After a sudden setback on Thursday, the bulls are looking forward to accelerate the pace of gains. Healthy cues from global markets will surely help their cause. US stocks rose, with the Nasdaq hitting a 5-month high, after JPMorgan came out with encouraging results. Google too has managed to top Wall Street earnings estimates. Nokia shares gained despite its profit sinking 82%. The mobile handset titan says demand is stabilising. Shares in Europe too advanced. In emerging markets, Brazil’s Bovespa has reached a six-month peak. Markets in Asia have opened higher as well.
The positive global trend will have its rub-off on the Indian market too. However, the unpredictability associated with elections and fear of sudden corrections, like the one on Thursday, could cap gains. Technically, the 200DMA would continue to be a key resistance. No major results are in store for today, except PFC. Next week we will have the RBI announce its annual policy and the central bank may trim key rates as inflation is a non-issue. But, the event may not have much of a bearing on sentiment.
FIIs were net buyers in the cash segment on Thursday at Rs4.79bn while the local institutions chose to offload shares worth Rs11.24bn. In the F&O space, the foreign funds were net sellers at Rs7.38bn. On Wednesday, FIIs were net buyers at Rs7.72bn in the cash segment.
PFC, PSI Data Systems, Logix Micro and Sonata Software will announce their results today.
US stocks rallied on Thursday with the major stock indices touching multi-month highs on better-than-expected results from JPMorgan Chase, Google and Nokia.
The Nasdaq Composite index added 44 points, or 2.7%, ending at the highest point since Nov. 5, 2008. The Dow Jones Industrial Average added 96 points or 1.2% and the S&P 500 index gained 13 points, or 1.6%. Both closed at their highest points since Feb. 9.
After seesawing through the morning, US stocks began making a bigger move higher in the afternoon, before spiking near the close.
Stocks gained on Wednesday after a Federal Reserve report on the economy added to hopes that the pace of the slowdown is easing. Such hopes have helped bolster the market for nearly six weeks. Since hitting 12-1/2 year lows on March 9, the S&P 500 has risen 25% as of Wednesday's close.
JPMorgan Chase reported a higher-than-expected profit of $2.1 billion, although results were weaker than a year earlier. The company benefited from strength in its investment and consumer banking divisions, but also posted $10 billion in credit costs. JPMorgan shares gained 2%.
Earlier in the week, Goldman Sachs also reported weaker quarterly results that nonetheless topped estimates. Wells Fargo last week forecast that it would report a $3 billion profit.
Nokia reported a more than 90% drop in operating profit versus a year ago amid the global slowdown in the mobile phone market. However, results were expected to be worse and shares rallied 11.4%.
AIG said it will sell its U.S. car insurance business to a unit of Zurich Financial Services for $2 billion, as it begins the process of paying back the billions its received in federal aid. Shares gained 5.6%.
Hewlett-Packard (HP) rose to a two-month high after it took the top spot in the nation’s personal-computer market and industry shipments decreased at a slower rate in the U.S. than the rest of the world.
U.S. PC shipments dropped at a slower rate than the rest of the world, falling 3.1 percent to 15 million last quarter, Framingham, Massachusetts-based IDC said. Stamford, Connecticut- based Gartner said U.S. shipments were little changed.
New home construction slumped almost 11% last month, falling to the second lowest level on record, indicating that the housing market has not yet bottomed. March housing starts fell to an annual rate of 510,000 units versus a revised 572,000 units in the previous month. Economists had forecast starts would rise to 540,000 units.
Building permits, a measure of builder confidence, fell to a 513,000 annual unit rate from a revised 564,000 unit rate in the previous month. Economists expected 549,000 permits.
The number of Americans filing new claims for unemployment fell to 610,000 last week from a revised 663,000 the previous week. Economists expected 658,000 new claims. Continuing claims, the number of people seeking benefits for a week or more, rose to 6.02 million, an all-time high.
The April Philadelphia Fed index improved to a decline of negative 24.4 from negative 35.0, versus forecasts for a reading of negative 32.
