"Victory is sweetest when you've known defeat."
It was exactly the case for the Chennai Super Kings as they edged out the favourites - the Mumbai Indians in the IPL final. As far as the market is concerned, the gains made over the past one year or so have been spectacular post the global meltdown. Today promises to be yet another sweet start for the market on the back of good global tidings. The key to watch is whether the Nifty closes above 5350.
Equities worldwide have gained after Greece decided to tap into the EU-IMF loan. The initial monsoon forecast is encouraging. Earnings from a couple of big private banks have been pretty robust. On the flip side, Reliance’s results were slightly disappointing. Crude oil is above $85. The political temperature is rising and calls for tighter bank regulations have got shriller in the US.
As the MI’s loss to CSK shows, nobody is invincible. So, one has to guard against complacency. No need to take undue risk. Wait for a decisive move in key indices. We expect the market to remain sideways and rangebound ahead of the Fed meet and F&O expiry.
Results Today: Allied Digital, AstraZeneca Pharma, Bosch, Geometric, Godrej Consumer, Indiabulls Financials, Indoco Remedies, Kiri Dyes, Kirloskar Brothers, Maruti Suzuki, Religare, Sterlite Industries, Tata Metaliks and Uco Bank.
FIIs were net buyers of Rs3.39bn on Friday on a provisional basis. Local funds were net buyers of Rs290.9mn, according to figures published on the NSE's web site. In the F&O segment, the foreign funds were net buyers of Rs3.58bn. On Thursday, FIIs were net buyers of Rs17.48bn in the cash segment, as per the SEBI web site. Mutual funds were net buyers at Rs2.47bn in the cash segment on the same day.
US stocks closed higher on Friday, with the Dow, Nasdaq and S&P 500 all ending at fresh 2010 highs, buoyed by a stronger than anticipated new-home sales data, a spike in commodities and improved earnings from American Express.
The Dow Jones Industrial Average extended it's longest weekly winning streak in six years. A surprisingly weak durable-goods orders report had earlier raised worries about the state of the world's largest economy.
The dollar was volatile amid news that Greece had finally decided to accept the emergency financial aid jointly extended by European Union (EU) and the IMF.
A variety of homebuilder stocks jumped. Energy stocks too advanced as crude oil prices crossed USUS$85 a barrel and Schlumberger gave a promising outlook.
The Dow rose 70 points, or 0.6%, to end at 11,204.28, the highest close since Sept. 19, 2008. The S&P 500 index advanced 8 points, or 0.7%, to close at 1217.28, also the highest point since Sept. 19, 2008.
The Nasdaq gained 11 points, or 0.4%, to finish at 2530.15, the highest point since June 5, 2008.
The dollar fell versus the euro, giving up morning gains. The greenback advanced versus the yen.
US light crude oil for June delivery rose US$1.42 to US$85.12 a barrel on the New York Mercantile Exchange. Long-dated contracts suggested even stronger prices later in the year, including a move above US$90 by December.
COMEX gold for June delivery rose US$10.80 to settle at US$1,153.70 per ounce. Copper and silver also advanced.
Treasury prices fell, raising the yield on the 10-year note to 3.82% from 3.77% late on Thursday.
The Dow has now risen for eight weeks straight, its longest positive streak since January 2004. The Nasdaq has also risen for eight consecutive weeks. The S&P 500 ended lower last week and has risen for seven of the last eight weeks.
Stocks were choppy early in the morning as investors considered a variety of economic, corporate and geopolitical news. But the undertone turned positive by the close, with the Dow and S&P 500 ending at fresh 18-month highs and the Nasdaq closing at a new 22-month high.
Greece's prime minister chose to access up to US$53bn in aid from the EU and IMF. Greece's bond yields had hit record highs before the debt-plagued nation activated the loans made available to it earlier this month. The EU pledged to provide as much as US$40bn at a 5% interest rate, well below market rate. The IMF said it would lend Greece US$13bn.
Investors grew more optimistic about the US economy following a Commerce Department report showing that sales of new homes posted their largest year-over-year increase in nearly five years. Stocks erased early losses after the Commerce Department report.
In the housing report, new home sales rose to a 411,000-unit annual rate in March from a 324,000-unit annual rate in February, a 27% increase that was the fastest rate of gain in 47 years. Economists had expected sales of 330,000.
