The world has achieved brilliance without wisdom, power without conscience. Ours is a world of nuclear giants and ethical infants.
There could be some jitters at the outset, with North Korea reportedly having conducted a nuclear test. The Kospi in Seoul tumbled in the wake of the news, but has since recovered. Other Asian stock indices, barring the Nikkei are also mostly down. We expect a flat to slightly negative opening and a sideways day of trading. US markets are shut today for Memorial Day.
The fact that the euphoria was overdone leaves scope for some more softening. But, there is no need to panic, as the downside appears to be limited. Overall, the intermediate trend remains up and in the medium term too things should improve substantially. The return of the UPA with a much better numerical strength raises hope of better times ahead for the Indian economy. The fact that the stand-off between Congress and the DMK has been resolved also augers well.
Investors should look for more concrete signs of recovery. If no such signs emerge, the market could fall. But if the outlook brightens up further, a painful selloff may be avoided. Volatility might pick up ahead of Thursday's F&O expiry. Market players will also have to keep an eye on the GDP numbers that will be announced on Friday. Developments in the global markets and trend in FII flows continue to have a bearing on the market sentiment.
Key Results Today: Dishman Pharma, Jet Airways, Karnataka Bank, Omnitech InfoSolutions and REC.
US stocks slumped on Friday, ending the week little changed, as investors went into a holiday weekend with lingering concerns about the economy.
The Dow Jones Industrial Average lost 15 points, or 0.18%, to close at 8277.3. It was the Dow's fourth straight loss, but it still managed to end the week with a slight gain. The S&P 500 index slipped 0.15% to 887 but was up 0.5% for the week. The Nasdaq Composite index slid about 0.2%.
Stocks seesawed in early trading before heading higher in the afternoon as concerns about the US credit rating abated. But the market sold off near the closing bell. Analysts said that the market lacked conviction because many investors were absent ahead of the Memorial Day holiday on Monday.
Shares of financial services companies were under pressure after BankUnited FSB went bankrupt on Thursday, becoming the largest bank failure of the year.
Sears Holdings, the parent company of retailers Sears and Kmart, reported earnings that beat analysts' expectations and amended its credit facility to provide additional funding. Shares rose 11%.
Gap said that it earned 31 cents per share in the first quarter, down from 34 cents a year earlier, but slightly better than the 30-cent profit analysts had expected. Shares rose nearly 3%.
Another apparel retailer, Aeropostale reported better-than-expected first-quarter results and issued an upbeat profit forecast. The stock gained about 4%.
The US government said on Thursday that it invested $7.5bn in GMAC, the main source of financing for General Motors (GM) customers, and the main lender for Chrysler.
Treasury prices fell, raising the yield on the benchmark 10-year note to 3.46% from 3.36% on Thursday. The 10-year yield has not been this high since late December.
In currency trading, the dollar continued to fall against major international currencies. The euro rose 0.95% against the buck to $1.4022.
Oil for July delivery rose 62 cents to settle at $61.67 a barrel.
COMEX gold for June delivery rose $7.70 to settle at $958.90 an ounce.
A key home price index, durable goods orders and a revision of first-quarter GDP are all on tap for next week. Additionally, GM will be in focus. GM bondholders face a Tuesday deadline to make concessions under the troubled automaker's restructuring plans. GM could face bankruptcy if it fails to make the turnaround required by the government by the end of the month.
The market will also have to contend with lingering concerns about the credit ratings of some major economies. Last week, ratings agency Standard & Poor's (S&P) lowered its outlook for the United Kingdom (UK).
European stocks fell on Friday as Swiss investors returned from a holiday in a downbeat mood and drugmakers lost ground. The pan-European Dow Jones Stoxx 600 index declined 0.7% to 206.23, in what could be the second straight session of losses for the index.
The Swiss SMI index fell 1.9% to 5,401.59 as investors returned from the Ascension Day holiday to play catch-up with the rest of the European equity market which fell sharply on Thursday after S&P cut the UK's credit outlook.
Germany's DAX 30 index declined 0.4% to 4,881.71, while the French CAC-40 index slipped 0.3% to 3,208.03 and the UK's FTSE 100 index traded flat at 4,343.77.
Indian market ended with smart gains on Friday after declining for two straight trading sessions. Bulls’ partially recovered previous day’s losses as few hours from now Dr. Manmohan Singh will create history by becoming only the second Prime Minister of India to be sworn in for a second successive five-year term after completing the first one. Dr. Singh will be sworn in by President Pratibha Patil around 6:30 p.m. (1200 GMT) at the Rashtrapati Bhavan.
The Capital Goods, Banking and Pharma stocks were in demand. The Mid-Cap and the Small-Cap stocks continued their run; however saw offloading in some pockets.
Finally, the BSE Sensex advanced 150 points or 1.1% to close at 13,887 after touching a high of 13,937 and a low of 13,611. The index had opened at 13,663 against the previous close of 13,736. The NSE Nifty gained 22 points or 0.5% to shut shop at 4,233.
Among the BSE Sectoral indices BSE Capital Goods index was the top gainer adding 2.7%, followed by the BSE Pharma index up 2%, BSE Bankex index up 1.7%, BSE Oil & Gas index up 1.2% and BSE IT index up 1%.
On the other hand, the BSE Consumer Durable index was the top loser down 1.5% and BSE Auto index down 1%.
In the Sensex, L&T, ICICI Bank, Reliance Industries, NTPC, Sun Pharma, Infosys, SBI, HDFC and Tata Power ended in the green today. However, among the major losers were Sterlite, M&M, ONGC, Tata Motors, ACC, DLF and Hindalco.
Outside the frontline indices, the top gainers included Religare, Fortis Healthcare, Tech Mahindra, Praj Industries, SCI, Moser Baer, Mphasis, IFCI and Financial Tech.
Among the big losers in the broader market were Federal Bank, Tata Chemicals, Cummins India, Gail, Titan, Sun TV and Ultratech Cement.