RIL to hog the headlines!

Pursue your goals even in the face of difficulties, and convert adversities into opportunities. – Dhirubhai Ambani.

The Ambani brothers have taken their father’s advice and have hopefully left behind their adversities. How well they turn them into opportunities, will be visible somewhat today as RIL holds its much-anticipated AGM in Mumbai. We expect a rather subdued start to the day but Reliance group companies could hog more limelight as we wrap up another good week. Emotions may run high in the wake of the rapprochements between the two estranged Ambani siblings. Reports point to a few big-bang announcements by Mukesh Ambani. A word of caution here. Reliance and ADAG group shares have rallied in recent past. It won’t be a bad idea to adopt the ‘sell on news’ strategy and lock in some gains in these counters.

Asian markets are listless this morning despite the overnight recovery in the US and Europe. Things could turn better later on as investors will focus on improving fiscal situation in the euro-zone. The market can advance little further in the coming weeks, provided the global news flow -particularly from Europe remains positive. If bulls get dizzy at heights, be prepared to see sudden tumble.

The NSE Nifty could flirt with highs hit early in the year. It could soon cross 5300 and even rise beyond 5400 if there is no untoward incident, either locally or globally. High inflation and a possible off-cycle rate hike by the RBI cannot be ruled out. Also, fresh pressure points could come from any part of the world. Given the fact that the market has risen for seven or eight consecutive sessions it won’t be a bad idea to be a little cautious.

Meanwhile, the euro rallied following a well-received auction of Spanish debt and amid reports that European bank stress tests will be published in July, curbing fears about eurozone fiscal problems. Gold closed at all-time high of $1,248.70 an ounce. Crude oil futures settled below $77 a barrel. US treasuries gained after latest economic reports revived concerns about the health of the world’s largest economy.

The Swiss franc rose sharply after the Swiss National Bank moved towards an exit from its ultra loose monetary policy, dropping a pledge to fight excessive appreciation of its currency. The US dollar fell versus major rivals after a number of disappointing economic reports.

ITC will be in action as its board considers a bonus issue. Orbit Corp. Board will also meet today to consider raising additional long term funds through further issuance of securities for an amount not exceeding Rs10bn through preferential allotment or QIP.

FIIs were net buyers of Rs4.63bn in the cash segment on Thursday on a provisional basis, according to the NSE data. The local institutions were net sellers at Rs3.64bn on the same day. In the F&O segment, the foreign funds were net buyers of Rs5.88bn. On Wednesday, FIIs were net buyers of Rs8.58bn in the cash segment, as per SEBI data.

Yet another late session bounce helped US stocks close higher on Thursday after a successful Spanish bond auction coupled with talk of a European bank stress tests offset disappointing set of economic reports.

US stocks retreated initially after a raft of economic reports dampened optimism about a sustained recovery in the world's largest economy. But, a rally in technology, commodity and consumer shares helped investors overlook dour reports on jobless claims, manufacturing and leading economic indicators (LEI). With the euro continuing to stabilise this week, US stocks are also on track for solid gains for the week.

After trading lower for most of the session, the Dow Jones Industrial Average ended up 24.71 points, or 0.2%, at 10,434.17, with 17 of its 30 components rising.

The S&P 500 index rose 1.43 points, or 0.1%, to end at 1,116.04. The S&P 500, used as a benchmark of the broad market by money managers, is up 2.2% so far this week. The Dow industrials are also up 2.2% week to date.

The Nasdaq Composite Index finished off 1.23 points, or 0.1%, to 2,307.16. The tech-heavy index is up 2.8% for the week so far.

For every 14 shares rising, 14 fell on the New York Stock Exchange, where 1.15 billion shares traded. Composite volume topped 4.7 billion.

Markets have been choppy in the last two sessions after the Dow jumped nearly 600 points, or 6%, in just over a week. That advance came following a six-week selloff that saw the major gauges each lose more than 13%.

The euro rose 0.6% versus the dollar, continuing to recover after touching a four-year low of $1.188 last week. The dollar fell 0.7% against the yen.

COMEX gold for August delivery rose $18.20 to settle at $1,248.70 an ounce, an all-time high.

Crude-oil futures fell 88 cents to end at $76.79 a barrel.

