All differences in this world are of degree, and not of kind, because oneness is the secret of everything. - Swami Vivekananda.
Nearly five years after the big Reliance empire was split, the warring Ambani brothers have decided to bury the hatchet. The new peace deal in the Ambani family will surely prove to be a sentiment-booster for our market, which was starved of positive triggers. It’s a no-brainer that shares of the two Reliance groups will steal the limelight, although one is still not sure of the long-term impact of the truce. What’s more, Asian markets, barring Japan, are mostly positive. The good news is that the rally is being led by China, which has been the worst-performing market this year. A meeting of the China-US Strategic and Economic Dialogue takes place in Beijing until May 25. The strength of the Chinese currency is a likely topic.
Given the feel-good backdrop, we expect a firm opening and perhaps a positive finish too. If global cues remain supportive and there are no fresh mishaps, the markets will be able to regain some of the lost ground. Some risks may still persist mainly due to concerns about the European sovereign debt problems and possible overheating in China. In the immediate future, the key events to watch out for will be next week’s GDP report and progress of monsoon. A spate of global data points will also have to be factored in. The market may remain choppy owing to the F&O expiry on Thursday and continuing uncertainty over the euro-zone debt crisis.
Results Today: Aegis Logistics, Astec Life Sciences, Bombay Dyeing, Canara Bank, Future Capital, GMR Infra, Hotel Leela, LMW, Madras Cements, Opto Circuits, Sun Pharma, Tata Chemicals, Tata Power and TV Today.
FIIs were net sellers of Rs15.4bn in the cash segment on Friday on a provisional basis, according to the NSE data. The local institutions were net buyers at Rs8.16bn on the same day. In the F&O segment, the foreign funds were net buyers of Rs1.05bn. On Thursday, FIIs were net sellers of Rs7.1bn in the cash segment. according to the SEBI data.
US stocks ended higher on Friday after a fairly volatile session, as investors used the recent sell-off to claw their way back into the market. However, the overall undertone is still a bit cautious owing to fears that the fiscal problems in the euro-zone could have wider repercussions for the global economy.
The Dow Jones industrial average rose 125 points or 1.3%, to 10,193 after having fallen as much as 150 points earlier in the session.
Gains were broad based, with 28 of 30 Dow components ending higher.
The S&P 500 index gained 16 points or 1.5% to 1,088 and the Nasdaq composite was up 25 points or 1.1% at 2,229 after having been on both sides of breakeven throughout the session.
A flurry of buying in the last half-hour of trading session was partly responsible for the positive close. And, despite Friday's gains, the Dow nevertheless snapped a two-week winning streak, off 4% for this week.
The Dow is now down 9% from its 2010 high, just out of territory signaling a correction to the bull market dating back to March 2009.
Though fears about Europe's credit crisis eased a little most traders and analysts are likely to keep a close eye on the region in the weeks ahead. Things may remain volatile as the debt-strapped euro-zone works its way out of the trouble.
The CBOE Volatility index (VIX), Wall Street's fear gauge, fell 12% to 39.88. The VIX had fallen more substantially in the early afternoon. On Thursday, the VIX spiked to a 14-month high of 45.48.
The euro gained 0.7% versus the dollar, rising for the third day in a row. The euro has seesawed over the last few days after plunging to a four-year low of US$1.2234 on Monday.
The dollar rose 0.4% versus the yen. The US Dollar Index slipped 0.2%.
Both the lower and upper houses of Germany's parliament approved the country's contribution to the €750bn (US$938.33bn) aid package from the European Union and International Monetary Fund bailout.
Commodities recovered some of the lost ground. Copper edged upwards, helping to push the broad Dow Jones-UBS Commodity Index up 0.3%.
US light crude oil for July delivery fell 76 cents to settle at US$70.04 a barrel on the New York Mercantile Exchange.
COMEX gold for June delivery fell US$12.50 to settle at US$1,176.10 an ounce.
Treasury prices rose, lowering the yield on the 10-year note to 3.20% from 3.26% late on Thursday.
The market is more than 10% off 2010 highs. A decline of more than 10% on a closing basis is technically considered to be a correction.
Since peaking at roughly 18-month highs in late April, the Dow had lost 10.2% and the S&P 500 had lost 12%. The Nasdaq was at a 22-month high at its peak and is down 12.9% as of Thursday's close.
