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Earning season kicks off with a bang at Wall Street

Indices register huge weekly gains

Earning reports started trickling in during the course of the week that ended on Friday, 17 July, 2009. IBM and JP Morgan Chase delivered strong earning surprises during the week. Better than expected reports also came in from other big names like GE, Intel, and Bank of America. Dow registered gains for all the days of the week. The week's economic data took a backseat to the earnings reports

For the week, The Dow Jones Industrial Average ended higher by 597.42 points at 8,743.94. The Nasdaq Composite Index, ended higher by 130.58 points at 1,886.61. S&P 500 ended higher by 61.25 points at 940.38.

The bullish tone for the week was set on Monday itself, when influential analyst Meredith Whitney raised her rating on Goldman Sachs ahead of its earnings report to Buy from Neutral

Among other major names that announced earnings, Dow components Johnson & Johnson and Goldman Sachs announced upside earnings results for the latest quarter. Intel strongly beat Wall Street's estimates. The company also issued an upward third quarter guidance.

Among economic reports for the week, Retail Sales and Industrial Production reports both showed end demand remains generally weak. Granted total retail sales were up 0.6% versus May, but when gasoline, autos, and building materials sales were excluded, they were down for the fourth straight month. That is notable because this core retail sales figure is used by the government in computing GDP.

Industrial production declined -0.4% in June. That was the 17th decline in the last 18 months.

Initial claims fell noticeably for the second straight week while continuing claims plunged by 642,000 to 6.273 million. That marked the biggest drop ever in continuing claims. In fact, it was so big that few people (including us) believed it. Nonetheless, the headlines themselves didn't hurt at all the way the market behaved in the past week.

The minutes from the Federal Open Market Committee meeting in June were released during the week. The Fed remains concerned over the labor market, but it has raised its forecast for the economy for 2009 to 2010.

In the US market on Friday, 17 July, 2009, even as participants digested earnings reports from several widely held companies stocks traded listlessly within a narrow trading range of just seven points. However, the sideways action did help the S&P 500 succeed in making its first weekly advance in more than one month.

The Dow Jones Industrial Average ended higher by 32 points at 8,743.34. The Nasdaq Composite Index, ended higher by 1.5 points at 1,886.03. S&P 500 ended lower by 0.36 points at 940.4.

The Commerce Department in US reported on Friday that home-building starts rose 3.6% to an annual rate of 582,000, the highest since November, 2008. Building permits, a sign of future construction, jumped the most in a year.

Tech was the session's best performing sector. It advanced 1% amid follow-through buying. The sector's strength started early this week when a thoroughly impressive report from Intel attracted buyers.

Strong housing report boosted crude prices and the same ended higher on Friday, 17 July, 2009. Prices also registered substantial gains for the week. On Friday, crude-oil futures for light sweet crude for August delivery closed at $63.56/barrel (higher by $1.54 or 2.5%). For the week, crude ended higher by 6.1%.

In the currency market on Friday, the dollar fell against its counterparts. The dollar index fell by 1% for the week.

For the year 2009, Dow is down by 0.4%. The Nasdaq and S&P 500 are up by 19.6% and 4.1% respectively.

Latest Grey Market Premiums - Adani Power

Excel Infoways Ltd. 80 to 85

4 to 6

Raj Oil Mills Ltd. 100 to 120

5 to 7

Adani Power 110 to 130 (Approximate)

10 to 11

NHPC 15 to 20 (Approximate)

3 to 4

Daily Call - July 20 2009

The 9% surge seen last week has wiped out the head and Shoulders pattern that had been formed in the Sensex and the Nifty. Similar moves in the US markets have also made those bearish patterns fizzle out. However, considering the sharp rise in the past week, expecting an encore in this week may be asking for the moon, in a week that is going to witness the longest Total Solar eclipse of this century.

