"Stability itself is nothing else than a more sluggish motion." - Michel de Montaigne.
Some semblance of stability has returned to the global markets though Europe continues to be rattled by concerns that the debt problems of PIIGS group could linger on for a while and might spread to other parts of the region. Meanwhile, ratings agency S&P downgraded Spain's credit rating and said the outlook is negative. Incidentally, the Greek market was one of the few indices to rise in Europe after its regulator banned short selling for two months.
In the US, the Fed left key rates steady and didn’t make any change in its language. The Fed said that the US economy continues to strengthen and the labor market is beginning to improve. The Fed’s rate action and commentary helped Wall Street post a modest advance. Asian markets are mixed but relatively stable. Japanese market is shut today.
We expect a steady start on Indian bourses. After a sharp fall there is always a chance of a rebound. But the F&O expiry and uncertainty over the emerging financial situation in Europe may continue to haunt the bulls. Aggressive buying should be avoided till the near-term turbulence is over. The market will be volatile and we advise you to focus on stock centric action after doing proper due diligence.
Results Today: Andhra Bank, Ashok Leyland, BASF India, Bata India, Biocon, Cadila, Ceat, CESC, HCL Infosystems, Hexaware, Indiabulls Real Estate, ING Vysya Bank, IOB, KEC International, Mahindra Holidays, MRF, OBC, Parsvnath Developers, Shriram Transport, Siemens, Thomas Cook, UltraTech, UB Holding and United Phosphorus.
FIIs were net sellers of Rs1.31bn on Wednesday on a provisional basis. Local funds were net buyers of Rs3.24bn, according to figures published on the NSE's web site. In the F&O segment, the foreign funds were net sellers of Rs9.94bn. On Tuesday, FIIs were net buyers of Rs1.6bn in the cash segment, as per the SEBI web site.
US stocks managed to end marginally higher on Wednesday, with the Dow Jones Industrial Average reclaiming the 11,000 mark after the Federal Reserve said that economic activity is picking up, and that it will hold a key short-term interest rate steady for an extended period of time. The broader market was mixed as investors considered European debt problems and a string of quarterly earnings reports.
The Dow gained 53 points, or 0.5%, to end at 11,045.27. The 11,000 level has psychological meaning, but is not a key technical level for traders.
The S&P 500 index added 7 points, or 0.7%, closing above 1,185, a key support level. The Nasdaq Composite was barely changed at 2,471.73.
The dollar gained versus the euro and the yen. The euro turned lower after the Spain rating cut.
US light crude oil for June delivery rose 78 cents to settle at $83.22 a barrel on the New York Mercantile Exchange.
COMEX gold for June delivery rose $9.60 to settle at $1,171.80 per ounce.
Treasury prices fell, raising the yield on the 10-year note to 3.77% from 3.69% on Tuesday. Prices had rallied on Tuesday as stocks slumped, with investors seeking safety in government debt.
For every stock on the decline more than two were on the rise on the New York Stock Exchange, where nearly 1.4 billion shares traded hands.
Financial stocks led the S&P 500 higher, getting a lift from some earnings reports, a stalled debate on a bank-reform bill.
US stocks had surged more aggressively in the first 90 minutes after the Fed announcement but gave up bigger gains late in the session.
Stocks had struggled earlier as earnings news competed against euro zone debt worries after Standard & Poor's cut Spain's rating, one day after lowering Portugal's debt rating and cutting Greece's rating to junk. The downgrades pummeled US stocks on Tuesday and also dragged on international markets on Wednesday.
The Fed policymakers offered a positive take on the US economy and promised no change in interest rates for the foreseeable future. The central bank held the fed funds rate steady at historic lows near zero, as expected, and also said that conditions are likely to warrant exceptionally low levels of the federal funds rate for an extended period.
Once again, Federal Reserve Governor Thomas M. Hoenig dissented, objecting to the "extended period" phrase on worries about inflationary concerns. The bankers also talked up the economy, saying activity has strengthened, the labor market is starting to improve and household spending has picked up a bit, but not enough to drive inflation.
Greece is facing a May 19 deadline for refinancing about $11.4 billion in debt and investors are worried it could default. Although Greece has gotten the approval to access over $53 billion in loans from the European Union and the International Monetary Fund, the funds have not yet been made available.
Some of the worries surrounding Greece partly subsided on reports that the loan package could be increased to as much as $160 billion. Additionally, Germany - the largest of the 16 euro zone countries - said its portion of the initial loan package could be approved by the end of next week.
The cost of insuring Greek debt dropped from record highs hit on Wednesday morning, and the euro bounced back versus the dollar after falling to a one-year low.
Dow Chemical reported higher quarterly sales and earnings that topped estimates, as higher pricing boosted global sales. Shares gained almost 6%.
Defense contractors General Dynamics and Northrop Grumman both reported higher quarterly earnings that topped estimates.
AOL reported quarterly earnings and revenues that fell from a year ago and missed expectations, as the company contended with dwindling sales and a weakening subscriber base. Shares fell 14.5%.
After the close, Hewlett-Packard said it was buying smartphone maker Palm in a $1.2 billion all-cash deal that values Palm at $5.70 per share. The deal puts an end to months of takeover rumors regarding the struggling company, a leader in the handheld device market that has struggled amid the rise of smartphones.
