Monday, July 08, 2013
Better thane expected manufacturing data keep losses under check
US stocks ended with moderate losses at Wall Street on Tuesday, 02 July 2013. Equities saw little change at the start of today's session after index futures surrendered their pre-market gains just ahead of the opening bell. The decline in futures coincided with euro weakness after reports indicated the International Monetary Fund and Eurozone officials gave Greece three days to prove its reforms are on course.
For the day, the Dow Jones Industrial Average closed down 42.55 points, or 0.3%, at 14,932.41. The S&P 500 slipped 0.88 point to close at 1,614.08. The Nasdaq Composite fell 1.09 points to finish at 3,433.40.
Among the ten economic sectors, industrials and materials lagged the most. General Electric and Boeing were the day's worst performers among the Dow components.
Contributing to the euro weakness was the situation in Portugal where the country's foreign minister resigned after the finance minister, who constructed the country's EU/IMF bailout, submitted his resignation yesterday. The uncertainty pushed the Portuguese 10-yr yield higher by nine basis points to 6.42%.
In early afternoon the market place was closely watching the latest developments coming from Egypt. Reports said the Egyptian army has called on the Egyptian president to step down, as protesters fill the streets of Cairo.
The U.S. dollar index, which weighs the strength of the dollar against a basket of six other currencies, rose by 0.2% on Tuesday.
The OECD reported Tuesday that inflation in the industrialized countries rose slightly in May but remains well under control. The annual inflation rate in May was 1.5% versus 1.3% in April. A report from the European Union on Tuesday corroborated the OECD data, as Euro zone manufacturing goods prices fell for the third straight month in May, at down 0.3%.
Among latest economic data expected at Wall Street, today's economic data was limited to manufacturing orders, which increased 2.1% in May, up from an upwardly revised 1.3% (from 1.0%) in April. The consensus expected factory orders to increase 2.0%.
Crude-oil prices ended substantially higher on Tuesday, 02 July 2013 at Nymex. Prices rose as turmoil in Egypt and Syria, a climb in U.S. factory orders and expectations for a weekly decline in crude supplies helped to lift prices above $99 a barrel. Light and sweet crude for August ended higher by $1.61 (1.6%) at $99.6 a barrel on the New York Mercantile Exchange on Tuesday.
Bullion metal prices ended lower on Tuesday, 02 July 2013 at Comex. Comex gold prices gave way to selling pressure brought on by the U.S. dollar index pushing to a four-week high. Prices had lost more ground after the U.S. Commerce Department reported that factory orders climbed more than expected in May. Gold for August delivery ended lower by $12.3 (1%) at $1,243.1 an ounce on the Comex division of the New York Mercantile Exchange on Tuesday. September silver ended lower by $0.27 (1.4%) at $19.31 an ounce on Tuesday.
Declining stocks outpaced advancers 3 to 2 on the New York Stock Exchange and by a narrow margin on the Nasdaq. Composite NYSE volume topped 3.2 billion shares and Nasdaq composite volume was just over 1.6 billion shares at the close.
Indian ADRs ended mostly lower on Tuesday. In the IT space, Infosys was down 1.3% and Wipro was down 0.3%. In the Banking space, HDFC Bank was up 0.2% and ICICI Bank was down 1.8%. In other space, Tata Motors was down 2.7%, and Sterlite was up 0.2%.
Tomorrow, a full slate of economic reports is scheduled for tomorrow, beginning with the 7:00 ET release of the weekly MBA Mortgage Index. June Challenger Job Cuts and ADP Employment Change will be reported at their respective 7:30 ET and 8:15 ET while weekly initial claims will cross the wires at 8:30 ET. Finally, the May trade balance will be reported at 8:30 ET while June ISM Services Index will be announced at 10:00 ET.
The market may edge lower in early trade on weak Asian stocks. Trading of CNX Nifty futures on the Singapore stock exchange indicates that the Nifty could fall 49.50 points at the opening bell. Asian stocks dropped on Monday amid concern a credit squeeze in China will curb growth and after a better-than-forecast monthly US jobs report fueled speculation that the Federal Reserve may begin reducing stimulus this year.
