Wall of worries

The best thinking has been done in solitude. The worst has been done in turmoil.Thomas A. Edison.

Don't try to act too smart and curb your bravado as the mayhem triggered by the European debt turmoil shows no signs of abating. Prepare for another shakeout today, at least in the morning trades as risk aversion continues to reign supreme amid growing fears that the ongoing debt problems in Europe will upset the global economic recovery. The key Indian indices are likely to nose-dive at opening bell and the NSE Nifty is expected to test 4950, which is seen as a major support. Hopefully, there will be some recovery as the day wears on and the Nifty will end above the psychological 5000 mark.
Reliance and RNRL will be in focus today as the supreme court is likely to deliver the long-pending verdict in the gas dispute. Nobody has a clue what the final decision will be. But, since Reliance is an index bellwether any sharp movement in it definitely has a bearing on the sentiment. Overall, the trend looks weak unless global markets rebound. Don't take any aggressive bets and just stay put as the global situation is not conducive right now, though for India there aren't too many worries.

Europe's debt crisis and technical glitches in computer-driven trading sparked a massive selloff on Wall Street. The euro slid to a fresh 14-month low against the dollar, and investors fled to Treasuries, gold and other safe-haven investments. The Dow at one point was down almost 1,000 points. The blue chip US index recovered sharply but still ended over 3% down. The fact that the massive drop in the Dow intra-day was largely driven by some technical error should give some solace to the bulls. The monthly US jobs report will be out later today, and if estimates are anything to go by, it should show big improvement. That might potentially change things slightly after the recent mayham.

Coming to European markets, it wasn't such a bad scene though stocks did extend the recent slide after the ECB said it has no plans to buy debt to support countries in the euro zone under fiscal strains. Asian markets are down sharply with the Hang Seng and Shanghai pacing the slide.

Securities and futures regulators in the US say they are working with exchanges to examine 'unusual' trading activity during the day's massive sell-off.

Nasdaq OMX Group said late on Thursday that it will cancel all trades made earlier in the day between 2:40 p.m. Eastern time and 3 p.m. Eastern time which were "greater than or less than 60% away from the consolidated last print in that security at (2:40 p.m.) or immediately prior to that. Nasdaq said no technology or system issues were associated with trading in the afternoon that helped push US markets into an alarming nosedive. Nasdaq said the trades will be canceled "on the participant's behalf," and will affect numerous stocks.

Meanwhile, the Greek parliament has passed the tough Austerity Measures proposed by the government in return for the massive aid package from the EU and IMF. The crucial vote stirred immediate concerns about unrest among the thousands of protesters massed in Athens.

Markets in Europe nose-dived after the European Central Bank disappointed investors hoping for decisive action to contain the euro zone's debt crisis. In the UK, exit poll give Tories 307 seats, labour 255 and Lib Dems 59, leaving no partty in overall control of the House.

Results today: AV Birla Nuvo, Bank of India, Cipla, KPIT Cummins, NIIT, Novartis India, Oracle Financial, Panacea Biotec, Piramal Healthcare, SRF and Torrent Power.

FIIs were net sellers of Rs9.38bn in the cash segment on Thursday on a provisional basis, according to NSE web site. Local institutions were net buyers of Rs3.8bn. FIIs were net sellers of Rs13.89bn in the cash segment on Wednesday, as per the SEBI data.

