It's not whether you're right or wrong that's important, but how much money you make when you're right and how much you lose when you're wrong.
Looks like the market can't make up its mind on where to go. After a strong start, the market appears to have slipped back into consolidation zone yet again. Most players are awaiting India Inc. to kick off the earnings season. The bright news on this front has been mostly discounted. What company head honchos say (and do) about the medium term outlook will be crucial.
A lot of hopes are pinned on the Budget (which may be on a Saturday) and corporates and investors will hope it is not just another annual ritual this time. Any government announcement on its ‘exit’ from the fiscal stimulus would be a key element. By the end of this month, we are most likely to hear from the RBI on its plan to reverse the easy monetary policy.
Today we expect a flat opening and another choppy day. With lack of triggers - positive or negative - some shuffling of portfolios could take place. A softening before the results could give more confidence for investors to re-enter.
FIIs were net buyers in the cash segment on Wednesday at Rs6.6bn on a provisional basis. The local funds were net sellers of Rs2.86bn, according to figures published on the NSE's web site. As per the SEBI figures, FIIs were net buyers of Rs10.62bn in the cash segment on Tuesday.
Globally too all seems to be quiet at the moment. Markets continue to drift after the year-opening rally amid lack of fresh impetus. However, commodity prices, including crude oil, have firmed up. US monthly jobs data on Friday could have a temporary bearing on sentiment. Some concerns still remain on sovereign debt default.
A slow recovery is still the most likely scenario for the global economy. So, policymakers cannot afford to withdraw the stimulus measures in a haste. People are still cautious as nobody has a clue on how the economic recovery will unfold and what impact it will have on the markets. Plenty of money is still on standby, and this will find its way into equities if the incremental news turns out to be better than expected.
On Wall Street, the Nasdaq slipped a bit and the broader market was largely volatile on Wednesday as investors considered weakness in technology and telecom along with signs of stabilization in the job market and services sector of the economy.
The Dow Jones Industrial Average ended just above unchanged, at 10,573.68. The S&P 500 index was little changed as well, at 1,137.14. The Nasdaq Composite lost 7 points, or 0.3%, at 2,301.09.
After starting off the new year with a big rally, investors were cautious, with stocks churning in a tight range on Tuesday and on Wednesday. A stronger dollar and some nervousness ahead of Friday's big monthly jobs report kept investors at bay.
Market participants are also likely holding back in the wake of a big 2009, in which the S&P 500 gained 23%, the Dow industrials added 19% and the Nasdaq added 44%.
Two private firms released reports on the December labor market, ahead of Friday's big non-farm payrolls report from the government.
Payroll services firm ADP said employers in the private sector cut 84,000 jobs from their payrolls last month, the smallest monthly decline since March 2008. However, economists were expecting 75,000 cuts, on average. Employers cut 145,000 jobs in November.
Outplacement firm Challenger, Gray & Christmas reported that 45,094 job cuts were announced in December, down from November's 50,349 figure. December 2009's number was the lowest since December 2007.
On Friday, the government is expected to report no change in non-farm payrolls last month, after employers cut 11,000 in the previous month. The unemployment rate, generated by a separate survey, is expected to show that the unemployment rate rose to 10.1% from 10% in November.
The Institute for Supply Management's services sector index rose to 50.1 from 48.7 in the previous month. Economists thought it would rise to 50.5, on average. A reading over 50 indicates expansion in the sector.
The Federal Reserve released the minutes from its December policy meeting. At that meeting, the bankers opted to continue to hold interest rates at historic lows near zero. The minutes showed the bankers thought that the economy was continuing to strengthen and that downside risks were waning.
Ford Motor rallied 3.7% in active New York Stock Exchange trading one day after it reported strong December sales at the end of one of the worst years in memory for the automakers.
On Tuesday, Ford said that US sales jumped 34% in December versus a year ago and rose 50% from November. For the year, sales fell 15%. Ford's December sales were better than expected. Toyota and Honda also reported better-than-expected results.
Dow component 3M gained 1.4% after Goldman Sachs upgraded it to its "Conviction Buy" list from a "Buy" rating.
The dollar fell versus the euro gained against the yen.
COMEX gold for February delivery gained $17.80 to settle at $1,136.50 an ounce. Gold closed at an all-time high of $1,218.30 an ounce last month.
US light crude oil for February delivery rose $1.41 to settle at $83.18 a barrel on the New York Mercantile Exchange, the highest close since October 2008.
Treasury prices fell, raising the yield on the 10-year note to 3.80% from 3.75% late on Tuesday.
Stocks in Europe fluctuated between gains and losses as the market continued to meander after the year-opening rally. The pan-European Dow Jones Stoxx 600 index, moving in a narrow trading range through the day, finished up 0.1% to 257.83.
The UK's FTSE 100 index slipped 0.1% to 5,530.04, while the German DAX index was roughly flat at 6,034.33 and the French CAC 40 index inched 0.1% higher to 4,017.67.
