Everybody's private motto: It's better to be popular than right.
Populist measures may be signaled off today with the interim railway budget doling out some stuff to keep voters on track. At the same time, the Government will incorporate further stimulus measures to accelerate economic growth during the vote-on-account on Monday. There may be some sops for sectors like Housing, Infra, IT, Auto and export-centric industries. Some tinkering with indirect taxes may also be on the cards to bolster spending. As a result, the market may turn a little higher after this week’s setback.
We expect the key indices to pull back after Thursday’s fall. The US market erased losses and turned higher late in the session on reports that the Obama regime was preparing a plan to subsidize mortgages of troubled home owners. European indices fell for a third straight day on Thursday. The good thing for India is that most Asian markets are up smartly this morning.
However, the overall mood still remains glum and any advance is unlikely to sustain for long. For now ride the Popular Express but don’t forget to get off when you reach your destination.
US stocks reversed most of their losses and turned higher in late session on Friday amid market talk that the Obama administration was firming up a new rescue plan to help troubled home owners.
The Dow Jones Industrial Average lost 6 points, or 0.1%, to close at 7,932.76, closing below 8,000 for the third straight session. The Dow had lost as much as 245 points in the afternoon, hitting its lowest level since Nov. 21 - considered by many to be the low of the bear market.
The Standard & Poor's 500 index finished flat, up a measly 0.2%, at 835.19. The Nasdaq Composite index gained 11 points, or 0.7%, to end at 1,541.71.
Questions about the bank bailout plan and economic stimulus bill dragged on US stocks throughout the session on Thursday. The selling gained steam after the release of a bleak report on home prices.
But stock benchmarks erased losses and the Nasdaq turned higher after reports surfaced that the Obama administration is working on a plan to modify home loans, a move that could help stabilize the flailing industry.
US stocks had risen on Wednesday, finding momentum at the end of a choppy session, after lawmakers announced that the Senate and House had reached a compromise deal on a $789bn economic stimulus package. The bill is expected to be voted on by the two houses on Friday, meeting President Obama's goal of having it on his desk to sign by on Monday, Presidents Day.
Thursday morning, the National Association of Realtors said that home prices fell 12.4% in the fourth quarter of last year. The decline left prices at the lowest level since 2003.
Another report showed that unemployment claims fell last week, but remained near a 26-year high. The government reported that the number of Americans filing new claims for unemployment fell by 8,000 last week to a seasonally adjusted 623,000.
The Commerce Department released its January retail sales report. Retail sales rose 1% after falling for six straight months, fueling skepticism from economists. Economists thought sales would fall 0.8% in the month. Sales, excluding volatile autos, rose 0.9% versus forecasts for a drop of 0.4%.
Investors continued to react to the Obama administration's bank bailout plan announced earlier in the week, which was seen by critics as lacking details. On Wednesday, Geithner testified before the Senate Budget Committee, but was vague on details. Also on Wednesday, executives at eight of the largest financial institutions testified before a House committee regarding how they are using the bailout money they've already been given.
Big bank shares cut losses, but remained in the red on Thursday, despite the broad market turnaround. The KBW Bank Sector index fell 2.8%. General Electric (GE) shares continued to trade in tune with the financial sector, as investors focused on the prospects for its GE Capital unit.
A bright spot was Dow component Coca-Cola which rallied after it reported a better-than-expected quarterly profit, thanks to strong global sales. Its shares rose 7.6%.
Select technology shares gained, lifting the Nasdaq, including Qualcomm, Dell and Apple.
Treasury prices inched higher, lowering the yield on the benchmark 10-year note to 2.78% from 2.79% on Wednesday. Treasury prices and yields move in opposite directions.
Lending rates were unchanged. The 3-month Libor rate held steady at 1.23%, according to Bloomberg.com. The overnight Libor rate held steady at 0.30%. Libor is a bank lending rate.
