period on its Swift model. Maruti currently sources all its diesel engines from Suzuki Powertrain, a joint venture between Maruti and Suzuki. These engines are made using Fiat's technology.

Mahindra & Mahindra (M&M) tumbled 4.25% extending recent losses triggered by fears of higher competition in its key segment of utility vehicles. Ford Motor Co. is set to unveil a new, compact sport-utility vehicle in New Delhi this week. The small utility vehicle, called the EcoSport, will be built on the same underpinnings as the auto maker's subcompact Ford Fiesta and likely will be sold first in Asia and South America, reports suggest. Pricing and availability of the vehicle have not been disclosed.

M&M's total automobile sales jumped 26% to 42,761 units in December 2011 over December 2010.

Bank stocks were mixed. India's largest private sector bank by branch network ICICI Bank gained 2.43%, extending Tuesday's 4.16% gains. ICICI Bank has raised the interest rate for NRE deposits. ICICI Bank is now offering up to 9.25% on non-resident external (NRE) deposits.

India's second largest private sector bank by branch network HDFC Bank rose 0.93%. The bank raised interest rates on non-resident savings deposits to 9% from 3.82% from Friday, 23 December 2011, taking advantage of recent deregulation to attract dollars.

However, India's largest commercial bank by net profit and branch network State Bank of India (SBI) fell 0.67%, after surging 4.72% on Tuesday. The bank said on Tuesday it has cancelled the negotiations for establishing a joint venture entity with Visa Inc and Elavon Inc for conducting the merchant acquiring business. In terms of the bank's earlier letter dated 4 May 2010, a joint venture was proposed between SBI Payment Services, the wholly owned subsidiary of SBI and Visa Inc and Elavon Inc.

SBI expects the government to inject capital "any time", although it is yet to get a formal commitment on the amount, SBI's chief financial officer Diwakar Gupta said in a recent interview to a news agency. Gupta said the government will ensure the bank has 8% tier I capital adequacy by March-end. At the end of September, it stood at 7.47%.

Among other banks, Punjab National Bank (down 0.73%), Yes Bank (down 1.67%) and Kotak Mahindra Bank (down 2.39%), edged lower.

Banks are announcing sharp hikes in deposit rates for the Indian diaspora following a the Reserve Bank of India's (RBI) move to deregulate interest rates on NRE deposits recently to attract more dollars into the economy in its bid to arrest steep fall in the rupee value.

In its draft guidelines on Basel III capital regulation norms for banks unveiled recently, the RBI has suggested that Common Equity Tier 1 (CET1) capital must be at least 5.5% of risk-weighted assets (RWAs). Tier 1 capital must be at least 7% of RWAs and total capital must be at least 9% of RWAs, according to the draft guidelines. RBI has suggested capital conservation buffer in the form of Common Equity of 2.5% of RWAs.

The RBI said the implementation period of minimum capital requirements and deductions from Common Equity will begin from January 1, 2013 and be fully implemented as on March 31, 2017. Capital conservation buffer requirement is proposed to be implemented between March 31, 2014 and March 31, 2017. Instruments which no longer qualify as regulatory capital instruments will be phased-out during the period beginning from January 1, 2013 to March 31, 2022.

For OTC derivatives, in addition to the capital charge for counterparty default risk under Current Exposure Method, banks will be required to compute an additional credit value adjustments (CVA) risk capital charge. The parallel run for the leverage ratio will be from January 1, 2013 to January 1, 2017, during which banks would be expected to strive to operate at a minimum Tier 1 leverage ratio of 5%. The leverage ratio requirement will be finalized taking into account the final proposal of the Basel Committee.

Metal and mining stocks rose for the third straight day as recent data showed improved Chinese manufacturing activity in December 2011. China is the world's largest consumer of copper and aluminum. NMDC (up 3.9%), Hindustan Zinc (up 3.01%), Hindalco Industries (up 2.43%), Nalco (up 1.58%), Bhushan Steel (up 1.57%), Sail (up 1.55%), Sesa Goa (up 1.35%), Tata Steel (up 0.68%) and Sterlite Industries (up 0.42%), edged higher.

DLF fell 2.25% on reports the Supreme Court stayed the Punjab and Haryana High Court's judgment that directed the DLF to demolish structures at its upcoming Cyber City project in Gurgaon township and return around 20 acre of prime estate to villagers.