Treasury prices slumped, raising the yield on the benchmark 10-year note to 2.83% from 2.76% on Wednesday.
In currency trading, the dollar gained versus the euro and the yen.
U.S. light crude oil for May delivery rose 73 cents to settle at $49.98 a barrel on the New York Mercantile Exchange.
COMEX gold for June delivery fell $13.70 to settle at $879.80 an ounce.
Friday brings quarterly results from Citigroup and General Electric (GE), both Dow components. Also, the University of Michigan consumer sentiment index is due for release shortly after the start of trading.
European shares too advanced on Thursday. The pan-European Dow Jones Stoxx 600 index rose 1.7% to 193.82. Stronger-than-expected quarterly results from U.S. banking giant J.P. Morgan Chase helped banks extend early gains.
UK's FTSE 100 index rose 2.1% to 4,052.98, the French CAC-40 index advanced 1.8% to 3,038.18 and Germany's DAX 30 index climbed 1.3% to 4,609.46.
Indian market snapped an eight day long winning streak as bears returned on Dalal-Street with a vengeance. It was a day of wild gyrations as the Sensex fluctuated over 350 points and the Nifty swung over 150 points between their intra-day highs and lows.
High volatility was accompanied by huge trading volume as total market turnover crossed 1 lakh crore for second consecutive trading session.
Traders and investors preferred to book some profits even as a month-long election kicked off today. The jury’s still out on which formation will take the throne at the Centre. The counting of votes will take place on May 13. Given the high degree of uncertainty about the outcome of the Lok Sabha polls, an unexpected verdict could spoil the party for bulls.
The BSE Sensex declined 337 points, or 3%, to close at 10,947 and the NSE Nifty ended lower by 114 points, or 3.2% at 3,369.
Among the 30-components of Sensex, 24 ended in negative terrain and 6 ended in the green. Among the major losers were, Tata Motors, Reliance Infra, DLF, Tata Steel, JP Associates, Hindalco and Ranabxy.
However, bucking the negative trend were ITC, Wipro, Sun Pharma, Hindustan Unilever and Maruti.
Shares of Kingfisher Airlines declined by 12% to Rs35. According to reports, the company has sought 10 more days to pay IOC its jet fuel dues. The scrip touched an intra-day high of Rs42.4 and a low of Rs34.7 and recorded volumes of over 2.2mn shares on BSE.
Shares of Hero Honda gained by 1.2% to Rs1080. According to reports, the Group pulled out of JV with Daimler to manufacture commercial vehicles in India. The scrip touched an intra-day high of Rs1097 and a low of Rs1067 and recorded volumes of over 0.12mn shares on BSE.
Suzlon Energy is reportedly facing renewed problems over faulty blades, according to a report published in the Wall Street Journal (WSJ). This time it is for a project in China's Shandong province. It may be recalled that last year, Suzlon had faced some client-side issues with blades in the US.
According to the Wall Street Journal (WSJ), Suzlon is contracted to supply blades for 75 turbines in a project being managed by Germany's RePower Systems AG, with an option for 75 more. RePower rejected the prototype and ordered the equipment from elsewhere, the WSJ says.
Suzlon owns 74% of RePower although it has to manage it at arm's length because of German laws protecting minority investors. RePower lost 6mn euros because of the problems with the first batch and Suzlon said it was working vigorously on testing the latest blades, according to the WSJ.
Shares of Suzlon plunged by over 18% to Rs56 after hitting an intra-day high of Rs73 and an intra-day low of Rs53.5 recording volumes of over 20.8mn shares on BSE.
Punj Lloyd announced that it secured three projects aggregating to Rs3.08bn from Bangalore Metro Rail Corporation for construction of eight elevated metro stations in Bangalore.
The stock however ended 8% lower at Rs121 after it touched an intra-day high of Rs136 and a low of Rs118 and recorded volumes of over 4.2mn shares on BSE.
The party for the bulls was cut short on Thursday with bears returning with a vengeance. And, given the high degree of uncertainty about the outcome of the Lok Sabha polls, an unexpected verdict could further dampen the sentiments.