US light crude oil for March delivery fell $1.96 to settle at $33.98 a barrel on the New York Mercantile Exchange. Gasoline prices rose 1.2 cents to a national average of $1.952 a gallon.
The dollar gained against the euro and the yen. COMEX gold for April delivery rose $4.70 to $949.20 an ounce.
Friday's economic report of note is the University of Michigan's February consumer sentiment index. The index is expected to have weakened to 60.2 from 61.5 in the previous month, according to a consensus of economists.
European shares fell for the third session in a row, with downbeat results from top firms like BT Group, Capgemini and EdF contributing to a bearish view over the global economy.
The pan-European Dow Jones Stoxx 600 index fell 1.3% to 190.64, bringing 12-month losses to 41%.
The economic difficulties were underlined with data showing euro-zone industrial output dropped 12% in December.
The French CAC-40 index declined 2.1% to 2,964.34, falling back under the 3,000 level, Germany's DAX 30 index dropped 2.7% to 4,407.56 and the UK's FTSE 100 index fell 0.8% to 4,202.24.
It was second straight trading session where markets ended in the red. Weak global cues coupled with poor Industrial Production numbers dragged the Indian bourses lower. Even, a sharp fall in inflation figures failed to prop up the sentiments on Dalal Street.
The IT, telecom, oil & gas and capital goods stocks were under pressure. However, on the other hand, the realty and auto stocks were demand.
Finally, the Sensex marginally slipped 168 points to close at 9,465 and the Nifty slipped 32 points to close at 2,893.
Among the 30-components of Sensex, 22 stocks ended in the negative terrain and 8 stocks ended in the green. The major losers in the Sensex were JP Associates, Ranbaxy, Bharti, Infosys, ICICI Bank and Maruti.
Shares of Patni slipped by 2.7% to Rs109. The group posted a flattish net profit of Rs4380.10mn for the Year ended December 31, 2008 as compared to Rs4836.30mn for the Year ended December 31, 2007.
Total Income increased from Rs27750.30mn for the Year ended December 31, 2007 to Rs32476.10mn for the Year ended December 31, 2008. The scrip touched an intra-day high of Rs116 and a low of Rs108 and recorded volumes of over 1,00,000 shares on BSE.
Shares of Archies and Vintage cards attracted buying interest ahead of Valentines Day on 14th February.
Archies pared early gains and ended flat at Rs49.4, the stock had hit an intra-day high of Rs53.8 and recorded volumes of over 55,000 shares on BSE. While, Vintage Cards advanced by 2.5% to Rs14.5 and recorded volumes of over 8,000 shares on the BSE.
Shares of Dhanus Technologies surged by over 3% to Rs18. The company announced that it promoters pledge 39.82% stake. The scrip touched an intra-day high of Rs18.3 and a low of Rs17.5 and recorded volumes of over 65,000 shares on BSE.
Shares of Tata Power slipped by 1.5% to Rs797. According to reports, the company announced that it would import 7mn ton coal for its proposed power plants. The scrip touched an intra-day high of Rs809 and a low of Rs792 and recorded volumes of over 1,00,000 shares on BSE.
Shares of Spice Tele sky rocketed on Thursday not withstanding market regulator SEBI’s move to probe the unusual price movement in the stock in the recent trading sessions.
The stock shot up by over 50% to Rs78.8 after hitting an intra-day high of Rs83 and an intra-day low of Rs49 recording volumes of 10mn shares on the BSE.
Another shocker was the unusual price surge seen in Hexaware. The stock shot up by over 65% at Rs33 after hitting an intra-day high of Rs42 and a low of Rs20 and recorded volumes of over 10mn shares on BSE.
Shares of Power Grid Corp surged by voer 5% to Rs91 after the MSCI announced that it add Power Grid to the emerging market index from February 27.
On the other hand, Satyam Computers would be excluded fro the MSCI index, however it would be added to the emerging market small-cap index, the stock fell 1.5% to Rs46.1.