Measured movement!

Measure a thousand times and cut once” -Turkish Proverb.

The attention is more on European Union leaders as they meet today and tomorrow in Brussels to discuss measures to regain the lost confidence. The optimism surrounding the EU Summit faded after Germany reportedly rejected plan of running two separate bailout funds. Also, S&P put EU and several top European banks on credit watch. UK has set some conditions on backing the proposed amendments in EU Treaty.

Meanwhile, the ECB is likely to deliver its second rate cut in as many months on Thursday. The Bank of England (BOE) also meets today to review its monetary policy. South Korea has left rates steady.



Back home reports of a possible CRR cut by the RBI have been doing the rounds for the past few sessions. But, the central bank officials continue to be in denial mode. RBI deputy governor Subir Gokarn is the latest one to dismiss rumours of a CRR cut. The RBI will meet on Dec. 16 to review its monetary policy. It has already announced its intention to maintain a status quo on rates. Still, the RBI commentary will be important given the worsening macro-economic situation – domestic as well as global.

The start today is likely to be sluggish. Asian indices are mostly lower. US benchmarks finished mixed to flat. European stocks fell.

FIIs were net buyers of Rs 1.35bn (provisional) in the cash segment on Wednesday, according to NSE data. The domestic institutional institutions (DIIs) were net sellers of Rs 1.9bn on the same day.

The foreign funds were net buyers of Rs 7.45bn in the F&O segment on Wednesday, NSE data shows.

FIIs were net buyers at Rs 2.11bn in the cash segment on Monday (Dec. 5), according to SEBI web site. The Mutual Funds were net buyers at Rs 848mn on the same day.

Natco Pharma may remain in the spotlight after reports that Sun Pharma founder Dilip Sanghvi has picked up a minority stake in the company. Natco Pharma shares rose 15% on Wednesday.

UTV Software is another stock to keep an eye on after the Government approved a proposal from Disney to fully acquire the Indian media company by increasing its stake from ~48% now to 100%.

Japan’s machinery orders unexpectedly fell for a second straight month in October. Australia's unemployment rate ticked up to 5.3% as employers unexpectedly reduced their payrolls in November.

Asian Markets on Thursday:

Asian markets are trading mostly down on renewed doubts about a favourable outcome at a two-day EU Summit in Brussels after a German official reportedly dismissed plans to run two separate bailout funds to deal with the region's credit crisis.

Standard & Poor's, having put 15 governments on notice, has now placed some of the largest eurozone banks, including Societe Generale and Deutsche Bank, on review for possible downgrades.

S&P has also put the European Union on credit watch for a possible downgrade later.

Reports showing unexpected declines in Japanese machinery orders and Australian employment also weighed on the sentiment across Asia.

The MSCI Asia Pacific Index was down 0.9% as of 11:03 a.m. in Tokyo.

The Nikkei in Japan was down ~1% at 8,629. The Hang Seng in Hong Kong was down ~1.1% at 19,017 while the Shanghai Composite index in China was down 0.6% at 2,318.

The Kospi in South Korea dropped ~0.8% at 1,903 while the Taiex in Taiwan lost 1.5% at 6,926. The Straits Times in Singapore was down ~1.7% at 2,736. The S&P/ASX 200 index in Australia was down 0.4% at 4,274 while the NZX 50 index in New Zealand was down 0.5% at 3,264.

The yen and dollar rose as their appeal as safe haven currencies increased amid signs of slowdown in the regional economy.

Australia’s dollar slid after a government report showed that employers cut jobs for the first time in three months.

New Zealand central bank kept rates at a record low and said that global conditions have deteriorated.

The euro held a three-day gain against the dollar before the European Central Bank’s meeting and the EU Summit in Brussels on the region’s debt crisis.

US Markets on Wednesday:

US equity benchmarks closed mixed, with the Dow managing slender gains while the remaining two indices ending nearly unchanged.

Investors remained on guard ahead of the European Union Summit where European leaders are likely to announce a credible plan to contain the region's debt crisis.

The Dow Jones Industrial Average gained 46.24 points, or 0.4%, to end at 12,196.37.

The S&P 500 Index rose 2.54 points, or 0.2%, to finish at 1,261.01, while the Nasdaq Composite Index closed virtually flat at 2,649.21.

Advancers edged ahead of decliners on the New York Stock Exchange, where 968 million shares traded. Composite volume topped 4.1 billion.

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

Oil for January delivery fell 79 cents to $100.49 a barrel.

Gold futures for February delivery rose $13 to $1,744.80 an ounce.

The price on the benchmark 10-year U.S. Treasury held rose, with the yield easing to 2.06%.

In separate statements, Standard & Poor’s said that the European Union’s AAA long-term rating and some of the region’s biggest financial institutions could be downgraded.

Investors hope that EU leaders would reach an agreement on Friday on a plan that would help euro area member nations to better integrate their economies.

Those expectations were bolstered by comments from German Chancellor Angela Merkel supporting a stronger fiscal union among euro-zone members.

Late on Tuesday, a report indicated that European leaders are considering letting the eurozone’s existing rescue fund continue running when a larger facility comes into force in the middle of next year.

A German official dismissed the report sending stocks in Europe lower.

The ECB is likely to announce another rate cut on Thursday. Investors are particularly interested in any clues the bank is willing to expand its bond-buying program to cap surging sovereign borrowing costs.

Reports also said that the Group of 20 was considering a $600 billion IMF lending program, but an IMF official said no such plan was being considered.

US Treasury Secretary Tim Geithner is in Europe this week to meet with top government officials, highlighting the growing concern in Washington about the eurozone debt crisis.

Shares of Citigroup fell after CEO Vikram Pandit said that the banking giant would lay off roughly 4,500 employees over the next few months.

Shares Talbots soared 60% after the retailer said that it had received a bid from buyout firm Sycamore Partners.

JC Penney announced that it would buy a stake in home decor expert Martha Stewart's franchise, Martha Stewart Living Omnimedia. The retail giant said that it would invest $38.5 million. Shares of Martha Stewart Living rose 33% in early trading.

Shares of Monsanto fell after the agriculture company raised its fiscal first- quarter earnings-per-share guidance.

European Markets on Wednesday:

European stock indices ended lower as hopes for progress at this week’s European Union summit were tempered by reported German objections to an apparent plan to bolster the firepower of the eurozone’s bailout fund.

The Stoxx Europe 600 index lost 0.2% to close at 241.44.

The German DAX 30 index shed 0.6% to end at 5,952.64 while the UK’s FTSE 100 index fell 0.4% to settle at 5,546.91. The French CAC 40 index slipped 0.1% to finish at 3,175.98.

A German official said that the government was against combining the eurozone’s €440 billion ($593.1 billion) interim bailout fund and the permanent €500 billion European Stability Mechanism.

The news came after a UK newspaper reported that officials were considering running the two funds alongside each other.

The official also said that divisions may keep agreement on a debt crisis strategy from being hammered out by all 27 EU members at this week’s summit in Brussels.

Shares of ING Groep NV fell after the bank said that it would take a fourth-quarter charge of €900 billion to €1.1 billion ($1.2 billion to $1.4 billion) from its US annuity business.

Finnish stocks also fell after Finland’s finance minister Jutta Urpilainen reportedly rejected some of the proposals made by Germany and France to resolve the crisis.