Reliance Communications (RCom) said on Sunday, 7 July 2013, that its board of directors has in-principle decided on a demerger of the real estate held by RCom into a separate unit to be called Reliance Properties, to unlock substantial value for the benefit of its about 20 lakh institutional and retail shareholders. The proposed separation of real estate into a separate unit is part of RCom's strategic plan to divest non-core assets, and focus on its core wireless and enterprise business. Reliance Properties will be a separate listed company. All shareholders of RCom will receive fully tradeable pro-rata shareholding in Reliance Properties, free of cost, based on their existing shareholding in RCom.
The preliminary and indicative monetisable value of RCom's real estate on development is estimated by independent valuers at over Rs 12000 crore ($2 billion), which is equal to Rs 60 ($1) per RCom share.
Reliance Properties will work with leading global partners to develop the real estate, and unlock this value for the benefit of its shareholders. The properties proposed to be developed by Reliance Properties include prime land at Dhirubhai Ambani Knowledge City, Navi Mumbai measuring nearly 135 acres, with saleable area of over 15 million square feet and prime property near Connaught Place, New Delhi measuring nearly 4 acres.
The board has constituted a committee to consider the matter in detail, and prepare the necessary Demerger Scheme, etc. in consultation with legal and other advisors. The demerger will be subject to approvals from shareholders, lenders, Courts, etc.
DLF has completed the Rs 325.38-crore deal to sell 150 megawatts (MW) wind turbine project in Gujarat to Bharat Light and Power. The transaction is in line with the DLF's objective of divesting its non core assets, the company said in a statement.
FMCG and agri-sector stocks will be in focus after the latest data showed a further pick-up in sowing of kharif crops. The Centre on Friday, 5 July 2013, said that as per reports received from state governments, the total sown area in the country stands at 401.69 lakh hectare (lh) as on 5 July 2013, compared with 215.07 lh at this time last year.
The India Meteorological Department said on Friday, 5 July 2013, that the cumulative seasonal rainfall for the country as a whole from 1-30 June 2013 has been 32% above the Long period average (LPA) with excess/normal rainfall activity over 92% area of the country. For the country as a whole, cumulative rainfall during this year's monsoon has so far upto 3 July been 27% above the LPA. The cumulative seasonal rainfall activity continued to be excess over all the four homogeneous regions except east & northeast India, where it was 37% below LPA.
IDBI Bank after market hours on Friday, 5 July 2013 said that the Government of India (GoI), Ministry of Finance, Department of Financial Services has, vide their letter dated 5 July 2013, appointed M. S. Raghavan as Chairman & Managing Director of IDBI Bank from 5 July 2013, for a period upto 30 June 2015, i.e., the date of his attaining the age of superannuation or until further orders, whichever is earlier.
Ashok Leyland after market hours on Friday, 5 July 2013 said it has secured an order from the Institute of Road Transport (IRT), Tamil Nadu for the supply of 2,610 buses. IRT is a nodal organization that procures buses for all transport corporations in Tamil Nadu.
Key benchmark indices edged higher in volatile trade on Friday, 5 July 2013, ahead of the key US nonfarm payroll data that was due later in the global day that day. The S&P BSE Sensex advanced 84.98 points or 0.44% to settle at 19,495.82 on that day, its highest closing level since 1 July 2013.
Foreign institutional investors (FIIs) sold shares worth a net Rs 15.70 crore on Friday, 5 July 2013, as per provisional data from the stock exchanges.
Asian stocks dropped on Monday, 8 July 2013, amid concern a credit squeeze in China will curb growth and after a better-than-forecast monthly US jobs report fueled speculation that the Federal Reserve may begin reducing stimulus this year. Key benchmark indices in China, Hong Kong, Indonesia, Singapore, South Korea and Taiwan shed by 0.94% to 2.19%. Japan's Nikkei Average rose 0.27%.
US stocks surged on Friday, 5 July 2013, after government data showed the nation added more jobs than forecast last month. The non-farm payrolls increased by 195,000 in June and the unemployment rate held steady at 7.6% as more people entered the workforce. Job growth in previous months also was revised higher. Federal Reserve Chairman Ben Bernanke on 19 June 2013 said that the central bank may taper the pace of its bond purchases, currently set at $85 billion a month, as early as this year if the economy continues to improve in line with its forecasts.
The minutes of Federal Open Market Committee's (FOMC) policy meeting held on 19 June 2013 will be released on Wednesday, 10 July 2013. Bernanke is also due to deliver a speech on that day.