Trouble is only opportunity in work clothes.
Stock markets provide opportunities at all times. Last year’s crash was one of them. The current consolidation is no exception either. Today we expect a flat start due to subdued global markets. In the near-term, the key indices will continue to swing in a range, which is pegged at 4900-5200 on the Nifty. To ride out this volatility one needs to focus on one’s portfolio. Get rid of the laggards and bet on companies with good earnings visibility.
As far as the global markets go, concerns about Dubai's debt troubles appear to be easing. World trade in equities continues to be driven by the US dollar’s weakness. Risky assets such as emerging market equities and currencies are being lapped up. Commodities too have benefited. Gold is hitting new highs every day.
But, the rise in risk appetite is being tempered by some degree of caution after the spectacular rally from the lows of March. From here on, incremental ‘good news’ has to be really strong for the current momentum to sustain. A big worry is on how the ‘exit’ strategies unfold.
Though long-term prospects for India remain positive, a number of factors could pose a challenge. Among the key ones include an imminent hike in interest rates, spiraling inflation, a yawning fiscal deficit, anemic credit growth, bleeding exports and shrinking tax receipts.
FIIs were net buyers in the cash segment on Wednesday at Rs8.86bn on a provisional basis. The local funds were net sellers of Rs2.14bn, according to figures published on the NSE's web site. In the F&O segment, the foreign funds were net buyers at Rs2.51bn. FIIs were net buyers of Rs22.94bn on Tuesday. FIIs' net investments in Indian stocks this year have crossed $159bn.
US stocks struggled for direction on Wednesday as investors sought more evidence that a recovery is for real, one day after the Dow Jones Industrial Average closed at its highest point in 14 months.
The Dow lost 19 points, or 0.2%, to 10,452.68. The blue-chip average ended the previous session at the highest point since Oct. 2, 2008. The S&P 500 index ended little changed at 1,109.24. The Nasdaq Composite index rose 9 points, or 0.4%, to 2,185.03.
Investors sorted through the day's news and geared up for the big monthly jobs report due on Friday. Ahead of that, investors will keep an eye on Thursday's weekly jobless claims report from the Labor Department.
The Federal Reserve released its periodic "Beige Book" reading on economic conditions in the nation's 12 districts. The central bank said that economic conditions have improved modestly since its last report in the third week of October. However, labor market conditions remained weak and commercial real estate markets deteriorated.
Wall Street had rallied on Tuesday as worries about Dubai's debt problems eased, pushing the Dow to a 14-month high. The Nasdaq and S&P 500 both closed short of 14-month highs.
GM's CEO Fritz Henderson resigned late on Tuesday and will be replaced by chairman Ed Whitacre on a temporary basis, until a successor can be found. Henderson was a 25-year GM veteran who took over as CEO in March after Rick Wagoner was forced out by the Obama administration as part of GM's government-supervised restructuring.
Payroll services firm ADP said that US employers in the private sector cut 169,000 jobs from their payrolls in November versus forecasts for cuts of 150,000 jobs. Employers cut 196,000 jobs in October.
The report is seen as something of a precursor to the broader monthly labor market report in which employers are expected to have cut 120,000 non-farm payroll jobs in November after cutting 190,000 in October.
Employers announced 50,349 planned job cuts in November, according to another report from outplacement firm Challenger, Gray & Christmas, down 9.6% from October and the lowest number in almost two years. But the total number of cuts announced this year have already outpaced last year's total.
COMEX gold for February delivery rallied $12.80 to settle at $1,213 an ounce, a new closing high. Gold rose as high as $1,218.40 during the session.
The dollar gained versus the euro and the yen after hovering in mixed territory in the morning.
US light crude oil for January delivery fell $1.77 to settle at $76.60 a barrel on the New York Mercantile Exchange.
Treasury prices slipped, raising the yield on the 10-year note to 3.31% from 3.28% late on Tuesday.
European shares edged higher, extending sharp gains from the previous session. The pan-European Dow Jones Stoxx 600 index rose 0.4% to 246.52. The index ended with a 2.7% gain on Tuesday, its best one-day percentage advance since July 15.