European shares extended declines at the end of a tumultuous session after S&P downgraded sovereign credit rating of Spain. After Tuesday's 3.1% slide, the Stoxx Europe 600 index dropped 1.3% to 258.24. S&P downgraded Spain's credit rating to AA from AA+ with a negative outlook. S&P had cut Greece's rating to below investment grade and also had sliced Portugal's rating on Tuesday.
A German lawmaker said that Greece may receive up to 120 billion euros of aid over three years. The IMF and the EU have said they will lend 45 billion euros to Greece, though that assistance has yet to materialize. Some say the aid will arrive in time for Greece to pay off 8.5 billion euros due May 19. The Greek ASE Composite index rose 0.6% to 1,707.35 as the Greek securities regulation banned short selling.
The IBEX 35 however dropped 3% to 10,167.00 in Madrid. The French CAC-40 index declined 1.5% to 3,787.00, the German DAX index lost 1.2% to 6,084.34 and the UK's FTSE 100 index fell 0.3% to 5,586.61.After escaping the global rout on Tuesday, it was time for Indian markets to join the worldwide meltdown as ratings downgrade of Greece and Portugal spark fears of a wider financial crisis in the Eurozone.
"The turmoil in the international markets continued unabated amid growing concerns of sovereign debt problems in parts of Europe. In addition, the earnings season has been a mixed one, with many blue chips such as RIL, ICICI Bank, Maruti and Bharti Airtel missing the consensus estimates which further accelerated sell-off on the Indian bourses", says Amar Ambani, Vice President Research IIFL.
The BSE Sensex lost 311 points to end at 17,380 and NSE Nifty slipped 93 points to close at 5,215. Among the 30 components of Sensex, 25 ended in the negative terrain and only SBI, Sun Pharma, HUL and ACC managed to end in the green.
Markets across the US, Europe and Asia witnessed sharp losses after Standard & Poor's cut Greece's debt rating to junk and downgraded Portugal's rating by two notches. Markets in Asia ended in the red; the Nikkei in Japan ended lower by 2.5%, Australia's S&P/ASX was down 1.1%, the Hang Seng index in Hong Kong was down 1.5% and Shanghai SE Composite ended lower by 0.3%.
On the other hand, European indices were trading with negative bias, the DAX in Germany was down 1.5%, the CAC 40 index in France was down 1.5% and the FTSE in the UK was down 0.5%.
All the BSE sectoral indices ended in the red, the BSE Realty index was top loser, the index lost 3.5%, followed by BSE Oil & Gas index down 2.8% and Metal index down 2.2%. Even the Mid-Cap and the Small-cap index lost 1.6% and 2% respectively.
Outside the frontline indices, the big losers in the broader market were GMR Infra, Concor, Bajaj Holding, RCF and Indian Hotels. On the other hand, gainers included RNRL, Cummins, BOB and Piramal Healthcare.
Gujarat NRE Coke announced that the board of directors of the Company will meet on April 29, 2010, to consider allotment of 11% Secured Redeemable Non Convertible Debentures not exceeding Rs2.5bn along with warrants not exceeding Rs2.5bn on Qualified Institutional Placement (QIP) basis.
The stock pared all its gained and ended lower by 1.3%. The scrip opened at Rs88.7 it touched an intra-day high of Rs88.8 and a low of Rs86.5 and recorded volumes of over 0.92mn shares on BSE.
Shares of Tech Mahindra declined by 4.4% to end at Rs770 after AT&T sold ~8.6mn shares, or 7% of its equity to Life Insurance Corp in two block deals on NSE. In late March this year, AT&T had picked up an 8.07% stake in Tech Mahindra from the Indian promoters in return for a certain amount of business over a period.
It had bought about 9.87mn shares in an off-market transaction at about Rs162 per share. An agreement signed between the two companies in May 2005 gave AT&T the option to purchase shares in Tech Mahindra if it met certain revenue targets.
REpower Systems AG – in which Suzlon Energy is a majority shareholder with over 90 per cent holding – together with Deutsche Offshore-Testfeld und Infrastruktur-GmbH (DOTI) and additional project partners, inaugurated the first German offshore wind farm project - alpha ventus, on April 27, in the presence of the Federal Minister for the Environment Dr. Norbert Röttgen.
The stock ended lower by 2.2%. The scrip opened at Rs69.9 it touched an intra-day high of Rs69.95 and a low of Rs68.5 and recorded volumes of over 3.6mn shares on BSE.
Dabur India gained 1.2% to end at Rs180 after the company posted a net profit of Rs1.35bn for the quarter ended March 31, 2010 as compared to Rs1.04bn for the quarter ended March 31, 2009. Total Income increased from Rs7.40bn for the quarter ended March 31, 2009 to Rs8.63bn for the quarter ended March 31, 2010.
Suven Life Sciences advanced by 1.2% to Rs31.45 after the company announced that the New Zealand Patent Office issued a Patent 548743 and the India n Patent Office has issued a patent 238017 to their New Chemical Entities (NCSs) for the treatment of disorders associated with Newrodegenerative diseases and these Patents are valid until 2024 and 2025 respectively.
Balrampur Chini Mills ended lower by 1.5% to Rs82.25. The company posted a net profit of Rs275.5mn for the quarter ended March 31, 2010 as compared to Rs661.9mn for the quarter ended March 31, 2009. Total Income increased from Rs3.57bn for the quarter ended March 31, 2009 to Rs4.71bn for the quarter ended March 31, 2010.