Justice does not help those who slumber but helps only those who are vigilant.
The bulls seem to be in slumber even as the rags to riches story of a Mumbai boy (Slumdog Millionaire) received global acclaim with 10 Oscar nominations after winning 4 Golden Globe trophies. Many rags to riches stories have been witnessed in the market but the last year or so has been the other way around.
Thankfully, despite the relentless flow of bad news, US stocks managed to prune their losses. Tech shares weren’t so lucky, though with Microsoft refusing to provide any guidance. The Dow had slumped 270 points in intra-day trading on the back of grim data on initial jobless claims and housing starts. European benchmarks too finished weaker. In Asia, stock indices are in the red, with Japan taking a big hit on dismal earnings from regional electronics giants - Sony, LG and Samsung.
Coming back to India, we expect another choppy day as Reliance Industries’ better-than-expected results will be offset by bleak global cues. RIL has surprised the market by surpassing all optimistic estimates. The index bellwether may see some spark at least in early trades.
Auto and Realty stocks may hog the limelight amid news of fresh relief measures being considered by the Government. Airlines may also gain on news that a cabinet panel may take up the proposal to allow foreign carriers to pick up stake in Indian airlines. Overall, the key indices are likely to open flat, may rebound a bit but are unlikely to sustain any bounce.
Key Results Today: Asian Paints, Bharat Electronics, Canara Bank, Container Corp., Crompton Greaves, Edelweiss, Everest Kanto, Greaves Cotton, Gujarat Flurochemicals, HCL Tech, IDBI Bank, Indiabulls Financial, ING Vysya Bank, Jyothy Labs, Karnataka Bank, KLG Systel, M&M Financial, MRF, Mirc Electronics, PTC India, Punj Lloyd, RCOM, RNRL, Sanghvi Movers, Sriram Transport, Sona Koyo, Syndicate Bank, Tanla, Tech Mahindra, TV Today, Union Bank and Vijaya Bank.
US stocks staged a smart pull-back to end marginally down on Thursday, as a management shakeup at Bank of America and Microsoft's earnings disappointment weighed on investor sentiment.
The S&P 500 index retreated 1.5% or about 13 points to end at 827.5. The Dow Jones Industrial Average lost 105.3 points, or 1.3%, to close at 8,122.8. The Nasdaq composite index slumped 41 points or 2.8% to close at 1,465.49.
The Russell 2000 Index decreased 3.1%. The Dow at one point had been down as much as 270 points.
US stocks slid on Tuesday on banking woes, rallied on Wednesday on IBM's earnings and bouncing bank stocks, and then sold off again for most of Thursday.
Microsoft's earnings decline and job cuts were a big negative for sentiment because it confirms that the recession is hitting a broad range of industries. Ex-Merrill Lynch CEO John Thain's departure from Bank of America added to nervousness about the leadership at the big banks.
After rallying between late November and early January, US stocks have been sliding over the last two weeks. The credit crunch had looked like it was thawing near the end of last year, but now that seems to have slowed down. In such an environment, stocks will have a hard time breaking out of the recent range.
Thain will leave Bank of America amid criticism of his management of Merrill - purchased by BofA a month ago. Bank of America shares lost 14.5%.
Citigroup said late on Wednesday that former Time Warner chairman Richard Parsons has been named its new chairman. Last week, the company announced it was splitting its business in two.
Separately, it was reported that the chief executives of Bank of America and Citigroup bought some company stock last week, according to SEC filings. This failed to reassure investors. Citigroup shares fell 15.3%.
Aflac shares fell after Morgan Stanley raised worries about its exposure to certain securities issued by hard-hit European financial firms, according to reports. Shares of the insurer lost 37%.
Microsoft led the parade of technology companies issuing weak profit reports or big job-cut announcements. Microsoft said it will cut up to 5,000 jobs over the next 18 months due to the impact of the recession. The company also reported lower fiscal second-quarter earnings that missed estimates on higher revenue, that also missed estimates. Shares fell 11.7%.
Nokia posted a bigger-than-expected drop in fourth-quarter sales and earnings, and warned that 2009 is looking tougher than previously thought. Shares fell 10%.
eBay reported a lower fourth-quarter profit that nonetheless topped estimates. The online auctioneer also issued a current-quarter profit forecast that is short of expectations. Shares fell 12%.
