I'm a pessimist because of intelligence, but an optimist because of will.
The bulls are turning optimistic after a day’s breather and will most likely resume their shopping spree as healthy global cues remain the inspiring trigger. It's time to get realistic and not really pessimistic as the Budget-inspired rally in recent days do not make valuations too compelling. Take it stock by stock rather than get swayed by daily movement in the key indices. Small-cap and Mid-cap stocks may extend Thursday’s rally. But, weigh your risk-reward ratio well while dealing with this space. We expect a firm start, which should well hold till the end of the day. Monthly US jobs data is the key global event to watch out for today.
US stocks advanced, with the Dow Jones returning into the positive zone for the year, in the wake of encouraging reports on retail sales and initial jobless claims. The US dollar gained versus major currencies after a surprisingly weak report on pending home sales triggered worries about the pace of the economic recovery. Across the Atlantic, the picture was mixed in Europe. Japan led Asian shares higher this morning after reports that the Bank of Japan will likely consider further monetary easing.
FIIs were net buyers in the cash segment on Thursday at Rs6.34bn on a provisional basis while the local funds were net sellers of Rs6.36bn, according to figures published on the NSE's web site. In the F&O segment, the foreign funds were net buyers of Rs3.77bn. On Wednesday, FIIs were net buyers of Rs10.13bn in the cash segment.
The US House approved $15bn jobs bill. The measure, approved 217 to 201, is intended to spur job creation by granting payroll tax breaks to businesses that hire new workers.
US crude oil dipped after pushing above the $81 per barrel level in the previous session, while base metals made further gains as risk appetite strengthened.
Meanwhile, the Bank of England (BOE) and the ECB left key rates unchanged even as data showed that eurozone economy barely grew in the last quarter of 2009.
Greece’s 10-year bond offering was heavily oversubscribed, signaling strong interest from investors only a day after the nation decided to take additional austerity measures to lower its excessive fiscal deficit.
A top official at the People's Bank of China said that the central bank plans to stick to its moderately loose monetary policy stance while remaining vigilant against overly-fast inflation.
Chinese Premier Wen Jiabao today warned of latent risk in China’s banks and pledged to crack down on property speculation. "The domestic economy still faces some prominent problems," Wen, said in a speech in Beijing to the National People’s Congress. He also cited excess capacity in manufacturing and weak support for rural-income growth.
US stocks ended a volatile session higher on Thursday on the back of improved retail sales, a report showing drop in initial jobless claims from a three-month high and a few analyst upgrades.
The US government will release its February jobs report before the start of trading on Friday. The payrolls number is expected to show that employers cut 65,000 jobs in February, after cutting 20,000 in the previous month.
The unemployment rate, generated by a separate survey, is expected to have risen to 9.8% from 9.7% in the previous month.
The Dow Jones Industrial Average gained 47 points, or 0.5%, to end at 10,444.14. The S&P 500 index added 4 points or 0.4% to close at 1,122.97 and the Nasdaq Composite index gained 11 points or 0.5%, to finish at 2,292.31.
The major indexes rose in the morning, flattened out around midday and managed gains again in the afternoon. The strong dollar dragged on dollar-traded commodities as well as on shares of companies that do a lot of business overseas, and therefore benefit from a weaker dollar.
Wall Street ended little changed on Wednesday as investors remained cautious over the jobs outlook and the strength of the recovery.
The dollar gained versus the euro and the yen, pressuring dollar-traded commodities.
US light crude oil for April delivery fell 66 cents to settle at $80.21 a barrel on the New York Mercantile Exchange.
COMEX gold for May delivery lost $11.50 to settle at $1,132.40 per ounce.
Treasury prices rose, lowering the yield on the 10-year note to 3.60% from 3.61% late on Wednesday.
The number of Americans filing new claims for unemployment fell to 469,000 last week from a revised 498,000 the previous week. Economists thought claims would fall to 470,000.