Among other realty stocks, Indiabulls Real Estate (down 2.33%), Prestige Estates (down 1.49%), Parsvnath Developers (down 1.15%), Oberoi Realty (down 1.02%) and Sunteck Realty (down 0.63%), edged lower.

FMCG stocks fell on profit taking after the recent gains. Hindustan Unilever (down 3%), Colgate-Palmolive (India) (down 1.14%), Ruchi Soya Industries (down 0.64%), Godrej Consumer Products (down 0.43%), ITC (down 0.32%) and Britannia Industries (down 0.02%), declined.

IT stocks were mixed after positive economic data in the US, the biggest outsourcing market for Indian IT firms. India's third largest software services exporter by revenues Wipro rose 0.29%, after jumping 4.59% on Tuesday.

India's second largest software services exporter by revenue Infosys fell 0.36%. The company announces Q3 December 2011 results on 12 January 2012. The company said recently its business process outsourcing subsidiary -- Infosys BPO has signed a definitive agreement to acquire all of the outstanding share capital in Australia-based Portland Group Pty, a leading provider of strategic sourcing and category management services. The purchase consideration for the deal is Australian dollar (AUD) 37 million. Portland Group reported revenue of about AUD 31.3 million for the year ended 30 June 2011.

India's largest software services exporter by revenues Tata Consultancy Services (TCS) declined 1.86%. TCS recently announced that it will expand its operations in the state of Maharashtra by building a new software development campus in Nagpur with an investment of Rs 600 crore in the first phase.

Telecom stocks fell on reports that the telecoms department plans to impose penalties totaling Rs 1594 crore on five mobile phone companies for allegedly understating revenues and hence paying lower revenue share during 2006-07 and 2007-08. Bharti Airtel (down 2.95%), Idea Celluar (down 1.92%), Reliance Communications (down 1.68%) and MTNL (down 0.41%), declined. However, Tata Teleservices (Maharashtra) jumped 4.54%.

PSU stocks rose after the stock market regulator Securities and Exchange Board of India (Sebi) on Tuesday, 3 January 2012, made it easy for the government to quickly tap major institutional investors to sell up to 10% of its stake in listed public sector companies. The government is way short of meeting its target of Rs 40000 crore from share sales in state-run firms this fiscal that ends in March. MMTC (up 17.76%), Hindustan Copper (up 15.27%), State Trading Corporation of India (up 14.13%), HMT (up 10.91%), Dredging Corporation of India (up 10.58%) and Neyveli Lignite Corporation (up 4.69%), edged higher.

PSL surged 4.81% after the company said it has secured orders worth about Rs 924 crore in Q3 December 2011 from leading engineering and construction companies.

Opto Circuits (India) rose 1.01% after the company's wholly-owned US subsidiary received US Food and Drug Administration clearance for the sale a disposable cardiac monitoring device.

MMTC reported a highest turnover of Rs 187.49 crore on BSE. Hindustan Copper (Rs 107.57 crore), State Bank of India (Rs 100.01 crore), State Trading Corporation of India (Rs 75.66 crore) and Tata Motors (Rs 71.85 crore), were the other turnover toppers on BSE in that order.

Cals Refineries clocked highest volumes of 2.31 crore shares on BSE. Dazzel Confindive (82.65 lakh shares), Karuturi Global (57.93 lakh shares), GVK Power & Infrastructure (47.62 lakh shares) and IFCI (44.45 lakh shares), were the other volume toppers on BSE in that order.

Foreign institutional investors (FIIs) bought shares worth Rs 255.39 crore on Tuesday, 3 January 2012, as per provisional data from the stock exchanges. FIIs had offloaded shares worth a net Rs 1287.84 crore in three trading sessions from 29 December 2011 to 2 January 2012, as per provisional data from stock exchanges.

Market regulator Securities & Exchange Board of India (Sebi) has allowed auctioning of securities through stock exchanges and introduced a new method for institutional placement of stocks. As per the auctioning route, a special window can be used by promoter stakeholders to sell at least 1% of the paid-up capital of a company. This will be similar to the block-deal mechanism for secondary stock market transactions, but with lesser restrictions. Under the institutional placement programme (IPP), shares can be sold only to qualified institutional buyers.