However, the week is set to begin on a positive note. The confidence comes from the fact that more than 3.2 Crore shares have been added in the stock futures. This is the highest single day addition in the month of July. Some of the stocks that we like are Jaiprakash Associates, FSL and Rolta. Among the banks, our interest revolves around ‘Axis’. Traders should keep an eye on international developments, where a $3 billion helpline is likely to be thrown at CIT, the beleaguered US bank. If this fails to materialise, it could jolt the traders.

Asian stocks open in green

Asian stocks advanced, led by commodity and technology shares, after oil and metal prices gained and US housing starts unexpectedly rose.

Samsung Electronics which gets 19% of its revenue in America added almost 2.5% in Seoul as the company settled a patent-infringement lawsuit filed by the California Institute of Technology over digital cameras.

Hong Kong`s Hang Seng index climbed 199.53 points, or 1.06%, to trade at 19,005.19.

China`s Shanghai Composite gained 25 points, or 0.78% to trade at 3,214.74.

Taiwan`s Taiex index advanced 60.11 points, or 0.88%, to trade at 6,911.10.

South Korea`s Kospi index rose 25.36 points, or 1.76%, to trade at 1,465.46.

Singapore`s Straits Times went up 0.40 points, or 0.02%, to trade at 2,431.36. (7.52 a.m., IST)

Japanese benchmark index Nikkei is not trading today.

Pre Session Commentary - July 20 2009

Today domestic markets are likely to open positive. The US markets took a breather on Friday after exemplary rally during the last couple of weeks. Asian markets have opened with phenomenal gains today as traders are optimistic about the firmness of the recent rally. One could witness an early surge in the domestic arena today, however as the day’s trade would progress, traders are likely to wait for cues from the opening of European markets.

On Friday, domestic markets closed with phenomenal gains. The positive cues from Asian markets and also better than expected corporate results helped markets gain at broader level. The Oral Care major Colgate Palmolive reported consolidated net profit of Rs. 103 crore, phenomenal surge of 43 per cent for the quarter ended June 30, 2009 as compared to Rs 72 crore in the corresponding quarter last financial year. In the BFSI space, India Infoline reported net profit of Rs. 51.67 crore during the quarter ended June 30, 2009, fractionally higher than Rs. 49.53 crore in the same period last year. Amongst sectors Auto, Bankex, IT and Teck were the leaders with gains of 5.16%, 4.76%, 4.11% and 4.09% respectively. BSE Mid Caps and Small Caps also gained by 2.31% and 2.44% respectively. Today markets are likely to trade positive with an essence of volatility.

The BSE Sensex closed with phenomenal gain of 494.67 points at 14,744.92 and NSE Nifty ended higher by 143.55 points at 4,374.95. BSE Mid Caps and Small Caps closed with gains of 115.17 and 135.34 points at 5,105.59 and 5,680.90 respectively. The BSE Sensex touched intraday high of 14,800.70 and intraday low of 14,325.58.

On Friday, the US stocks markets closed flat after traders took a breather after phenomenal rally in the past couple of days. Good earnings reported by industry giants like IBM (IBM 115.42, +4.78), Google (GOOG 430.25, -12.35), Bank of America (BAC 12.89, -0.28), Citigroup (C 3.02, -0.01), and General Electric (GE 11.65, -0.75), couldn’t stop traders from taking a rest after a long rally during the last couple of weeks. The trading spirit was lethargic as only 1 billion shares exchanged hands in NYSE, far below the 50-day moving average of 1.3 billion. Homebuilders (+2.3%) and home improvement retailers (+1.3%) recorded phenomenal gains amid news that housing starts and building permits data for June came in higher than expected. US light crude oil futures for August delivery closed at $63.56 per barrel up by 2.5% on the New York Mercantile Exchange.

The Dow Jones Industrial Average (DJIA) advanced by 32.12 points at 8,743.94, NASDAQ index gained 1.58 points to 1,886.61 and the S&P 500 (SPX) closed flat at 940.38.