Continuing claims, a measure of Americans who have been receiving benefits for a week or more, fell to 4.5 million from a revised 4.634 million in the previous week. Economists thought claims would only drop to 4.6 million.
On Wednesday, reports from payroll services firm ADP and outplacement firm Challenger, Gray & Christmas showed the pace of job cuts is slowing as the labor market begins to stabilize.
The January pending home sales index plunged 7.6% - far worse than expected - as brutal storms on the East Coast kept potential buyers on the sidelines.
The report from the National Association of Realtors was a surprise to economists, who were expecting sales to rise 1%, on average, after rising a revised 0.8% in December.
Despite massive snow storms, shoppers picked up the pace in February, boosting total retail sales by 4%, according to sales tracker Thomson Reuters.
It was the sixth month in a row that same-store sales rose and the best monthly gains since November 2007, a month before the official start of the recession. Same-store sales is a retail industry metric that refers to sales at stores that have been open for a year or more.
Among the standouts, clothing chain Abercrombie & Fitch reported that same-store sales rose 5% versus forecasts for a decline of 6.1%. Shares rallied 14%.
Factory orders climbed 1.7% in January, just shy of forecasts for a rise of 1.8%, the Commerce Department reported. Orders rose a revised 1.5% in the previous month.
Citigroup CEO Vikram Pandit thanked taxpayers for the $45 billion bailout received during the height of the financial crisis, but offered few details on why Citi needed a second bailout so quickly after the first one.
Pandit, speaking before a Congressional panel, said "irrational markets" and "short sellers" caused the company's stock to plunge and the bank to need an additional $20 billion within weeks of the original $25 billion. Citi shares gained less than 1%.
Separately, the government said on Thursday that it will make more than $1.5 billion from selling warrants it received as part of its 2008 bailout of Bank of America.
European shares ended a choppy session slightly higher after bouncing back from early lows, as two of the region's top central banks remained committed to ultra-low rates. The Stoxx Europe 600 index ended 0.2% higher at 253.00.
The UK's FTSE 100 index closed 0.1% lower at 5,527.16 and the German DAX index lost 0.4% to 5,795.32 with the French CAC-40 index ending down 0.4% at 3,828.41.
Indian markets ended in the red for the first time after the Union Budget as bulls took a breather after a three day rally.
Markets were choppy and indecisive throughout the day as traders and investors preferred to book some profits around the 5100 levels. After reclaiming the 17,000 levels in the previous trading session, the BSE Sensex was also unable to hold on to the crucial levels. Weak global cues and rising food inflation further dampened the sentiment
India’s Food Inflation rose to 17.87% in the week ended February 20, 2010 as compared to 17.58% in the previous week. Primary Articles inflation declined marginally to 15% in the week ended February 20, 2010 as against 15.84% in the previous week. Non-Food Articles inflation rose to 13.77% as against 12.78% in the previous week.
The BSE Sensex marginally slipped 44 points to end at 16,955 after touching a high of 17,025 and a low of 16,888. The Nifty edged lower by 8 points to end at 5,080.
Equity markets in Asia ended in the red. The Nikkei in Japan fell 1%, while Australia's S&P/ASX ended higher by 0.4%. The Shanghai SE Composite gained 2.3% and Hang Seng index in Hong Kong slipped 1.4%.
In Europe, stocks were trading in the red. The DAX in Germany was down 0.3% and the CAC 40 index in France was down 0.2%. The FTSE in the UK was down 0.2%.
Coming back to India, among the BSE sectoral indices, the IT index was the top loser, losing 1%, followed by the Teck index that was down 0.7% and the BSE Oil& Gas index was down 0.6%.
On the other hand, BSE Realty index gained 2.5%, BSE Consumer Durables index up 1.6% and BSE Metal index added 1.5%. Even the BSE Mid-Cap index gained 0.8% while the BSE Small-Cap index was up 0.8%.
Among the 30-components of Sensex, 15 stocks ended in the positive terrain and 15 ended in the red. Tata Steel, L&T, HIL, SBI and Reliance Infra were among the top gainers.