Exchanges will provide a separate window for the offer for sale of shares which will co-exist with the normal trading hours. But, promoter or promoter group of companies will not be allowed to bid for the shares. Sebi also said the auction method can be only used by promoters of top 100 companies based on average market capitalisation for sale of their stakes. The regulator said the IPP method can be used to increase public holding by 10% and could be offered to only qualified institutional buyers with 25% being reserved for mutual funds and insurance companies. Issuers will have to announce an indicative floor price or price band at least one day before the opening of the offer.

A special trading session will be held on Saturday, 7 January 2012, as the National Stock Exchange is upgrading the capacity of its Futures and Options trading system hardware and software. Trading will take place from 11:15 IST to 12:45 IST on that day. Trades done on Saturday, January 07, 2012, will be settled on Tuesday, 10 January 10, 2012, as a separate settlement, NSE said in a circular.

Starting off the New Year on a liberalisation note, the government on Sunday, 1 January 2012, announced its decision to allow Qualified Foreign Investors (QFIs) to directly invest in the Indian equity market from 15 January 2012. A QFI is an individual, group or association resident in a foreign country that is compliant with Financial Action Task Force (FATF) standards. QFIs include pension funds which normally tend to stay invested for a longer period of time. QFIs do not include FIIs/sub accounts. In August last year, the government allowed foreign investors to directly invest up to $13 billion in equity and debt schemes of mutual funds.

Qualified foreign investors, or QFIs, will now be able to invest individually up to 5% of the capital of the Indian company. Cumulatively, QFIs can invest up to 10% of the capital of the company being invested in. These limits are over and above the FII and NRI investment ceilings prescribed under the PIS route for foreign investment in India, a government statement said.

The next major trigger for the market is Q3 December 2011 corporate earnings, which will start tricking from the second week of January 2012. The focus will be on guidance from the company managements on outlook for the remaining part of the year and for the next year. Analysts expect weak Q3 December 2011 results due to lower volume growth in a slowing economy, higher raw material costs and higher interest charges.

IT bellwether Infosys and housing finance major HDFC report Q3 results on 12 January 2012. HDFC Bank and Bajaj Auto unveil Q3 results on 19 January 2012. Axis Bank unveils Q3 results on 20 January 2012. Dabur India unveils Q3 results on 31 January 2012. Mahindra & Mahindra unveils Q3 results on 7 February 2012.

India's services sector grew at its fastest pace in five months in December riding on a surge in new business and expansion in employment, but rising input prices will likely add to inflationary pressures in the coming months, a survey showed. The HSBC Markit Business Activity Index -- based on a survey of around 400 firms -- rose to 54.2 in December from 53.2 in November, staying above the 50 mark that separates growth from contraction for the second month in a row. In the December survey, the new business sub-index jumped to 55.7 from 52.3 in November, thanks to an improvement in demand. Both the services PMI index and the new business sub-index were at their highest levels since July.

India's manufacturing activity surged to a six-month high in December thanks to a spike in factory output and new orders from domestic and international firms, a survey of purchasing managers showed early this week. The HSBC Markit India Manufacturing PMI jumped to 54.2 from 51 in November, its biggest monthly rise since April 2009. The index has stayed above the 50 mark that separates growth from contraction for 33 months now.

The infrastructure sector output grew 6.8% in November from a year earlier, sharply higher than the annual growth of 3.7% in November last year, data released by the government early last week showed. The infrastructure sector accounts for 37.9% of India's industrial output.

India's November exports rose an annual 3.87% to $22.3 billion, while imports for the month rose 24.55% to $35.9 billion, the government said in a statement early this week. India's trade deficit in November was at $13.6 billion.

Food inflation rose at its slowest pace in more than five years in the third week of December 2011, bolstering hopes of a steady easing in overall price pressures which could prompt RBIto consider cut in interest rates to revive a slowing economy. Food inflation eased to 0.42% in the week ended December 17 from 1.81% in the preceding week, the Commerce & Industry Ministry said on 29 December 2011. Inflation in the Primary Articles group eased to 2.7% in the week under review, from 3.78% in the week ended December 10. Inflation in the Fuel & Power group stood at 14.37% in the week ended December 17, from 15.24% in the previous week.