Today major stock markets in Asia are trading positive. Hang Seng is up by 469.07 points at 19,274.73. Shanghai Composite is up by 48.99 points at 3,238.74. Strait Times is up by 20.02 points at 2,450.98. Seoul Composite is up by 35.33 points at 1,475.43. KLSE Composite is also up by 14.45 points at 1,120.90.

The Indian ADRs ended higher on Friday. In the IT pack, Satyam was up 7.07%, Wipro was up 3.08%, Infosys was up 2.95% and Patni was up 0.60%. In the banking space, ICICI Bank was up 3.78% and HDFC Bank was up 1.12%. In the telecom sector, Tata Comm was up 3.43%, while MTNL was down 0.77%. In the other space, Dr Reddys was up 0.70%, Sterlite was up 4.29% and Tata Motors was up 1.97%.

The FIIs on Friday stood as net buyers in equity and debt. Gross equity purchased stood at Rs 2,618.50 Crore and gross debt purchased stood at Rs 555.50 Crore while the gross equity sold stood at Rs 2,326.70 Crore and gross debt sold stood at Rs 269.40 Crore. Therefore, the net investment of equity reported was Rs 291.80 Crore and net debt was Rs 286.10 Crore.

On Friday, the partially convertible rupee ended at Rs 48.73/74, 0.1% weaker than its previous close at 48.68/69. The rupee lost its strength due to demand from state run banks most likely for payments for defence imports.

On BSE, total number of shares traded were 44.26 Crore and total turnover stood at Rs 6,653.58 Crore. On NSE, total number of shares traded were 92.45 Crore and total turnover was Rs 18,123.41 Crore.

Top traded volumes on NSE Nifty – Unitech with total volume traded 45944445 shares, followed by Suzlon Energy with 42693818, DLF with 13560545, SAIL with 11731225 and ICICI Bank with 10057555 shares.

On NSE Future and Options, total number of contracts traded in index futures was 815316 with a total turnover of Rs 17,002.94 Crore. Along with this total number of contracts traded in stock futures were 609834 with a total turnover of Rs 17,423.51 crore. Total numbers of contracts for index options were 1757732 with a total turnover of Rs 38,191.11 Crore and total numbers of contracts for stock options were 55766 and notional turnover was Rs 1,637.34 Crore.

Today, Nifty would have a support at 4,342 and resistance at 4,452 and BSE Sensex has support at 14,685 and resistance at 14,987.

Market may extend last week's strong gains on firm global cues

The key benchmark indices may extend last week's strong gains on firm global cues on receding economic worries after unexpected jump in U.S. housing starts. Encouraging set of numbers by India Inc in Q1 June 2009 may also support market.

Asian stocks advanced, led by commodity and technology shares, after oil and metal prices gained and U.S. housing starts unexpectedly rose. The key benchmark indices in China, Hong Kong, South Korea, Singapore and Taiwan rose by between 0.91% to 2.29%.

After a strong week for Wall Street, US markets ended Friday's (17 July 2009) trade flat. The Dow added 32.12 points, or 0.4%, to 8,743.94. The S&P 500 index slipped 0.36 points, or less than 0.1%, to 940.38, while the Nasdaq composite index rose 1.58 points, or 0.1%, to 1,886.61. For the week the Dow and S&P were up over 7%. Nasdaq gained almost 8%.

On the earnings front, Bank of America, the largest U.S. bank, said second-quarter net income fell 25% to $2.42 billion and warned results would continue to be hurt by troubled loans from credit card, mortgage and business customers due to the weak economy. Citigroup reported a $4.3 billion quarterly profit, thanks to the merger of its brokerage arm into a new venture after struggling to survive the financial crisis. Gain from that sale boosted net income to 4.3 billion dollar compared with a year-earlier loss of 2.50 billion dollars. Revenue rose by 71%, to 30 billion dollars.

General Electric reported a second-quarter profit of 26 cents a share, topping consensus estimates of 23 cents a share. Revenues came in lower by 17%, at 39 billion dollars was slightly below the 42 billion dollars that analysts had predicted.

