The best armor is to keep out of range - Italian Proverb.
Wild swings are here to stay though the outlook for the day appears slightly brighter. Risk aversion is still high with investors across the globe flocking to the safety of gold and the dollar. At the same time, stocks and commodities are showing some signs of staging a comeback. British shares rose as David Cameron took charge of the first coalition government in London since World War II. Spain’s announcement of a new austerity plan also helped boost confidence in equities.
Stocks in Europe as well as in the US posted smart gains. Asian markets are up this morning, led by Japan and South Korea though Shanghai continues to struggle amid tightening concerns. We expect a higher opening on Indian bourses. The NSE Nifty may take a shot at 5200 but will find it tough to get past 5300. Fund flows from overseas investors have tapered off lately and valuations remain quite rich. We are going through a volatile consolidation phase. It’s better to stay at a safe range and invest lesser than your means.
Results Today: Crompton Greaves, Educomp, Gammon India, Graphite India, Kewal Kiran, Koutons Retail, Lok Housing, MTNL, Plethico Pharma and Tata Coffee.
FIIs were net sellers of Rs2.97bn in the cash segment on Wednesday on a provisional basis, according to NSE web site. Local institutions were net buyers of Rs1.8bn. In the F&O segment, the foreign funds were net buyers of Rs12.89bn. FIIs were net buyers of Rs1.43bn in the cash segment on Tuesday, as per the SEBI data. Mutual Funds were net sellers of Rs1.97bn in the cash segment on the same day.
US stocks rose on Wednesday, with the Dow logging triple-digit gains, as concerns about European debt eased and investors focused on an improving domestic economy and corporate earnings. An optimistic outlook from IT major IBM too helped give a fillip to the sentiment.
After finishing nearly 37 points lower on Tuesday, the Dow Jones Industrial Average closed up 148.65 points, or 1.4%, to 10,896.91.
Of the Dow's 30 components, all but three rose, with gainers led by IBM. The IT services company's shares rallied 4.6% after the chief executive said that it would double its earnings by 2015.
Industrial conglomerate 3M Co. gained 1.7% after it declared a cash dividend late Tuesday for a 375th consecutive quarter.
The S&P 500 Index advanced 15.88 points, or 1.4%, to 1,171.67, with technology and industrial companies leading an advance that included all of the index's 10 industry groups.
Among the notable gainers, shares of Fluor Corp. rose 5.8% after the largest publicly traded US engineering firm said new business in the second quarter could top $8.8 billion.
The Nasdaq Composite Index gained 49.71 points, or 2.1%, to 2,425.02.
For every stock falling roughly six were on the rise on the New York Stock Exchange, where about 1.3 billion shares traded. Composite volume cleared 5.4 billion.
The dollar erased earlier losses and turned higher against the euro in the afternoon, rising 0.2%. The greenback also gained 0.9% against the British pound and was up 0.6% against the Japanese yen.
Gold prices continued to soar, rising $23.20 an ounce, or 1.9%, to settle at a record $1,243.50.
Uncertainty over the euro, which is used by 16 countries, is among the factors propelling gold prices to a fresh high, with investors turning to the metal as an alternative vehicle to paper currencies.
Europe's common currency traded near a 14-month low against the dollar, with the euro, slipping to $1.2617 from $1.2697 in late North American trades on Tuesday.
US light crude oil slipped 72 cents, or 1%, to settle at $75.65 a barrel after a larger-than-expected build in crude supplies.
Treasury prices extended gains, with the benchmark 10-year yield up to 3.63%, after a $24 billion auction of 10-year notes.
Cisco Systems, which reported its best quarter even after the close, finished up more than 3%.
US stocks had finished lower on Tuesday in a volatile session as investors digested a $1 trillion European aid package, but remained cautious amid lingering fears that the Greek debt crisis could spread to other nations if they don't manage to reduce large budget deficits.
Stocks rose sharply on Monday after the announcement of the massive rescue package for the debt-laden euro-zone economies.
Spain's Prime Minister Jose Luis Rodiguez Zapatero announced that civil servant salaries will be cut by 5% beginning in June in an effort to reduce costs. But fiscal problems in Europe will continue to resurface as long as deficits remain high.
The CBOE Volatility index (VIX), Wall Street's fear gauge, dipped 9%. Last week, the measure had shot up to 13-month highs as investors remained nervous about the sovereign debt crisis.
The Commerce Department said the trade deficit increased 2.5% in March, widening to $40.4 billion from a downwardly revised $39.4 billion the previous month. That was lower than the $40.5 billion that analysts.
The Treasury reported the 19th consecutive monthly deficit, with a shortfall of $82.7 billion in its April budget. That is much larger than the $52 billion gap economists were expecting during month, and it also topped March's $65.4 billion deficit. Historically, the government's budget posts a surplus during the month thanks to the April 15 tax filing deadline.
US federal prosecutors are looking into whether Morgan Stanley misled investors about complex mortgage derivatives it designed, according to the Wall Street Journal. The company, however, denies any knowledge of the investigation. Shares of the bank fell more than 2%.
After the closing bell, Cisco posted a fiscal third-quarter profit that surged 63% to $2.2 billion from a year earlier. Adjusted for one-time charges, the network equipment maker earned 42 cents per share, beating analyst estimates of 39 cents per share. Sales climbed 27% to $10.4 billion and also topped analysts' expectations. Shares of the company fell 1% in after-hours trading.
Disney reported profit and revenue that beat analysts' expectations late on Tuesday. Thanks to the success of "Alice in Wonderland," the media giant's profit surged 55% to $953 million, or 48 cents per share, and sales climbed 6% to $8.58 billion. Stock in Disney ended 1.8% lower.
Strength in the financial space lifted stocks in Europe on Wednesday, while shares in London got a boost after the formation of a coalition government by the Conservative Party and Liberal Democrats.
The Stoxx Europe 600 index gained 1.5% to 256.83. It was its second advance in three sessions since the EU-IMF approved a 750-billion euro rescue plan late on Sunday.
Government data showed first-quarter GDP growth of 0.2% in the euro-zone, but the figure beat economists' forecasts for growth of 0.1% and also covered a period of bad weather. Portugal's GDP was up 1% quarter-on-quarter. The Portuguese PSI 20 index climbed 2.9% to 7,380.66.
Spain announced budget cuts and the Spanish Ibex 35 index rose 1% to 10,107.7. The Greek ASE Composite Index rose 0.8% to 1,749.59.
The German DAX index rose 2.4% to 6,183.49, with Daimler shares up 2.9% and Infineon Technologies rising 4.6%. The French CAC-40 index advanced 1.1% to 3,733.87.
The UK FTSE 100 index rose 0.9% to 5,383.45 as a new UK government began to take shape.
The British pound declined 0.5% to $1.4855.