On the other hand, among the major losers were Infosys, Reliance Industries, ICICI Bank and TCS.
Outside the frontline indices, the big gainers in the broader market were Sintex Ind, Moser Baer, LIC Housing, Gujarat NRE and Bhushan Steel. On the other hand, losers included OBC, Mphasis, Bajaj Holdings and Pantaloon Retail.
Shares of Fame India advanced by 3% to end at Rs88 as Inox Leisure is reportedly planning to hike the open offer price for Fame India to attract minority shareholders and prevent a determined bid by Reliance MediaWorks.
However, Inox’s promoters may not have to decide on a revised open offer immediately, because the rival bids are being examined by SEBI, added reports.
The priority is to counter an attempt by Reliance MediaWorks to persuade SEBI to overturn the original transaction which started it all, the purchase by Inox of 43% in Fame from its promoters, the Shroff family.
Shares of Inox Leisure gained by 1% to end at Rs73.35. The scrip opened at Rs73 it touched an intra-day high of Rs75 and a low of Rs73 and recorded volumes of over 0.27mn shares on BSE.
Shares of Tata Power ended flat at Rs1333. ~0.9%, or 2.25mn shares, change hands in a single block on the BSE. The deal was at an average price of Rs1336 on BSE.
The scrip opened at Rs1335 it touched an intra-day high of Rs1345 and a low of Rs1311 and recorded volumes of over 2.3mn shares on BSE.
Strides Arcolab announced that it has entered into an understanding with Aspen to acquire the facility in Campos, Brazil with related products and IPs. This move comes as a part of Strides Arcolab’s strategy to focus on its Core Specialty injectable business. The consideration for the facility is approximately US$75mn. The acquisition would be completed subject to obtaining regulatory approvals as may be required.
Shares of Strides Arcolab edged higher by 0.5% to end at Rs324. The stock opened at Rs324 it touched an intra-day high of Rs329 and a low of Rs320 and recorded volumes of over 0.4mn shares on BSE.
Shares of Amtek Auto plunged by over 7% to end at Rs169 after ~3% of its equity shares changed hands in multiple transactions. The scrip opened at Rs184 it touched an intra-day high of Rs184 and a low of Rs165 and recorded volumes of over 15mn shares on NSE.
Government plans to offer up to 50% of NMDC Ltd.’s share sale to large investors and will determine the price band in which it will offer the company’s shares latest by March 9, 2010.
The stock edged higher by 0.4% to end at Rs435. The scrip opened at Rs436 it touched an intra-day high of Rs446 and a low of Rs432 and recorded volumes of over 0.4mn shares on BSE.
Fertilizer stocks witnessed renewed buying interest; the government decided to increase urea prices and allow companies to set rates of other nutrients.
Urea will cost 10% more, or Rs5,310 per ton, and prices of nutrients nitrogen, phosphorus, potash and sulfur will be linked to global levels starting April 1, 2010 Information and Broadcasting Minister Ambika Soni was quoted as saying.
Zuari Industries, Tata Chemicals, RCF, Chambal Fert and Nagarjuna Fert were among the major gainers.
Shares of Maytas Infra flared-up by over 19% to end at Rs189 after the company which was taken over by IL&FS has reportedly reached a repayment settlement with one of its lenders HDFC Bank.
Under the agreement, Maytas will now pay only 50% of the outstanding loan of Rs1bn as on January 2009, stated reports.
Sulzer Ltd., Switzerland (Parent Company), an 80% shareholder of the Sulzer India has Intended to acquire the remaining 20% equity shares of the company through an offer.
The company also has Intended to voluntarily delist the equity shares of the company from all the stock exchanges in India where the securities of the Company are listed i.e. Bombay Stock Exchange (BSE).
Shares of Sulzer India hit 20% upper circuit to end at Rs1036.40. The scrip opened at Rs865 it touched an intra-day high of Rs1036.40 and a low of Rs865 and has recorded volumes of over 15,000 shares on BSE.