Nothing fixes a thing so intensely in the memory as the wish to forget it.
Though most market players in India are currently focused on the Railway Budget and Union Budget one must not forget we are still in the midst of a global economic crisis. Even the Economic Survey has based its FY10 GDP growth projection on the global recovery, especially in the US.
The US economy shed 467,000 jobs last month, and the unemployment rate rose to 9.5%, its highest level in 26 years. Euro-zone unemployment rate has also hit a 10-year high. Three more US banks have failed, bringing the year's total to 51. Meanwhile,, the ECB left its key lending rate unchanged at an all-time low of 1%.
However, the Asian markets are down but not as much as their western counterparts. Wall Street will enjoy an extended Independence Day weekend with US markets shut today. We expect a slightly lower opening, which should not be as bad as the one witnessed by the US and Europe. After yesterday's collapse, there might be a mild recovery.
The NSE Nifty could find strong option related support at 4200 levels. The Union Budget is just a couple of days away and further course of action should be decided post that only. Volatility will prevail ahead of Union Budget. Railway-related stocks may swing as Mamata Banerjee unveils the Railway Budget today. High time you get out of those counters today. Stocks which could be in action would be BEML, Titagarh Wagon, Kalindee Rail Nirman, Texmaco and Kernex Micro.
Monsoon seems to have picked up momentum after a delayed start. But, will economic growth too follow suit is anybody’s guess. Passage of a few crucial reforms is critical for India to return to its high growth path of 7-8%. The Economic Survey has made all the right prescriptions. The million dollar question is whether the UPA can muster enough gumption to follow the same.
Among the biggest worry is the ballooning fiscal deficit. The intent is clearly there as far as UPA II is concerned, what is needed badly is the courage to execute the remedies suggested in the Economic Survey.
FIIs were net buyers in the cash segment on Thursday at Rs2.47bn while the local institutions too poured in Rs2.13bn. In the F&O segment, the foreign funds were net buyers at Rs957.6mn. On Wednesday, FIIs were net buyers at Rs1.64bn in the cash segment.
The BSE says that it will probe the technical snag that led to discrepancies in scrip rates on Thursday. In fact, even the NYSE witnessed some "system irregularities" and had to extend the trading session.
The results season will kick off in the US on Wednesday, when Alcoa reports its financial data. Otherwise, a quiet week lies ahead with President Barack Obama out of the country and little economic data due. The central banks of South Korea and Australia are likely to keep rates on hold next week, while the Philippines is likely to cut rates. Indonesia will hold presidential elections on Wednesday.
US stocks tumbled on Thursday, with the Dow losing over 200 points, after a worse-than-expected jobs report hammered hopes that the economy is close to stabilizing.
The Dow Jones Industrial Average fell 212 points, or 2.5%. The S&P 500 index lost 27 points, or 2.9% and the Nasdaq Composite index was down 49 points, or 2.7%.
The New York Stock Exchange extended trading, so as to allow customers to put through orders that were impacted by system irregularities. The NYSE did not specify what the irregularities were.
Stocks tumbled at the open and remained in the red throughout the session as investors considered the broader implications of the dismal June jobs report. Declines were broad based, with all 30 Dow stocks falling, led by oil components.
Economically sensitive trucking and railroad stocks plunged, dragging down the Dow Jones Transportation average by 3.7%. Financial shares too tumbled. Market breadth was negative and volume was light with Wall Street pros checking out early for the holiday.
All US financial markets are closed Friday for the Independence Day holiday.
The jobs report was kind of a rude awakening, prompting people to think that the stock market rally doesn't mean the US economy is coming back. What it could mean is that there is a lot more pain to be endured before there can be a recovery.
Since bottoming at a 12-year low, the S&P 500 had surged over 40% through June 11. But in the weeks since then, it has lost 5% of that.
In the April-June quarter, the S&P 500 gained 15.2%, its best quarter in more than a decade. The Dow rose 11% and the Nasdaq 20%. Both indexes posted their best quarters since the second of 2003.
American employers cut 467,000 jobs from their payrolls in June, after cutting 322,000 jobs in May, the Labor Department reported Thursday. That made June the first month in four in which job losses rose from the previous month. Economists had expected 365,000 job losses.
The unemployment rate, generated by a separate survey, rose to 9.5% from 9.4%, short of forecasts for an increase to 9.6%.
The weekly jobless claims report was overshadowed by the June payrolls report. The number of Americans filing new claims for unemployment fell to 614,000 last week from a revised 630,000 the previous week, the Labor Department reported. Economists had forecast claims would fall to 615,000.
May factory orders rose 1.2%, the Commerce Department reported, versus forecasts for a rise of 0.9%. Factory orders rose a revised 0.5% in April.
Exelon has sweetened its hostile takeover offer for rival power generator NRG Energy. The all-stock offer is $8 billion versus the previous offer of $7 billion.
Johnson & Johnson will take an 18% equity stake in biotech Elan in exchange for a $1 billion investment. J&J will also buy Elan's share of its Alzheimer's disease treatment program with Wyeth. US-traded shares of Elan gained 11% in active New York Stock Exchange trading.
