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Monday, March 15, 2010

Monday morning exhaustion!


People choose the paths that grant them the greatest rewards for the least amount of effort.

Exhaustion seems to have got the better of the bulls and neither effort nor reward seems to be on the anvil. Stock indices continue to languish after a brief spurt post the Budget. The scenario is no different in global markets, though the US and Europe have held up well in the face of a few significant headwinds like weak labour market and debt issues.

Emerging markets like India and China have actually under-performed in the past few sessions. It remains to be seen when this trend changes. For now though, it looks like the market will remain in a state of flux for a while before there is any meaningful movement.

At the cost of being repetitive, we expect yet another dull opening and perhaps another trigger-hunting day. Advance tax numbers might lead to some shift in the undertone, though it will not make a big difference. Monthly inflation numbers will be another factor to watch out for. Fed policymakers will meet on Tuesday for a monthly review. All eyes and ears will be glued for the latest cues from the US central bankers.

FIIs were net buyers in the cash segment on Friday at Rs3.72bn on a provisional basis. Local funds were net sellers of Rs908.1mn, according to figures published on the NSE's web site. In the F&O segment, the foreign funds were net buyers of Rs4.24bn. On Thursday, FIIs were net buyers of Rs4.47bn in the cash segment, as per SEBI figures. Mutual funds were net sellers at Rs2.44bn on the same day.

Kiri Dyes & Chemicals Ltd. will announce a Strategic Corporate initiative in Mumbai today - (acquisition of Dystar) and future expansion plans.

US stocks ended virtually unchanged on Friday after a report showed a surprise rise in retail sales. But, the Dow, Nasdaq and S&P 500 continued to struggle for direction below their 18-month highs.

The Dow Jones Industrial Average added 12 points or 0.1%, to 10,624.69. The S&P 500 index and the Nasdaq Composite were little changed at 1,149.99 and 2,367.66, respectively. Both ended the previous session at their highest levels in a year and a half.

The dollar fell versus the euro and gained against the yen.

US light crude oil for April delivery fell 87 cents to settle at $81.24 a barrel on the New York Mercantile Exchange.

COMEX gold for April delivery fell $6 to $1,102.20 per ounce.

Treasury prices rose, lowering the yield on the 10-year note to 3.71% from 3.72% late on Thursday.

Through Friday's close, the Dow, S&P 500 and Nasdaq have all risen in nine of the last 11 sessions.

It has been quiet the last few weeks, but the bias remains positive. US stocks might continue to drift higher over the next few weeks, but any gains will be capped by continued concerns about the economic outlook both in the US and overseas.

The Dow could touch as high as 11,000, but at that point it is likely to meet some resistance.

Retail sales rose 0.3% last month, according to a Commerce Department report released Friday morning. Sales rose a revised 0.1% in January and were expected to fall another 0.2% in February, according to a consensus of economists.

Sales, excluding autos rose 0.8% in February after rising 0.5% in January. Economists thought sales would rise 0.1%.

The University of Michigan consumer sentiment index fell to 72.5 in early March from 73.6 in the previous month. Economists thought sentiment would rise to 74.

Business inventories were unchanged in February, after falling 0.2% in the previous month. Economists thought inventories would rise 0.1%.

US President Barack Obama wants to nominate San Francisco Federal Reserve Bank president Janet Yellen to become the next Federal Reserve vice chairman. If nominated and confirmed, Yellen would replace Donald Kohn, who is retiring as of June 23rd.

The collapse of Lehman Brothers was largely attributable to actions by its executives and auditor, according to a report by a US bankruptcy court.

European shares ended a choppy week with gains on Friday, after better-than-expected industrial production data.

The Stoxx 600 Europe index rose 0.4% to 258.52, the second day of gains in five sessions for the equity gauge. Over the week the index added 0.6%. The year-to-date gains for the index now stand at 1.8% - a small portion of its 12-month advance of 55%.

Industrial production from the 16-nation euro zone rose 1.7% in January and US retail sales climbed 0.3% in February.

Germany's DAX index rose 0.3% to 5,945.11 and the UK's FTSE 100 index was up 0.2% at 5,625.65, while the French CAC-40 index finished flat at 3,927.40.

Benchmark indices ended on a flat note for yet another trading session. After opening with positive gains, markets gradually slipped throughout the day. Volatility and volumes both were diminishing.

Despite strong FII inflow, the NSE Nifty was unable to surge past the 5190 levels throughout the week which is the crucial resistance level for the index. FIIs bought stocks worth Rs44.48bn in the past three days on the other hand DIIs were net sellers to the tune of Rs6.9bn in the past three days.

Breath was weak on the BSE for the third straight day. Out of total 2927 stocks, 1810 declined against 1027 advances and 90 remained unchanged.

The BSE Sensex ended flat at 17,166 after touching a high of 17,245 and a low of 17,127. The NSE Nifty ended unchanged at 5,137.

In Asia, the Nikkei in Japan ended with gains, adding 0.8%, while Australia's S&P/ASX ended flat. Shanghai SE Composite ended flat and Hang Seng index in Hong Kong edged was unchanged.

In Europe, stocks were in positive terrain. The DAX in Germany was up 0.5%, the CAC 40 index in France was up 0.5% and the FTSE in the UK was up 0.4%.

Coming back to India, among the BSE sectoral indices, the Realty index was the top loser, losing 0.8%, followed by the Capital Goods index that was down 0.6% and the BSE Power index was down 0.5%. Even, the BSE Mid-Cap index was down 0.2% and BSE Small-Cap index was down 0.4%.

Among the gainers were BSE Metal index up 0.6% and BSE Oil & gas index up 0.4%.

Outside the frontline indices, the big gainers in the broader market were Fortis Health, Cairn, Ackruti City and Allahabad Bank. On the other hand, losers included Renuka Sugars, Balrampur Chini, M&M Fin and OBC.

On a weekly basis, Indian markets underperformed the global peers. Benchmark indices remained in a very narrow range through out the week with the Nifty ranging between the 5090-5160 levels. Volatility and volumes were at lower levels.

However, what was seen is that the FIIs continued to be net buyers during the week, making purchases to the tune of Rs44.48bn in the past three days. The BSE Sensex hit an intra-week high of 17,244.54 and low of 17,027 while, the NSE Nifty hit an intra-week high of 5,158 and low of 5,092.