The RBI is likely to begin easing monetary policy to address concerns about economic growth, Governor D Subbarao said in an interview to a foreign electronic media house, reiterating comments made by the RBI when it kept rates unchanged on 16 December 2011. At its mid-quarterly monetary policy review meet on 16 December 2011, the RBI(RBI) left its main lending rate unchanged in order to support faltering economic growth as inflation shows signs of cooling. While inflation remains on its projected trajectory, downside risks to growth have clearly increased, RBI had said in a statement on 16 December 2011. From this point on, monetary policy actions are likely to reverse the cycle, responding to the risks to growth, RBI had said.

RBI had said inflation risks remain high and inflation could quickly recur as a result of both supply and demand forces. RBI also said that the rupee remains under stress. The timing and magnitude of further actions will depend on a continuing assessment of how these factors shape up in the months ahead, RBI said. The RBI has raised rates 13 times since March 2010.

Credit rating agency Moody's Investors Service on 14 December 2011 said that the sharp decline in the value of the Indian rupee against the dollar over the past few months is generally exerting only a moderate impact on rated Indian companies. Risks for companies holding large amounts of dollar denominated debt are also manageable in the near term, given that debt maturities are limited for this time frame, Moody's said in a new report. This means Indian companies rated by Moody's do not have a significant dollar outflow at a time when the Indian rupee is losing ground.

India may face the risk of stagflation if the government doesn't take urgent steps to tame inflation and stimulate growth, a parliamentary panel on finance warned on 22 December 2011. The Standing Committee on Finance blamed the Reserve Bank of India's 13 interest-rate increases over the past 21 months for stalling economic growth. "Measures taken by the government and the RBI so far have squarely failed to rescue the economy from unabated inflation. Instead, monetary measures initiated for this purpose have only resulted in worsening the condition of the economy further," the report said.

The budget for 2012/13 ending March will be presented after elections scheduled in five states, Finance Minister Pranab Mukherjee said on Monday, 2 January 2012. State elections are scheduled between the end of January and early March. The annual budget is usually presented on the last working day of February. The Election Commission on 24 December 2011 announced the dates for the assembly polls in Uttar Pradesh, Punjab, Uttarakhand, Manipur and Goa. Uttar Pradesh will have polling on February 4, 8, 11, 15, 19, 23 and 28, while Uttarakhand and Punjab will go to polls on January 30. Manipur will have polls on January 28 and Goa on March 3.

European shares broke a four-session winning streak on Wednesday as investors paused for breath after a recent string of strong gains. Key benchmark indices in France and Germany fell by between 0.48% to 0.55%. UK's FTSE 100 rose 0.07%.

Manufacturing activity in the UK continued to contract in December, but the pace slowed from the preceding month, according to a survey of purchasing managers released on Tuesday. The Markit/CIPS purchasing managers index (PMI) for the UK's manufacturing sector rose to 49.6 from a revised 47.7 in November. German unemployment fell sharply to the lowest in two decades.

French President Nicolas Sarkozy will meet German Chancellor Angela Merkel in Berlin on 9 January 2012 for talks that are likely to centre on new rules to enforce budget discipline across the European Union (EU). The two leaders are anxious to flesh out a plan agreed at a December 2011 summit by all EU members except Britain for a new treaty to forge closer fiscal integration, as Europe battles to stem a sovereign debt crisis in the euro zone.

Finance ministers from the EU's 27 members will meet on 23 January 2012 before their leaders hold a summit a week later. They will be under intense pressure to find a definitive solution to the crisis which threatens the very survival of the single currency, 10 years after it came into circulation.

Asian stocks were mixed on Wednesday, 4 January 2012. Key benchmark indices in Indonesia Singapore, Japan, and Taiwan rose by between 0.42% to 1.28%. Key benchmark indices in China, Hong Kong and South Korea fell by between 0.49% to 1.37%.

Trading in US index futures indicated that the Dow could fall 9 points at the opening bell on Wednesday, 4 January 2012. Wall Street stocks kicked off 2012 with a sharp rally on Tuesday after data showed US manufacturing activity and construction spending picked up, signaling the economic recovery was gaining steam.

The pace of growth in the US manufacturing sector accelerated in December, its best month since June, while a rise in new orders suggested decent momentum in 2012. Separately, construction spending in November surged to a near 1-1/2 year high. The Federal Open Market Committee will release minutes from its December 13 meeting later in the global day today. The key US economic indicator due this week is the non-farm payrolls data for December 2011 due on Friday, 6 January 2012.