US stocks plunged anew, but were quite a way off the intra-day lows, as panic gripped Wall Street amid mounting concerns that the European debt crisis is spiraling out of control and will hurt the global economic recovery.
The Dow plunged almost 1,000 points before recovering to close down 348 points, as erroneous trading in Procter & Gamble and several other stocks sparked a massive selloff.
Fears about the spread of the European debt crisis dragged on stocks through the early afternoon. But the selling picked up in intensity and the Dow reached its nadir in mid afternoon. The selling was a result of technical glitches that caused some stocks, including Dow component Procter & Gamble to plunge 37%. The consumer products maker recovered most of that loss by the close, ending just 2% lower.
But the faulty P&G trading was responsible for 172 of the 998.50 points that the Dow Jones industrial average lost at its worst, the biggest one-day point decline on an intraday basis in Dow Jones history. Accenture, 3M, Sotheby's and other stocks may have been impacted by similar problems.
Finally, the Dow ended down 3.2% at 10,520.32. The Dow's biggest one-day point decline on a closing basis was Sept. 29, 2008, when it fell 777.68, which had also been the previous intraday mark. The S&P 500 index slipped 38 points, or 3.2%. The Nasdaq composite dropped 83 points, or 3.4%.
The dollar rallied early versus the euro, with the European currency falling to its lowest level since March of 2009. But by late day, the dollar had turned lower. It also fell versus the Japanese yen.
U.S. light crude oil for June delivery dropped $2.86 to settle at $77.11 a barrel on the New York Mercantile Exchange.
COMEX gold for June delivery rose $22.30 to settle at $1,197.30 per ounce.
Treasury prices rallied, lowering the yield on the 10-year note to 3.40% from 3.55% on Wednesday.
The US market collapsed some major technical support levels, and could be in for more selling Friday. The key is to get Germany's vote in favor of the Greek aid package from the European Union. If that happens, that could help calm fears and stabilize the market. Friday's big April jobs report could end up being a non-event.
The CBOE Volatility (VIX) index, Wall Street's so-called fear gauge, closed at 34.16, its highest finish since May 4, 2009. Earlier, it had spiked as high as 40.71, a 62% jump and its biggest one-day surge since February 2007.
The run from the euro and into the dollar and US government debt was a classic flight to quality. The continued weakness of the euro will continue to be a big drag on the markets as it pummels dollar-traded commodities and also hurts companies that do a lot of business overseas. Europe and Greece, and specifically the fear of contagion, is what's driving the market lower.
The number of Americans filing new claims for unemployment fell to 444,000 last week from a revised 451,000 the previous week. Economists thought claims would fall to 440,000. Continuing claims, a measure of Americans who have been receiving benefits for a week or more, dropped to 4,594,000 from a revised 4,653,000 in the previous week. Economists expected 4,600,000 continuing claims.
The report was released one day ahead of the government's closely watched April jobs report, due out on Friday morning. That report is expected to show employers added 187,000 jobs to their payrolls after adding 162,000 in March, according to economists.
Retailers reported that April sales slowed from March's robust gains, with a majority of those reporting missing expectations.
Freddie Mac reported an $8 billion quarterly loss on Wednesday and also said it needs another $10.6 billion from the federal government. The company was put into conservatorship by the government during the height of the financial crisis in 2008, along with its sister company Fannie Mae.
European shares continued to slide, with the banking sector taking the bulk of the hammering, after the European Central Bank opted against buying bonds of euro-zone governments as it kept its key rate on hold.
Investors pushed stock prices lower on heightened worries that Europe's high budget deficits would lead to a fresh global financial crisis. As Greece looked to a $144 billion rescue from the International Monetary Fund and 15 other nations that use the euro to help cover its debt, some questioned if Portugal and Spain would eventually need to be bailed out as well.
The Stoxx Europe 600 index ended down 1.3% at 247.24, bringing week-to-date losses for the index to 4.9%.
The European Central Bank held interest rates at 1% on Thursday and ECB president Jean-Claude Trichet said that the prospect of a default within the euro zone is, for me, out of the question. Trichet also said that the ECB's Governing Council didn't discuss the option of purchasing euro-zone government bonds in the secondary market.
National Bank of Greece shares were up 3.8% and the Greek ASE Composite index rose 1% to 1,678.42.
The French CAC-40 index closed down 2.2% at 3,556.11 and the German DAX index ended the day down 0.8% at 5,908.26. With the UK general election taking place and the FTSE 100 index fell 1.5% to end at 5,260.99.
In the currency markets, the euro took a battering against the so-called "safe haven" Swiss franc

It was a day of wild swings and yet at the end of it all the Indian indices extended losses for the fourth straight session. "Markets ended on a weak note as the Greek storm continued to wreck havoc across the globe and concerns also escalated on Chinese government’s monetary tightening spree", says Amar Ambani, Vice President Research, IIFL. Sentiment was hit after the Shanghai Composite index in China lost over 4% today. The Nikkei in Japan and the Kospi in South Korea also fell sharply after a day’s break.