In economic news, homebuilders made good gains after housing starts and building permits data for June 2009 came in higher than expected.

Back home, Key benchmark indices rallied last week on signs of recovery in global as well as domestic economy. Firm global cues, encouraging start to Q1 June 2009 earnings from India Inc and revival in monsoon bolstered sentiment. Reversing a 9.45% fall in the week ended 10 July 2009, the 30-share BSE Sensex jumped 1240.70 points or 9.19% to 14,744.92 in the week ended Friday, 17 July 2009.

Earnings unveiled by Indian companies so far have been encouraging. The combined net profit of 122 firms rose 60% on 18% rise in sales in Q1 June 2009 over Q1 June 2008. BASF India, Essar Oil, Indo Rama Synthetics, Merck, Sterlite Technologies, Triveni Engineering, JSW Steel among others will announce their quarter ended June 2009 result today.

As per the provisional figures on NSE, foreign funds bought shares worth Rs 142.15 crore and domestic funds bought shares worth Rs 535.36 crore on Friday, 17 July 2009.

Progress of India's annual monsoon may concern investors. Possibility of deficient rains this year raises a risk of low agri output and hence high food inflation. The cumulative seasonal rainfall (from 1st June) till 15th July is 27% below normal levels. It has adversely affected the kharif sowing. The worst hit crops are rice, oilseeds especially groundnut and soyabean—and sugarcane. These are the crops which have seen sharp rise in their prices last year. Spatial distribution and actual rain during July and August are vital to determine its consequences on overall economy. Indian Meteorological Department has already predicted 98% of normal monsoon during August.

Crude rises by dollar and half

Prices register substantial gain for the week

Strong housing report boosted crude prices and the same ended higher on Friday, 17 July, 2009. Prices also registered substantial gains for the week.

On Friday, crude-oil futures for light sweet crude for August delivery closed at $63.56/barrel (higher by $1.54 or 2.5%). For the week, crude ended higher by 6.1%.

For the month of June, 2009, crude ended higher by 5.5%. In May, crude had registered the largest monthly gain in a decade rising 30%. For the second quarter, crude ended higher by 40%. Crude prices had rallied 11.3% in the first quarter of 2009.

Oil prices had reached a high of $147 on 11 July, 2008 but have dropped almost 57% since then. In July, 2009, it has dropped by 8.5% till date. Year to date, in 2009, crude prices are higher by 42.5%.

The Commerce Department in US reported on Friday that home-building starts rose 3.6% to an annual rate of 582,000, the highest since November, 2008. Building permits, a sign of future construction, jumped the most in a year.

EIA reported earlier during the week that U.S. crude inventories fell 2.8 million barrels in the week ended Friday, 10 July, 2009. The drawdown in crude inventories came as crude-oil inputs in U.S. refineries rose to 15.105 million barrels a day last week, the highest level since late August. Refiners' utilization rate rose to 87.9%.

EIA also reported that gasoline inventories rose 1.5 million barrels, while distillate stockpiles, which include diesel and heating oil, rose 600,000 barrels. Demand for petroleum products, however, remained weak, pushing total petroleum product inventories to 771.6 million barrels last week, up 4.6 million barrels from a week ago. That's the highest level since September 1998.

Earlier during the week, in its latest monthly report, OPEC reported that global oil demand will fall by 1.6 million barrels a day this year from a year ago. It also said the cartel increased its production in June for a third straight month. As per OPEC, oil demand will fall this year as the global economy is expected to contract 1.4%. The cartel, which accounts for about one third of the world's oil production, also said its oil production in June rose to 28.441 million barrels a day.

Also at the Nymex on Friday, gasoline for August delivery rose 5.64 cents (3.3%) to end the session at $1.7699 a gallon on the New York exchange.

Crude prices had ended FY 2008 lower by 54%, the largest yearly loss since trading began at Nymex.

