Storm passes by!

It is the set of the sail that decides the goal, and not the storm of life.

The worst of the storm has passed for the economy, says President Obama in the State of the Union address minutes ago. After having a torrid time over the last few sessions and suffering heavy losses, bulls could heave a sigh of relief today.

Things appear to be stabilising a bit after the recent storm. US stocks ended higher and a rebound in Asian markets. European stocks closed in the red, dragged down by losses in banks. We expect a higher opening on firm global cues. The SGX Nifty futures are pointing to a 1% gain at start.

Volatility could escalate due to the F&O expiry as also due to the near-term uncertainties. The Nifty could cross 4900 but it remains to be seen if it sustains above that level. The Nifty will find it tough to surpass 5000 unless FIIs turn buyers again and global mood improves.

The RBI is expected to hike CRR at its policy meeting tomorrow. The market could stage a meaningful recovery in the ensuing days if the RBI does not spring a nasty surprise.

Results Today: Aban Offshore, Alstom Projects, Apollo Hospitals, Avaya Global, BOI, Bharati Shipyard, Blue Dart, BPCL, BPL, Britannia, Cairn India, Canara Bank, Central Bank, Cipla, Colgate India, Crompton Greaves, Den Networks, Dena Bank, Dredging Corp., Engineers India, Federal Bank, GMR Infra, IOB, IRB Infra, IVRCL Infra, J&K Bank, Jai Corp., Jain Irrigation, Jindal Steel, Jindal Stainless, Kesoram, Madras Cements, Marico, MRF, Mundra Port, Opto Circuits, OBC, Pidilite, Reliance Media, Tata Steel, Tata Tea, Torrent Power, Ucal Fuel and United Phosphorus.

FIIs were net sellers in the cash segment on Wednesday at Rs22.12bn on a provisional basis. The local funds were net buyers of Rs14.75bn, according to figures published on the NSE's web site. In the F&O segment, the foreign funds were net sellers at Rs7.49bn. As per the SEBI figures, FIIs were net sellers of Rs9bn in the cash segment on Monday.

Wall Street and European market roundup will be updated a little later.

To say that it was a horrendous day for the bulls would be an understatement. Equity markets in India collapsed like a pack of cards, tumbling for a sixth straight session. With this, India has witnessed the longest sequence of losses in three months. Short term traders have borne the brunt of the drubbing as the BSE Sensex plunged over 1350 points or 7% in only a week’s time.
Indian stocks were getting pounded even though equity markets across the globe were down by only a percent or so. What’s worse, the bloodbath today was accompanied by record breaking turnover, a day before the F&O expiry. The total turnover on the bourses went past Rs1.80 lakh crores with the F&O turnover surpassing Rs1.57 lakh crores.
Corporate earnings were completely ignored as investors turned nervous ahead of the RBI policy meet on Friday. It may be recalled that global sentiment has been hit lately by fears of monetary tightening by China and strict new norms for large US banks. High beta stocks like Realty, Banking and Metals took it on the chin.
Technically speaking, the Nifty went on to break the 100 DMA which has proved to be a crucial support/resistance level in the past. Earlier when the Nifty breached the 100 DMA the index slipped from a high of 6,000 to March 2009 lows. So are we entering in an intermediate bear phase? It is a tough call to take at this juncture. Just wait and watch.
What also made marketmen jittery are a slew of big events scheduled in the US this week. The Fed policymakers will announce the outcome of a two-day meeting later today. Also, the State of the Union address is due from President Barack Obama. A vote is expected on Fed chief Ben Bernanke’s second term. US secretary Tim Geithner will also be in the firing line of US lawmakers for the controversial bail outs of AIG and other top Wall Street firms.
Finally, the BSE Sensex slumped 490 points to end at 16,289 after touching a high of 16,877 and a low of 16,705. The Nifty fell 155 points to end at 4,853.
Equity markets in Asia ended in the red. The Nikkei in Japan was down 0.7%, while Australia's S&P/ASX ended lower by 1.5%. The Shanghai SE Composite ended lower by 1% and Hang Seng index in Hong Kong was down 0.4%.
The Shanghai Composite Index in China fell below the 3,000 levels forthe first time since October 30. The slide was led by the bankingstocks which witnessed huge selling on account of lending curbs. Inaddition raw- material producers also slid.
The Shanghai SeComposite index declined 1.1% to end at 2,986. The index also slippedbelow its 200-day moving average for the first time in 2-years.
In Europe, stocks were trading in the red. The DAX in Germany was down 0.4% and the CAC 40 index in France was down 0.8. The FTSE in the UK was down 0.7%.
Coming back to India, the BSE Realty index was the top loser, shedding 8%, followed by the Metal index that was down 6% and the BSE Auto index was down 5%. The BSE Mid-Cap index slipped 4% while BSE Small-Cap index was down 5%.
Among the 30-components of Sensex 29 ended in the negative terrain and only ITC stood firm. ICICI Bank, Tata Steel, SBI, Reliance Industries and HDFC Bank were among the top losers.
Outside the frontline indices, the big losers in the broader market were HCL Tech, Century Tex, Madras Cem, Yes Bank and Voltas. On the other hand, gainers included Jai Corp, Jet Airways, Koutons, Gujarat NRE and REI Agro..
Shares of SAIL slipped 3% to end at 216. The company announced its Q3 results with net profit at Rs16.76bn as compared to Rs8.43bn in the same period last year, registering a growth of 98% YoY.
Adani Enterprises posted a consolidated net profit of Rs3.03bn for the quarter ended December 31, 2009 as compared to Rs1.31bn for the quarter ended December 31, 2008. Total Income has decreased from Rs66.56bn for the quarter ended December 31, 2008 to Rs63.82bn for the quarter ended December 31, 2009.
The Company posted a net profit of Rs304.9mn for the quarter ended December 31, 2009 as compared to Rs559.4mn for the quarter ended December 31, 2008. Total Income has decreased from Rs31.76bn for the quarter ended December 31, 2008 to Rs28.08bn for the quarter ended December 31, 2009.
Shares of Adani Ent slipped by 2% to end at Rs444. The scrip opened at Rs458 it touched an intra-day high of Rs458 and a low of Rs435 and recorded volumes of over 0.14mn shares on BSE.