The Stoxx 600 index is showing a gain of 24.2% year-to-date and can continue to advance from these levels, according to strategists at ING who raised their 2010 target to 310 on Wednesday.
The UK's FTSE 100 index closed up 0.3% at 5,327.39, while the German DAX index gained 0.1% to 5,781.68 and the French CAC-40 index added 0.5% to 3,795.92.
Indian markets ended flat amid high volatility on Wednesday as bulls ran out of steam after a two day rally. Strong overnight cues from the US and the Asian markets aided the Nifty inch closer to the 5182 levels (52-week high). However, key indices were unable to hold on as traders and investors preferred to book some profits at higher levels.
The shipping sector was in demand mainly on account of the takeover Saga between Bharati Shipyard and ABG Shipyard. Shares of Great Offshore ended with losses. The Auto and the Realty stocks also were among the top gainers however, the FMCG, select IT and Power stocks were among the major losers.
The BSE Sensex slipped 28 points at 17,169 after touching a high of 17,329 and a low of 17,142. The index opened at 17,254. The NSE Nifty ended flat to shut shop at 5,123.
In Asia, the Nikkei in Japan was up 0.4%, while Australia's S&P/ASX ended higher by 1%. Shanghai SE Composite in China gained 1% and Hang Seng index in Hong Kong was up 0.8%.
In Europe, stocks were mixed. The FTSE in the UK was down 0.2%, The DAX in Germany was flat and the CAC 40 index in France was up 0.2%.
Among the 30-components of Sensex, 19 stocks ended in the red and 11 ended in the positive terrain. HDFC, BHEL, ONGC, ITC and HUL ended in the negative terrain. Among the major gainers were Tata Motors, ICICI Bank, HDFC Bank, DLF and SBI.
Shares of Sun Pharma erased early gains and ended lower by 3% to end at Rs1497. The stock hit intra-day high of Rs1638 after the company announced that it received the support of Templeton Asset Management to acquire Israeli drugmaker Taro Pharmaceutical, Templeton Chairman Mark Mobius was quoted as saying.
He added, Supreme Court in Israel should pass a decision quickly so that Sun can take control of Taro. Templeton owns a 10% equity stake in Taro. The scrip opened at Rs1564 it hit an intra-day low of Rs1486 and recorded volumes of over 0.46mn shares on NSE.
Shares of Tata Elxsi were locked at 20% upper circuit to end at Rs203.65 after reports stated that the company’s sales may reach US$400mn within three years. The scrip opened at Rs172 it touched an intra-day high of Rs203 and a low of Rs172 and recorded volumes of over 2mn shares on NSE. The stock had hit its 52-week low of Rs75 on March 06, 2009.
ABG Shipyard and Eleventh Land Developers Pvt. Ltd. (ELDPL) (a wholly owned subsidiary of ABG), announced the sale of 3.078mn shares of Great Offshore (being approximately 8.27% of current paid up shareholding of Great Offshore Ltd.) through a stock market sale. Consequent to this Transaction, the cumulative shareholding of ABG and ELDPL in Great Offshore Ltd. is Rs571 shares.
Bharati Shipyard announced that the Board of Directors decided to revise the open offer price of equity shareholders of Great Offshore to Rs590 per share.
Thus, the offer price per equity share stands revised at Rs590 per share for the open offer for 78,26,788 equity share representing 20% of the emerging voting capital of Great Offshore Ltd.
Shares of ABG Shipyard shot up by over 9% to end at Rs205 and Bharti Shipyard also surged over 11% to end at Rs177.
Shares of LML have advanced by 4.4% to Rs9.55 after the company announced that it started legal proceedings against Piaggio & C. SpA, Italy for breach of Settlement & Clean Break Agreement dated November 15, 1999 by invoking arbitration under the Singapore International Arbitration Centre (SIAC), Arbitration Rules, Singapore.
The scrip opened at Rs9.25 it touched an intra-day high of Rs10.50 and a low of Rs9.15 and has recorded volumes of over shares 2.3nm on NSE.