At the MCX, crude oil for August delivery closed at Rs 3,149/barrel, lower by Rs 9 (0.28%) against previous day's close. Natural gas for August delivery closed at Rs 188.7/mmbtu, lower by Rs 2.6/mmbtu (1.35%).

Precious metals end higher

Prices rise on stronger thane expected housing data

Precious metal prices ended higher on Friday, 17 July, 2009. A better than expected housing report from the Commerce Department together with the dropping dollar boosted gold prices.

Generally, a stronger dollar pressures demand for dollar-denominated commodities, such as crude oil and gold, which become more expensive for holders of other currencies and also vice versa.

On Friday, gold for August delivery ended at $937.5, higher by $2.1 (0.2%) an ounce on the New York Mercantile Exchange. For the week, gold ended higher by 2.7%. Year to date, gold prices are higher by 5.7%.

For the month of June, 2009, gold ended down by 5.4%. Gold had ended the month of May higher by 9.8%. It was the highest monthly gain registered by gold in six months. For the second quarter, gold ended higher by 0.5%. The metal had gained 4.3% in the first quarter of this year.

On 17 March, 2008 prices had skyrocketed to a high of $1,034/ounce. But prices have dropped somewhat (11%) since then.

On Friday, Comex silver futures for September delivery rose 16.8 cents (1.3%) at $13.403 an ounce.

Silver ended 13% down for the month of June, 2009. For the month of May, silver gained 26.6%. It was the biggest monthly gain for silver in more than two decades. For second quarter, silver rose 4.5%. Year to date, silver has climbed 18.6% this year. For 2008, silver had lost 24%.

The Commerce Department in US reported on Friday that home-building starts rose 3.6% to an annual rate of 582,000, the highest since November, 2008. Building permits, a sign of future construction, jumped the most in a year.

In the currency market on Friday, the dollar fell against its counterparts. The dollar index fell by 1% for the week.

In 2008, gold prices ended higher by 5.5%. The dollar index had gained 12% that year.

At the MCX, gold prices for August delivery closed higher by Rs 9 (0.061%) at Rs 14,763 per 10 grams. Prices rose to a high of Rs 14,770 per 10 grams and fell to a low of Rs 14,750 per 10 grams during the day's trading.

At the MCX, silver prices for September delivery closed Rs 2 (0.009%) lower at Rs 22,051/Kg. Prices opened at Rs 22,054/kg and fell to a low of Rs 22,025/Kg during the day's trading.

SGX Nifty in the green

4,435.0 +37.0

Daily News Roundup - July 20 2009

The government has formally has sought a stay on the Bombay High Court order that directed Reliance Industries to supply gas to RNRL at US$2.34 mBtu. (ET)

George Soros’ hedge fund Quantum has hiked its stake in Educomp Solutions, to nearly 6%.(BL)

TCS targets US$3bn in revenues from BPO in five years.(BL)

Jindal Steel & Power plans to acquire a thermal coal mine in South Africa for around Rs3.5-Rs4bn. (ET)

The government will consider a strategic sale of Maytas Infra, if the board makes a recommendation. (ET)

The government asks Natco Pharma to recall its breast cancer drug Albupax from the market within two weeks. (ET)

JP Associates raises Rs10bn through issue of non-convertible debentures to Standard Chartered India. (ET)

JP Associates plans to raise another Rs10bn through NCD route in the October-December quarter. (ET)

Tata Motors may pay Rs3bn for JLR’s breach of contract with Ford. (ET)

Unitech Wireless gets both national and international long distance licences. (ET)

DLF plans to raise Rs9bn via selling its wind energy business. (ET)

Reliance Infrastructure emerged as the highest bidder to develop and operate small airports at Nanded, Latur, Yavatmal, Baramati and Osmanabad in Maharashtra. (ET)

THE ADAG Group plans to set up a 5mn tonne integrated plant and a grinding unit in Maharashtra with an investment of Rs22.5bn. (ET)