Housing starts and building permits both tumbled to record lows in December, the government reported. Permits fell 10.7% from November to an annual rate of 549,000 in December. Starts fell 15.5% from November to an annual rate of 550,000. The declines were worse than expected.
Another report, from the Federal Housing Finance Agency, showed that home prices fell a record 1.8% in November from October levels.
A separate report showed that weekly claims for unemployment rose to a 26-year high last week, rising 62,000 from the previous week to 589,000. That was a bigger rise than what economists were expecting.
Treasury prices slipped, raising the yield on the benchmark 10-year note to 2.59% from 2.52% on Wednesday. Treasury prices and yields move in opposite directions. Yields on the 2-year, 10-year and 30-year Treasurys all hit record lows last month.
Lending rates tightened. The 3-month Libor rate increased to 1.16% from 1.12% Wednesday. Overnight Libor rose to 0.21% from 0.19% on Wednesday. Libor is a bank-to-bank lending rate.
US light crude oil for March delivery rose 12 cents to settle at $43.67 a barrel on the New York Mercantile Exchange. Gasoline prices rose two-tenths of a cent to a national average of $1.85 a gallon.
The dollar fell versus the euro and gained against the yen. COMEX gold for April delivery rose $8.80 to settle at $860.50 an ounce.
After the close, Google reported higher sales that beat estimates and lower earnings that also topped estimates. Shares gained almost 3% in extended-hours trading. General Electric (GE) is also bound to be active Friday morning, after it reports quarterly results.
After witnessing a sharp cut in the previous trading session, Indian bourses managed to end with marginal gains. Markets ended in the green after three straight days of losses. Markets started off with smart gains following firm cues from the international equity markets. However, were unable to sustain as profit booking and a rise in inflation data slightly dampened the sentiments. Finally, the BSE benchmark Sensex marginally gained 35 points to close at 8,813 and the Nifty added 7 points to close at 2,713.
Among the 30-components of Sensex, 15 stocks ended in the red and 15 stocks ended in the positive terrain. Among the major gainers in Sensex were Reliance Industries, Bharti, ICICI Bank, HDFC and BHEL.
Among the major losers were L&T, Tata Steel, Reliance Infra and DLF.
Shares of Ipca Laboratories slipped by 4% to Rs340 after the company reported results for the third quarter ended 31st December 2008.
The net profit for the third quarter fell by 40% to Rs231.8mn as against profit of Rs383.4mn in the same quarter of previous year.
The net total income rose by 14% to Rs3.13bn as against Rs2.73bn in the same period of previous financial year. The scrip touched an intra-day high of Rs375 and a low of Rs332 and recorded volumes of over 95,000 shares on BSE.
Shares of Praj Industries declined by 5% to Rs51 after the company announced results for the quarter ended December 31, 2008:
The Company posted a net profit of Rs473.10mn for the quarter ended December 31, 2008 as compared to Rs394.5mn for the quarter ended December 31, 2007.
Total Income increased from Rs1,861.5mn for the quarter ended December 31, 2007 to Rs2,199.1mn for the quarter ended December 31, 2008. The scrip touched an intra-day high of Rs56 and a low of Rs50 and recorded volumes of over 1,00,000 shares on BSE.
Shares of Bharti Airtel advanced by over 6% to Rs619 after the company announced its financial results (Indian GAAP) for the fiscal third quarter with a consolidated net profit at Rs19.76bn compared to Rs17.14bn in the previous quarter.
Consolidated revenue for the quarter ended December 31, 2008 stood at Rs96.67bn as against Rs89.23bn in the July-September quarter. The scrip touched an intra-day high of Rs623 and a low of Rs588 and recorded volumes of over 14,00,000 shares on BSE.
Shares of United Spirits plunged by over 23% to Rs567 after the company's Q3 FY09 performance was considerably worse than consensus estimates. While net sales growth of 16% YoY was broadly in-line, net profit crashed by 65% (against consensus expectation of 20% YoY growth) as higher raw material and interest costs played havoc.
Gross margin dropped 9.6ppt YoY, while interest costs rose 61% YoY. Volume growth was robust at 20% YoY, but this did not translate into strong growth, pointing to a potential downtrading. The scrip touched an intra-day high of Rs740 and a low of Rs496 and recorded volumes of over 45,00,000 shares on BSE.
Better than expected quarterly results by index bellwether Reliance Industries may provide the much needed boost. Also if international markets fare well overnight a positive start to Friday’s trading session cannot be ruled out.