The S&P 500 needs to close above the 200-day moving average within the next few sessions - otherwise that level, around 1102, or 3% above Thursday's close, is going to become hard for the market to surpass.
Big banking stocks sustained gains through the afternoon. A broad financial sector rally propelled the KBW Bank (BKX) sector index by 4% following the Senate's approval of the biggest overhaul of the financial system since the 1930s.
On Thursday night, the Senate passed a far-reaching Wall Street reform bill that is part of legislation that aims to prevent another financial crisis.
The nearly 1,600-page bill establishes a new consumer regulatory agency, sheds light on complex financial products and provides a new way for the government to deal with so-called too big to fail financial firms.
The bill has to be reconciled with a similar measure the House of Representatives passed in December before it can be sent to President Obama to sign.
Google got the regulatory approval for its US$750mn purchase of mobile advertising firm AdMob, following a six-month antitrust investigation. The Federal Trade Commission approved the deal since rival Apple recently purchased a mobile advertising service, Quattro Wireless.
Dell reported higher quarterly earnings and revenue that topped expectations, after the close of trading on Thursday. Strong business spending fueled the sales gain. However, the company's gross margins, a key measure of profitability, were lower than what many analysts were expecting. Dell shares fell 6.8%.
In economic data, More than half of all the US states saw lower unemployment rates last month, according to state-by-state figures released Friday morning.
European shares closed in the red on Friday but were well off the session lows, even as investors continued to be jittery about the fiscal situation in the debt-plagued euro-zone region.
The Stoxx Europe 600 index, which fell nearly 3% early in the session, finished down just 0.5% to 237.04. Friday's decline brought weekly losses for the for the pan-European stock market index to 4.6%.
The German DAX index fell 0.7% to 5,829.25, the French CAC-40 index dropped 0.1% to 3,430.74 and the UK FTSE 100 index declined 0.2% to 5,062.93.
Asian shares ended mixed, while US stocks closed with solid gains after oscillating between gains and losses in morning trading.
The German parliament approved the country's contribution to the joint EU-IMF support package for euro-zone countries struggling with high fiscal deficit levels. earlier in the week, Germany sent shockwaves across the globe when its regulator banned naked short-selling of certain financial instruments.
Drug stocks declined. GlaxoSmithKline shares lost 2.3% and Sanofi-Aventis shares fell 1.4%.
Royal Dutch Shell shares fell 1.1%. British oil giant BP, which is continuing to battle to clear up an oil spill in the Gulf of Mexico, was down 4.2%.
Rio Tinto shares gained 3.5% and Xstrata shares rose 6.4%.
British Airways saw it shares add 1%. It lost ground in the previous session when a court lifted an injunction that prevented cabin crew from striking.
British Airways said on Friday that its fiscal-year net loss widened to 425 million pounds (US$613.2 million), from £358 million a year ago. The latest quarter's operating loss includes seven days of strike action with a net cost of £43 million.
BA said that market conditions are showing improvement from depressed levels in 2009/10 and it's targeting revenue growth of 6% and breakeven at the profit before tax level for fiscal 2011.
Telecom stocks were in focus after the German spectrum auction ended late on Thursday. The auction raised €4.38 billion in total, according to reports. Analysts had been expecting proceeds of between €2 billion to €8 billion.
Vodafone shares rose 0.4% and Telefonica shares climbed 1%.
Dutch telecom firm KPN's shares rose 2.3%. It acquired 19% of the auctioned amount of frequency for €284 million and said that it will accelerate its share buyback program.
In the currency market, the euro rose versus the dollar, pushing the shared currency to its first weekly gain in five mostly due to short-covering. The euro touched a four-year low, under the US$1.22 mark, earlier this week.
The euro rose to US$1.2581, up from US$1.2550 late on Thursday. gve4Earlier, it rose as high as US$1.2672.
Against the Japanese yen, the euro traded at ¥113.05, from ¥112.99 on Thursday, a day during which the single currency dropped as low as ¥109.50 - its weakest since 2001.
The dollar index, which tracks the US currency against a basket of six major currencies, fell to 85.397, down from 85.637 late on Thursday.
The dollar traded at ¥89.87, compared to ¥90.01 late on Thursday, when it fell to a two-week low of ¥88.95.
The British pound bought US$1.4472, from US$1.4417 late on Thursday.