Pfizer hikes its stake in its Indian arm, Pfizer India, from 41.2% to around 72% through its open offer. (ET)

Goa Carbon plans to set up a manufacturing unit in China jointly with annual capacity of 1mn tonne. (ET)

The government has penalized Kingfisher Airlines with a fine of Rs260mn for delay in payment of taxes. (ET)

Amtek Auto gets the approval from its shareholders for raising about Rs8.5bn through the issue of securities, including bonds and depository receipts. (ET)

Financial Technologies sells 5% stake in MCX-SX at Rs35 per share to IFCI for Rs2.5bn. (ET)

Omaxe arm enters into an agreement with Allahabad Development Authority for the development of a township in Allahabad on a proposed area of 1,535.12 acres. (ET)

The Essar Group enters into discussions with the UAE’s Dhabi Group, for investing in the telecom portfolio of its African assets. (ET)

Air India may have to pay a penalty of Rs1.25bn to Boeing and Airbus for deferring and canceling earlier orders for buying aircraft from them. (ET)

Vedanta plans to invest up to Rs700bn by 2011-12 in power projects. (ET)

ICI India plans to invest Rs2bn in a greenfield paint plant in South India. (ET)

Novartis will challenge a decision by the Intellectual Property Appellate Board that said its cancer drug Glivec was not patentable. (ET)

Wyeth in talks with the government to include its pneumococcal vaccine, Prevnar in the country’s national immunisation programme. (ET)

HDFC Bank plans to open 300 branches this fiscal, taking its total number of branches to over 1,700. (ET)

Maytas Infra sells stakes in in Cyberabad Expressway Pvt Ltd and Hyderabad Expressway Pvt Ltd to Terra Projects Ltd. (BS)

Adani Power may not develop its planned projects at Dahej and Kawai. (BS)

Exide Industries may exit its associate company in Australia, Ceil Motive Power Pty Ltd. (BS)

Corporation Bank plans to foray into the non-life insurance business and is in talks with a foreign player for a joint venture. (BS)

Sobha Developers is looking to raise Rs12bn by selling part of its land parcels in a bid to reduce its outstanding debt.(DNA)

Anil Ambani, Chairman of Reliance ADAG, plans to list his group’s media and entertainment arm, Reliance BIG Entertainment.(BL)

Indian Oil Corp to buy Cairn crude oil at a discount to Nigerian Bonny Light.(BS)

United Spirits to set up more distillation plants at Rs12.5bn.(BL)

CLB allows withdrawal of 4 government nominees from Mahindra Satyam board.(BL)

GVK Group has confirmed participation in the fresh bidding for the Rs121bn Hyderabad Metro Rail Project.(BL)

MTN seeks US$3.5bn to fund Bharti Airtel deal.(TOI)

Dolphin Offshore plans to rope in a partner for its proposed Rs4bn greenfield shipyard to be commissioned in Jafrabad, Gujarat.(BL)

Realty companies in India may get to keep all foreign funds for 3 yrs. (ET)

Foreign exchange reserves fell by US$560mn to $264bn for the week ended July 10.(BL)

India says no to legally binding emission reduction targets.(BL)

FDI limit in print media may be raised.(BL)

No-delivery period for share transactions will be removed for all corporate actions if a recommendation made by SEBI’s Secondary Market Advisory Committee is adopted.(BL)

Government of India filed a petition before the Supreme Court urging it to quash the 2005 agreement underlying the division of assets between the Ambani brothers.(DNA)

Centre’s customs duty revenues declined 37% yoy in April-June 2009 period.(BL)

Five domestic airlines owe Rs22bn to oil PSUs.(BL)

The cost of bank loans for hospitality firms may decline, with RBI proposing to keep such loans out of what is considered to be banks’ commercial real estate exposure.(Mint)

Persistence vs Resistance!

Money grows on the tree of persistence.