Bulls which seemed to be happy for the past couple of days witnessed a round of profit-booking on Wednesday. The Nifty did manage to pierce the 5,300 milestone today in the early trades but was unable to hold on to the gains as selling in IT, telecom and select metal stocks dragged the benchmark indices to end on a flat note.
Apart from Pharma, Realty and Oil & Gas stocks, even the tea and sugar stocks were in demand; the broader indices also ended with smart gains.
Cues from the international equity markets were not that encouraging, US stocks ended with modest losses whereas Asian markets ended on a flat note.
The BSE Sensex edged higher by 15 points to end at 17,701 after touching a high of 17,790 and a low of 17,636. The Nifty ended flat at 5,282.
Equity markets in Asia were positive. The Nikkei in Japan was up 0.5%, while Australia's S&P/ASX ended flat. However, the Shanghai SE Composite was down 0.8% and Hang Seng index in Hong Kong was up 0.7%.
In Europe, stocks were trading slightly lower. The DAX in Germany was down 0.2% and the CAC 40 index in France was down 0.3%. The FTSE in the UK was down 0.4%.
Coming back to India, among the BSE sectoral indices, the Pharma index was the top gainer, adding 2.2%, followed by the Realty index that was up 1.2% and the BSE Oil & Gas index was up 1%. Even the BSE Mid-Cap index gained 0.7% while the BSE Small-Cap index was up 0.4%.
Among the 30-components of Sensex, 16 stocks ended in the positive terrain and 14 ended in the red. Grasim, Tata Power, M&M, DLF and Reliance Industries were among the top gainers.
On the other hand, among the major losers were Maruti, Reliance Infra, Hindalco, TCS and Tata Steel.
Outside the frontline indices, the big gainers in the broader market were Adani Enterprise, Fin Tech, Pantaloon Retail, REI Agro and Tulip Telecom. On the other hand, losers included Apollo Hosp, Godrej Cons, HCL Tech and Jai Corp.
DB Corp, the media house had a fantastic debut on the Indian bourses, the stock commenced trading at Rs250 per share on BSE as against its issue price of Rs212 per share. And after having a steady day of trade, the stock finally settled at Rs266 translating in to a premium of 25%.
The stock hit an intra-day high of Rs274.60 and a low of Rs235.50. Total volumes on the counter was 10.9mn shares on the BSE.
The company had a big hit with its IPO last month with the issue getting subscribed by nearly 40 times last month. DB Corp, which publishes Dainik Bhaskar, entered the capital markets with its IPO of 1.81 crore equity shares on December 11, 2009 at a price band of Rs.185-Rs 212.
Despite choppy market conditions, the IPO received a record response from investors with even the retail segment getting subscribed by 3.4 times. The HNI portion got subscribed 25.86 times and QIB 68.47 times. Enam Securities Private Limited, Citigroup Global Markets India Private Limited and Kotak Mahindra Capital Company Limited are the Book Running Lead Managers to the issue.
Shares of Gitanjali Gems surged by over 3.5% to end at Rs127 after ~2.4mn equity shares of the company were transacted at an average price of Rs124.95 on BSE. The scrip opened at Rs123.20 it touched an intra-day high of Rs129.80 and a low of Rs123.20 and recorded volumes of over 3.2mn shares on BSE.
Shares of Maruti Suzuki slipped by 3.5% to end at Rs1462 after the Reserve Bank of India on Tuesday announced that foreign investors need to get an approval before acquiring any more shares as holdings approached their limit. The scrip opened at Rs1520 it touched an intra-day high of Rs1520 and a low of Rs1460 and recorded volumes of over 0.36mn shares on BSE.
Hindustan Zinc announced that it plans to raise its metal output capacity to 1mn ton by Mid-2010 and it was looking for consultants for silver recovery. Shares of Hindustan Zinc ended lower by 1% at Rs1229. The scrip opened at Rs1245 it touched an intra-day high of Rs1257 and a low of Rs1222 and recorded volumes of over 28,000 shares on BSE.
Steel Strips Wheels announced that BMW nominated the company for the supply of spare wheel for its prestigious MINI model. Currently BMW is making MINI model at a single location in Oxford UK Only and it is being exported worldwide.
The said Wheel is under development and supply is likely to start in the middle of 2010 after BMW approvals. The annual Quantity of the wheels to be supplied is 48,000 per annum and the Company will supply the same from its Chennai plant.
The stock was locked at 5% upper circuit at Rs111.8, it opened at Rs104 it touched an intra-day high of Rs111 and a low of Rs104.6 and recorded volumes of over 2.3mn shares on BSE.
Shares of Pidilite Industries shot up by over 12.5% to end a Rs220 after the company announced that it is planning to consider bonus issue on January 28, 2010. The scrip opened at Rs193 it touched an intra-day high of Rs229 and a low of Rs191 and volumes of over RS191 shares on NSE.
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