Tension continues

Tension is who you think you should be. Relaxation is who you are. ~Chinese Proverb. Tension across world markets has escalated in the last couple of sessions amid mounting concerns about the financial health of Spain.Sovereign bond yields in Spain soared to new euro area record while stocks across Europe got pummeled. A ban on short selling saw markets in Spain and Italy recover smartly. US stock indices also closed off session lows. Meanwhile, Moody’s has cut credit outlooks for Germany, the Netherlands and Luxembourg. Greece too is back in the spotlight amid reports it may not get international aid if it doesn’t comply with planned budget reforms. Back home, monsoon expectations have been scaled back further. Petrol prices have been increased marginally. Markets are waiting for the Centre to announce pending reforms amid continued opposition to some of the measures. The opening for the Indian stocks is likely to be slightly positive. Earnings reports have accelerated and will vie for investors’ attention. The Nifty closed below the key support of 5160. This move could lead to an accentuation of the downward spiral with major support seen around 5000 levels. Volatility has spiked lately and could rise in the run up to Thursday’s F&O expiry. Talking of earnings, Wipro has just announced its Q1 FY13 results. Net profit stood at Rs 15.80bn while revenues are at Rs 106.19bn. EBIT is at Rs 18.72bn and EBIT margin at 17.62%. Dollar revenues for Q1 FY13 stood at US$1.54bn. July-September quarter dollar revenue guidance at US$1.52-1.55bn. Key Results Today: Ashok Leyland, Canara Bank, Container Corporation of India, Essar Ports, ING Vysya Bank, Jindal Steel, Jubilant Industries, LIC Housing Finance, Lupin, Pidilite Industries, Polaris Financial Technology, Ricoh India, Sesa Goa, Shriram Transport Finance, SKF India, Tata Elxsi, Torrent Power and Wipro. Trend in FII flows: The FIIs were net buyers of Rs 1.09bn in the cash segment on Monday while the domestic institutional investors (DIIs) were net sellers of Rs 3.53bn, as per the provisional figures released by the NSE. The FIIs were net buyers at Rs 20.99bn in the F&O segment on Monday, according to the provisional NSE data. Global Data Watch today: China HSBC Manufacturing PMI (Jul), Australia RBA’s Governor Glenn Stevens Speech, France Markit Manufacturing PMI (Jul), France Markit Services PMI (Jul), Germany Markit Manufacturing PMI (Jul), Germany Markit Services PMI (Jul), EU Markit Manufacturing PMI (Jul), EU Markit PMI Composite (Jul), EU Markit Services PMI (Jul), Spanish 3-month Letras Auction, Spanish 6-month Letras Auction, Troika visits Greece, US Markit Manufacturing PMI (Jul), US Housing Price Index (May) and US Richmond Fed Manufacturing Index (Jul).