The bulls have been persistent against most odds thanks to global cues. Better quarterly numbers have aided the bulls. The gains seem to be more of a narrow rally in recent times. We expect an extension of last week’s advance, at least at start. The indices are fast approaching levels where high resistance is likely in the absence of fresh ‘good news’ and valuation concerns. As usual, earnings, monsoon and global factors will drive the sentiment. RIL, RNRL and other stocks linked to the gas dispute will be in focus as the Supreme Court kicks off its hearing in the controversial case.

Though a week of rains have brought some relief from the sweltering heat. Lack of rains in the northern hinterland, which contributes heavily to the kharif output remains a worry. An overall deficient monsoon could hurt India’s GDP prospects. And, though we have enough stockpiles, food inflation could rear its ugly head. A rebound in global commodity prices is the last thing we need. A bloated fiscal deficit and its proposed monetisation (though the FM denies it) could make matters worse. Gold could be a good investment though.

Results Today: BASF India, Ciba India, Essar Oil, GTL Infra, IDFC, JSW Steel, Merck, Mindtree, Peninsula Land, Sterlite Technologies, TRF and Triveni Engineering.

FIIs were net buyers of Rs1.42bn in the cash segment on Friday on a provisional basis while the local funds pulled out Rs5.35bn, according to figures published on the NSE web site. In the F&O segment, the foreign funds were net buyers at Rs845.7mn.

On Thursday, the foreign funds were net buyers in the cash segment at Rs2.92bn, as per SEBI data. With this, their net investment in Indian stocks this year has crossed the $6bn mark or nearly Rs300bn. Mutual Funds were net buyers of Rs1.46bn in the cash segment on Thursday.

Asian stocks were mostly up this morning, led by commodity and technology shares, after oil and metal prices gained and US housing starts unexpectedly rose.

The MSCI Asia Pacific (ex-Japan) Index added 1.4% to 103.98 as of 9:51 a.m. in Hong Kong. Japan is closed for a holiday. The regional index has rallied 24% in the past three months amid optimism stimulus policies around the world will revive the global economy.

Australia’s S&P/ASX Index gained 1.2%. New Zealand’s NZX 50 Index rose 0.4%, while South Korea’s Kospi Index climbed 1.7%. The Hang Seng in Hong Kong was up 2.8%.

The yen fell to a two-week low against the euro on speculation that European and US earnings this week will show that the global recession is easing, reducing demand for the Japanese currency as a refuge.

The yen weakened against all of the 16 most-active currencies. The dollar fell to the lowest level in more than two weeks versus the euro on speculation that New-York- based commercial lender CIT Group Inc. is moving closer to avoiding bankruptcy, reducing the appeal of safer assets such as the US currency.

US stocks closed higher on Friday, buoyed by encouraging results from the likes of IBM and Bank of America. IBM's improved outlook lifted the Dow Jones Industrial Average, but the broader market struggled as investors showed fatigue after a strong week.

The Dow gained 32 points, or 0.4%, to end at 8,743.94. The S&P 500 index ended just below unchanged at 940.38 and the Nasdaq Composite index ended just above the breakeven point, at 1,886.61.

The major stock indices fluctuated through the session as investors weighed the better-than-expected financial results with some reluctance after the run-up. Stocks ended higher for the week. It was the Dow and S&P 500's first up week - and the Nasdaq's second - in the past five.

US stocks rose on Thursday after JPMorgan Chase reported a better-than-expected quarterly profit. JPMorgan joined Intel and Goldman Sachs, both of which reported better-than-expected financial results earlier in the week.

Stocks have risen in the first big week of quarterly financial reports, following four down weeks on Wall Street. The broad S&P 500 gained 7% for the week, recovering almost all that it lost in the previous four weeks.

Dow component Bank of America reported a profit of 33 cents per share, down from 72 cents a year ago, but five cents more than what analysts were expecting. Shares lost 2%.

Citigroup reported a second-quarter profit of 49 cents per share, surprising analysts who were looking for a loss of 37 cents, on average. Citigroup lost 55 cents per share a year ago. Shares ended little changed.

