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Wednesday, June 18, 2008
A dull day at US Market
Nasdaq outperforms as several brokerage downgrades weigh on overall market
Technology sector was a sole winner in today’s trading at US Market as indices closed almost unchanged but Nasdaq was the only index to register decent gains. Financials were also strong today but weakness in telecom and a couple of other major sectors offset the same today, Monday, 16 June, 2008. Crude prices neared $140 earlier in the day but then slipped and ended marginally lower going into close. Four of the major economic sectors closed higher. Financials, Technology, Energy and Materials were the winning sectors.
The Dow Jones industrial Average traded between red and green for the entire day. It was down more than 50 points earlier in the day. Going into close, the index ended the day with a loss of 38 points at 12,269.58. The Nasdaq Composite Index, finished higher by 20.2 points at 2,474.78. S&P 500 finished higher by 0.11 points at 1,360.14.
Nineteen out of thirty Dow stocks ended in the red today. AT&T and Verizon – the telecom stocks led the Dow laggards. The financial heavyweights like Citigroup were some of the stocks that helped Dow to restrict its losses.
In economic news, according to the NY Empire State Index, June manufacturing activity in the New York region contracted by a larger-than-expected amount. The reading slipped 5.5 to -8.7, which fell short of the consensus estimate of -2.0. The stock market responded negatively to the report.
Brokerage downgrades of giants like General Electric, Verizon and AT&T prevented the broader market from making an advance.
The Nasdaq outperformed today with help from Research In Motion which benefitted from several positive brokerage comments
The National Association of Home Builders reported the industry to be as gloomy as ever in June, with about one in five builders holding the view the housing market is good.
Crude prices retreated back after nearing $140/barrel today. Couple of factors continued to weigh on crude prices. Chance of an increase in output at Saudi Arabia was the main reason. Temporary shutdown of an oil platform in the North Sea and weakness in the U.S. dollar had earlier pushed up crude prices. Crude-oil futures for light sweet crude for July delivery today closed at $134.61/barrel (lower by $0.25/barrel or 0.02%) on the New York Mercantile Exchange. Earlier it rose to $139.89/barrel.
At the currency markets on Monday, the U.S. dollar fell against most of its major rivals after a meeting of the Group of Eight finance ministers in Japan focused more on inflation than on currencies, deflating expectations of a strong statement of support for the U.S. currency. The dollar index , which tracks the performance of the greenback against a basket of other major currencies, was off 0.6% at 73.62.
Volume on the New York Stock Exchange topped 1.1 billion, with advancers ahead of decliners 3 to 2. On the Nasdaq, more than 804 million shares traded, with advancing stocks outpacing those declining by 4 to 3.
Key earnings releases from Goldman Sachs and Best Buy are due tomorrow. Both report prior to opening bell. Tuesday's economic data includes May Housing Starts and the May Producer Price Index followed by the Industrial Production Index for May.
Gold dives, losses limited on mixed US data
US industrial production data awaited
The yellow metal futures dived immediately after the data showed that the US data showed that the Producer prices rose. However gains in the dollar were capped as the housing starts fell to their lowest levels in 17 years and fall in the building permits. The core PPI that excluded the volatile items like energy and food prices however rose 0.2% lower than 0.4% last year also blocked the gains in dollar.
The U.S. current account deficit widened to $176.4 billion in the first three months of the year from $167.2 billion in the fourth quarter which is 5% of gross domestic product. US may building permits fall 1.3% to 969 thousand. Housing starts fell 3.3% to a seasonally adjusted annual rate of 975,000 in May, the lowest level since March 1991. Starts of single-family homes fell 1% to an annual rate of 674,000, also the lowest in 17 years. Wholesale prices rose 1.4% in May, after seasonable adjustments, with energy prices gaining 4.9% and food prices rising 0.8%, the Labor Department reported Tuesday. May's core PPI -- which excludes food and energy prices -- rose 0.2%.
The US industrial production figures and capacity utilization rate are due out 9:15 a.m.
COMEX Gold futures for August contract fell to as low as $876.2 an ounce down $10.1. The supports are at 871 levels with the resistance at 865 levels. Comex gold warehouse stocks were unchanged at 7,603,090 ounces Monday, while silver stocks were up 1,829,024 ounces at 134,664,359 ounces.
MCX Gold for the upfront month contract is trading down around Rs 80 at Rs 12202 per 10 grams, having earlier dipped to as low as 12160. The supports are at 12000 levels.
In currencies, the pound slipped from a one-week high against the dollar on Tuesday as a higher-than-expected rise in inflation raised concerns over the health of the UK economy. Figures showed UK consumer price inflation rose at an annual rate of 3.3 per cent in May, the highest since records began in 1997 and way above the Bank of England’s target of 2 per cent. The euro is up to $1.5484 from $1.5467 late Monday afternoon.
A closely watched gauge of German economic sentiment- the ZEW economic expectations index fell to -52.4 in June, news reports said, from -41.4 in May. The ZEW current conditions index fell to 37.6 in June from 38.6 in May, compared to expectations for a fall to 37.3.
Today's Pick - Allcargo Logistics
We recommend investors buy the stock of Allcargo Global Logistics with a short-term perspective. From the charts, we see that it has been on a long-term downtrend from its January 2007 peak of Rs 1,355 to its June 2008 low of Rs 620.
However, the stock found support at around Rs 640 for the second time (a key support level) recently and commenced an up move. At around Rs 700, the stock crossed over the 21-day moving average, showing signs of bullishness.
Recently, the stock penetrated the 50-day moving average as well as the long-term down trendline. The daily relative strength index is featuring in the bullish zone and the weekly RSI is rising towards this zone. The moving average convergence and divergence is on the brink of entering positive territory.
We are bullish on the stock in the short-term. We expect the stock’s current up move to prolong until it hits our price target of Rs 895 in the approaching trading sessions. Traders with a short-term perspective can buy the stock while maintaining stop-loss at Rs 750.
via BL
RIL June 2008 futures most active
Turnover in F&O segment vaults
Nifty June 2008 futures were at 4639.35, a discount of points 13.65 as compared to spot closing of 4,653.
NSE's futures & options (F&O) segment turnover advanced to Rs 42624.38 crore from Rs 40,166.83 crore yesterday, 16 June 2008.
Reliance Industries (RIL) June 2008 futures were at discount at 2336 compared to the spot closing of Rs 2338.95. It was the most active contract with turnover of Rs 1017.33 crore.
Reliance Petroleum June 2008 futures were at premium at 186.50 compared to the spot closing of Rs 185.65.
Ranbaxy Laboratories June 2008 futures were at premium at 588 compared to the spot closing of Rs 587.10.
In the cash market, the S&P CNX Nifty surged 80.50 points or 1.76% at 4,653.
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