The NSE Nifty has slipped over 3.5% or 187 points and the BSE Sensex has lost 3.2% or 570 points in four days. On Thursday, the BSE Sensex lost 100 points to end at 16,988 and NSE Nifty fell 34 points to close at 5,091. Among the 30 components of Sensex, 21 ended in the negative terrain and 9 ended in the green.

Markets in Asia ended in the red; the Nikkei in Japan slipped 3.2%, Australia's S&P/ASX was down 2.1%, the Hang Seng index in Hong Kong was down 1% and Shanghai SE Composite dropped 4%.

On the other hand, European indices were trading with a slight positive bias, the DAX in Germany was up 0.3%, the CAC 40 index in France was up 0.2% and the FTSE in the UK was flat.

Among the BSE sectoral indices, the BSE Pharma index was top gainer; the index gained 1.4%, followed by BSE PSU index up 0.6%. However, the BSE Teck index was the major loser, down 1% and BSE Capital Goods index fell 1%. Even the Mid-Cap index slipped 0.5% and the Small-cap index ended almost unchanged.

Outside the frontline indices, the big losers in the broader market were Indian Bank, Praj Industries, Fin Tech and Rolta. On the other hand, gainers included Hindustan Copper, Ashok Leyland, Max India and Piramal Health.

Punjab National Bank (PNB) posted a net profit of Rs11.35bn for the quarter ended March 31, 2010 as compared to Rs8.65bn for the quarter ended March 31, 2009. Total Income has increased from Rs60.47bn for the quarter ended March 31, 2009 to Rs64.60bn for the quarter ended March 31, 2010.

Shares of PNB edged higher by 0.2% to end at Rs1044. The scrip opened at Rs1145 it touched an intra-day high of Rs1145 and a low of Rs1025 and recorded volumes of over 0.6mn shares on NSE.

Union Bank of India has posted a net profit of Rs5.93bn for the quarter ended March 31, 2010 as compared to Rs4.65bn for the quarter ended March 31, 2009. Total Income has increased from Rs38.48bn for the quarter ended March 31, 2009 to Rs40.54bn for the quarter ended March 31, 2010.

Shares of Union Bank of India fell 2.1% to end at Rs295. The scrip opened at Rs304 it touched an intra-day high of Rs306 and a low of Rs294 and recorded volumes of over 0.94mn shares on NSE.

Shares of Hindustan Zinc slipped by 1.2% to end at Rs1130 after reports stated that the company has cut price by 5.9% from May 6, 2010. The scrip opened at Rs1138 it touched an intra-day high of Rs1142 and a low of Rs1111 and recorded volumes of over 0.14mn shares on NSE.

Core Projects announced that the company had on April 15, 2010 launched and priced FCCBs for an aggregate amount of US$60mn (with an additional upsize option of US$15mn granted to the Sole Bookrunner being Standard Chartered Bank). The Company has informed that, the upsize option of US$15mn has been exercised by the Sole Bookrunner.

The FCCBs having a maturity of 5 years and 1 day are convertible at an initial conversion price of Rs271.80 per share (to be adjusted from time to time, as may be applicable). The issue of FCCBs is subject to customary closing conditions.

The stock slipped 0.8% to end at Rs250. The scrip opened at Rs252.6 it touched an intra-day high of Rs257.9 and a low of Rs248 and recorded volumes of over 0.15mn shares on NSE.

IRB Infrastructure emerged as the Preferred Bidder for the Project. The company had submitted its Bid with the National Highways Authority of India ("NHAI") for Design, Build, Finance and Operation of Six Lanning of Tumkur - Chitradurga section from km. 75.00 to km. 189.00 of NH-4 (approximately 114.00 km.) in the state of Karnataka under NHDP Phase V on BOT basis (the "Project"). The Project is on Premium basis with the concession period of 26 years and estimated cost of the Project is Rs12bn.

The company has to pay a premium of Rs1.4bn for the Project to the NHAI, in the first year".

The stock slipped by 2.6% to end at Rs274. The scrip opened at Rs284 it touched an intra-day high of Rs284 and a low of Rs272 and recorded volumes of over 0.73mn shares on NSE.