CIT Group bounced 71% on reports that it is in talks with JPMorgan Chase and Goldman Sachs as it tries to avoid a bankruptcy filing. Shares fell 71% on Thursday after the small business lender said it won't receive a government bailout, raising fears that the company could collapse.

CIT helps fund as many as 1 million small businesses, but a collapse of the company is not seen as a risk to the broad financial system.

IBM reported higher quarterly earnings late on Thursday that topped estimates on lower revenue that missed forecasts. The IT leader also said that full-year earnings would come in at $9.70 per share versus a forecast of $9.20 per share. Shares gained 4%.

Google reported higher quarterly earnings late on Thursday that topped estimates, largely due to cost cutting. The Internet search leader also reported tepid revenue growth because of slowing ad sales. Shares fell 2.8%.

Dow component GE reported earnings of 26 cents per share, versus forecasts for 23 cents per share. GE lost 54 cents a year ago. Shares fell 6% on Friday.

June housing starts rose to a 582,000 unit annualized rate from a revised 562,000 in May. Economists had forecast starts would come in at a 530,000 unit annualized rate.

Building permits, which measure builder confidence, rose to a 563,000 unit annualized rate in June versus a revised 518,000 unit rate in May. Economists had expected a 524,000 unit rate.

Treasury prices slumped, raising the yield on the benchmark 10-year note to 3.64% from 3.57% on Thursday.

In currency trading, the dollar gained against the euro and the Japanese yen.

US light crude oil for August delivery rose $1.54 to settle at $63.56 a barrel on the New York Mercantile Exchange.

COMEX gold for August delivery rose $2.10 to settle at 937.50 an ounce.

European shares advanced on Friday. The pan-European Dow Jones Stoxx 600 index climbed 0.4% to 210.67, a level not seen since the start of the month to stretch weekly gains to about 7%.

UBS European equity strategists upgraded their 2009 year-end equity market target on Friday, citing a turn in the earnings cycle. UBS upped its FTSE Eurofirst 300 target to 1,000 from 900, which is above Friday's 871.05.

Germany's DAX index was up 0.4% at 4,978.40, unable to hold a momentary period above the 5,000 level during the trading day. The French CAC-40 index rose 0.6% to 3,218.46 and the UK's FTSE 100 index gained 0.6% at 4,388.75.

The Sensex surged by 495 points or 3.5% to end at 14,745 after touching a high of 14,800 and a low of 14,325. The index had opened at 14,325 against the previous close of 14,250.

The NSE Nifty shot up by 143 points or 3.3% to shut shop at 4,375.

Asian markets ended in the positive terrain. The Nikkei in Japan gained 0.5% at 9,395, Australia's S&P/ASX ended higher by 0.2% at 4,000. The Hang Seng index rose by 2.5% to 18,805.

In Europe, stocks were trading in the green. The FTSE in the UK was up 0.8% at 4,397. The DAX rose 1% at 5,000 and the CAC 40 gained 0.8% at 3,225.

Coming back to India, among the BSE sectoral indices, the BSE Auto index was the top gainer, surging by an impressive 5.5%, followed by the BSE Bankex index that was up 5%. The BSE Realty index rose 4.4% and BSE Teck index was up 4.4%.

The BSE Mid-Cap index jumped 2.5% and the BSE Small-Cap index rose 2.6%.

Within the Sensex, the major gainers were Reliance Infra, M&M, JP Associates, ICICI Bank, Tata Motors, Hero Honda, Hindalco and ITC. Among the major losers were, Sterlite, NTPC and Reliance Industries.

Outside the frontline indices, the top gainers included HCL Tech, Exide Ind, Petronet LNG, NMDC, Fortis Health, Rolta and Max India.

Among the big losers in the broader market were Biocon, Opto Circuit, Glaxo, Piramal Health, Nestle and Marico.

Telecom Sector

Telecom Sector

Colgate

Colgate

Result Estimates

Result Estimates