Orders for durable goods fell 1.3% in March, the Commerce Department reported. Orders rose 1.1% in February and were expected to rise 0.1% in March, according to a consensus of economists.
American Express reported higher quarterly earnings late on Thursday that topped estimates. The Dow component also said its customers spent more in the first quarter than a year earlier and that it set aside less money for loan losses. Shares gained 2% on Friday.
Fellow credit card distributor Capitol One Financial also posted earnings that improved from a year earlier and topped estimates, and also set aside less for loan losses than in previous quarters. However, the company said customer loan demand is still weak. Shares gained 2.5%.
Microsoft posted a higher quarterly profit that surpassed forecasts late Thursday. The results were due to a continued strong response to it Windows 7 operating system, introduced six months ago, as well as its Bing search engine. Shares fell 2% on Friday.
Also after the close on Thursday, Amazon.com reported earnings that jumped 68% from a year ago, surpassing forecasts, on higher sales that also beat expectations. Amazon shares fell 4.5%.
Merck rallied 5% and was one of the Dow's biggest gainers after it forecast charges related to healthcare reform that are lower than its rivals. Merck expects to take around US$170mn in charges this year and between US$300mn and US$350mn in charges next year.
Schlumberger shares were up 6.6% after it announced a 28% decline in first-quarter earnings but forecast a full-year turnaround. Smith International, which is due to be acquired by Schlumberger in a deal pending regulatory approval, was up 7.1%.
Sears Holdings Corp. gained 8.1%. The biggest US department-store company agreed to buy William Ackman’s hedge fund’s stake in Sears Canada Inc., in a move that would allow it to take the company private.
European stocks rose on Friday after Greece formally requested for access to EU-IMF loan package and business confidence in Germany improved. Investors also welcomed better-than-expected earnings from the likes of Adidas, Volvo, Ericsson and Akzo Nobel.
The Stoxx Europe 600 Index rose 0.8% to 267.42. The benchmark gauge for European shares has declined 0.2% this week, its second straight weekly loss. The Stoxx 600 has climbed 5.3% in 2010.
Greece formally asked to tap a €45bn (US$59.9bn) European Union-International Monetary Fund aid package on Friday. Greece's call for activation of the EU-IMF financial lifeline is a litmus test for the euro's strength and the economic bloc's unity.
The situation for Greek government bonds improved a bit after the news. But the Greek ASE Composite Index slipped 0.2% to 1,857.96.
Germany's DAX index climbed 1.5% to 6,259.53, the UK's FTSE 100 index rose 1% to 5,723.65 and the French CAC-40 index gained 0.7% to 3,951.30.
Friday's advance erased some of Thursday's 1.1% loss after Eurostat projected a significantly higher budget deficit for Greece in 2009 than the debt-heavy government had predicted. Also, Greece rating was subsequently downgraded by Moody's.
The euro, which tumbled on Thursday, managed to regain a bit of ground against the US dollar.
German business confidence rose to a two-year high in April as the global economic recovery boosted exports and industrial activity got a fillip from warmer weather. The Ifo institute in Munich said its business climate index, based on a survey of 7,000 executives, increased to 101.6 from 98.2 in March. Economists expected a gain to 98.7.
A separately report showed that the UK economy grew half as much as forecast in the first quarter of 2010. GDP expanded by 0.2% from the final three months of 2009, the Office for National Statistics said. Economists had predicted a 0.4% gain.
The Indian markets outperformed international peers in a result heavy week as the RBI chose a more measured approach to monetary tightening than had been feared. Though the market did witness some volatility owing mainly to global jitters, overall mood was upbeat due to strong earnings momentum. Finally, the BSE Sensex gained 0.6% and the NSE Nifty added 0.8% to shut shop at 17,694 and 5,304 respectively. While, the broader indices did better than the benchmark indices, small-cap and the mid-cap index gained over 1.5% each.
Barring the Metals and the IT index all the other BSE sectoral indices ended in positive terrain. Big gainers were the BSE BSE Banking index rose over 5% followed by the BSE Auto index up 2.5%.
The FII continued to be net buyers in the Indian markets; they bought stocks to the tune of Rs5.28bn last five and even the DIIs turned net buyers to the tune of Rs5.30bn.
The BSE Sensex hit an intra-week high of 17,778 and low of 17,276 while NSE Nifty hit an intra-week high of 5,332 and low of 5,160.