Energy prices tumbled, with US light crude oil for August delivery falling $2.37 to $66.94 a barrel on the New York Mercantile Exchange.
COMEX gold for August delivery fell $10.60 to settle at $930.70 an ounce.
Treasury prices rallied, lowering the benchmark 10-year note yield to 3.5% from 3.53%.
In currency trading, the dollar gained versus the euro and fell against the yen.
European shares fell sharply on Thursday. The pan-European Dow Jones Stoxx 600 index declined 2.4% to 204.47, erasing the prior session's gains. Germany's DAX index dropped 3.8% to 4,718.49, while the French CAC-40 index declined 3.1% to 3,116.41 and the UK's FTSE 100 index fell 2.5% to 4,234.27.
Indian markets ended on a flat note on Thursday amid choppy trades. Traders and investors remained restrained ahead of the Railway Budget tomorrow and the Union Budget which would be presented on Monday.
The Economic Survey for FY09 was presented in the parliament today in which the government stated that the Indian Economy may grow as much as 7.75% in the current fiscal year ending in March 2010. Markets indeed reacted positively as the BSE Sensex hit the day’s high in the afternoon trades. However, a sudden bout of profit booking in scrips across the sectors dragged the benchmark indices to day’s low.
Bulls however dint give up as buying momentum in the index heavyweights like DLF, Tata Steel, ONGC and Grasim lifted the benchmark indices to end almost flat.
Inflation numbers continue to fall for the third straight week, the annual rate of inflation on point to point basis, stood at -1.30% for the week ended June 20, 2009 as compared to -1.14% for the previous week ended June 13, 2009 and 11.91% during the corresponding week ended June 21, 2008 of the previous year.
However, Wholesale Price Index for 'All Commodities' for the week ended June 20, 2009 rose by 0.2% to 234.6 from 234.2 for the previous week.
Meanwhile, throughout the day there were price discrepancies and confusion on select stocks as some stocks were trading above the circuit filters on the BSE.
Finally, the BSE Sensex ended flat at 14,658 after touching a high of 14,764 and a low of 14,470. The index had opened at 14,694 against the previous close of 14,645.
The NSE Nifty gained 8 points or 0.2% to shut shop at 4,349.
Asian markets ended in the red; the Nikkei index in Japan slipped 0.7% at 9,876, Australia's S&P/ASX ended flat at 3,877. Hang Seng index declined 1.1% at 18,178.
Elsewhere in the Europe, stocks were trading in the red. The FTSE index was down 0.7% at 4,313. The DAX index slipped 1.5% at 4,837. CAC 40 index was down 1.2% at 3,178.
Coming back to India, among the BSE Sectoral indices BSE Metal index was the top gainer gaining 3.2%, followed by the BSE PSU index up 2%, BSE Realty index up 1.5% and BSE Pharma index up 1%.
The BSE Mid-Cap index ended marginally higher by 0.3% and BSE Small-Cap index was up 0.8%.
In the Sensex, the major gainers were ONGC, Tata Steel, Grasim, Sterlite, DLF, Sun Pharma, HDFC and NTPC.
On the other hand, major losers were BHEL, Reliance Industries, Bharti, RCom, Tata Motors and Maruti.
Among the big gainers in the broader market were Torrent Power, GMDC, Sintex Ind, PFC, IRB Infra and REC Ltd.
Outside the frontline indices, the top losers included REI Agro, Bank of Baroda, Mundra Port, Biocon, Areva, Renuka Sugar and TTML.
Shares of oil marketing companies ended with gains after the Government on Wednesday hiked retail prices of petrol and diesel. Petrol has now become costlier by Rs4 per litre while diesel prices have been raised by Rs2 a litre. At the same time, prices of politically sensitive PDS kerosene and LPG have been left untouched.
The last time fuel prices were raised was on June 4, 2008. It was followed by two rounds of price cuts in December 2008 and January 2009, as global crude prices tumbled from record peak of around US$147 a barrel struck in August 2008. As a result, petrol became cheaper by Rs10 a litre and diesel by Rs4 a litre. But, since then, crude oil prices have more than doubled from US$33.98 a barrel on February 12.
Shares of Hindalco gained by 1.4% to Rs84.5 after the company reached an agreement and received lenders consent on revised terms including covenant relaxations relating to the US$ 982mn bank loan.
The new terms allow the company significant flexibility to plan its future business and pursue its capital expenditure aspirations going forward. Under the new agreement reached banks have agreed to waive requirement to test covenants on consolidated financials
Shares of McNally Bharat were locked at 5% upper circuit to Rs132 after the company announced that it won two orders worth Rs468.8mn. The scrip touched an intra-day high of Rs138 and a low of Rs124 and recorded volumes of over 87,000 shares on BSE.
Bajaj Auto total sales in June stood at 193,202 units versus 196,741 translating in to a 1.8% decline. Motorcycle sales were at 167,945 versus 175,903 units. Three Wheeler sales were at 24,731 versus 19,629 units. Exports also grew at 67,726 as against 64, 878 units.
The stock was down 3.1% to Rs977 after hitting an intra-day high of Rs1005 and a low of Rs963 and has recorded volumes of over 0.12nm shares on BSE.