Treasury prices rallied, lowering the yield on the 10-year note to 3.19% from 3.28% late on Wednesday.

In the day's key economic news, the number of Americans filing new claims for unemployment rose last week to 472,000 from 460,000 the previous week. Economists thought claims would drop to 450,000.

Continuing claims, a measure of Americans who have been receiving benefits for a week or more, rose to 4,571,000 from 4,483,000 the week before, versus forecasts for a drop to 4,475,000.

In other economic news, the Philadelphia Fed index, a regional reading on manufacturing, fell to 8 in June from 21.4 in May, missing forecasts for a drop to 20, as activity slowed far more than expected.

Another report, LEI, rose 0.4% in May versus forecasts for a rise of 0.5%. LEI was flat in April.

The Consumer Price index, a measure of consumer inflation, fell 0.2% in May versus forecasts for a drop of 0.1%. CPI fell 0.1% in April. So-called core CPI, which strips out volatile food and energy prices, rose 0.1% as expected after showing no change in the previous month.

BP remained in focus as its chief executive Tony Hayward testified before a House committee. Hayward told the committee he was "deeply sorry" for the catastrophe.

In other company news, grocery chain Kroger gained 3.3% after reporting higher-than-expected quarterly earnings and saying current-quarter sales are tracking roughly in line with the previous quarter.

Food and consumer products maker JM Smucker reported higher quarterly net income, sending shares up 6.6%.

Markets across Europe were buoyed by a reasonably successful Spanish bond auction and a resurgent euro which pushed up banks across the region. With this, European shares managed to extend their winning streak to a seventh session. A recovery in BP also helped.

Finishing at the highest level since May 13, the Stoxx Europe 600 index edged up 0.1% to 254.66, as a winning run has added 6% to the stock market benchmark.

The French CAC-40 index rose 0.2% to 3,683.08, the UK's FTSE 100 index advanced 0.3% to 5,253.89 and the German DAX index gained 0.5% to 6,223.54.

Retreating worries about euro-zone sovereign debt have contributed to the recent advance, and on Thursday, Spain's 3.5 billion euro bond auction proceeded smoothly. The news helped the Stoxx 600 recover from a subdued start and also boosted the euro.

Also, the publication of bank "stress tests" by the Bank of Spain, announced by the central bank on Wednesday, will help remove some of the uncertainty about Spain and help clear up some pessimism over Spain, Portugal and other euro zone economies.

Separately, European Council President Herman Van Rompuy said that stress tests on European banks will be published in July.

BP shares jumped 6.7% in London, paring year-to-date losses to 40%, after the oil giant announced a $20 billion escrow fund to compensate those affected by the two-month-old Gulf of Mexico spill and a suspension of dividend payments.

UBS shares gained 1.4%. Swiss lawmakers reached a last-minute deal that will allow the names of nearly 4,500 UBS clients and suspected tax-evaders to be handed to US authorities and should help the bank avoid further sanctions.

Switzerland's central bank said in its annual financial stability report that both banks continue to face high credit and market risks and have elevated leverage. At the same time, the Swiss National Bank toned down language regarding intervention in the foreign-exchange market.

The Indian markets extended its winning streak to sixth straight trading session, marking its longest one in 10-months. The NSE Nifty and the BSE Sensex has surged over 5% each in the past six days.

Markets started off with positive note and stayed flat to negative for the first half of the day. In fact, the benchmark indices went on to hit intra-day lows after ICICI Bank plunged from day’s high on rumours of being sued by a US Broking company. However, as the day progressed, the NSE Nifty surged past the 5250 levels and also managed to end above it taking cues from the European markets. Stocks like L&T, Tata Motors and JP Associates were among the major gainers.

"Today’s rally was seen despite flat cues from the US and mixed cues from the Asian markets in addition it was also accompanied with positive advance decline ratio", says Amar Ambani Vice President Research IIFL. Out of total 2951 stocks on the BSE, 1502 stocks ended in the green while 1310 stocks ended in the red and only 139 remained unchanged.

Later in the day, ICICI Bank clarified saying that, "There are baseless rumours circulating in the market through SMS and emails about a law suit filed against ICICI Bank in the US. We categorically deny any such law suit and state that these are malicious and unfounded rumours".

The BSE 30-share Sensex gained 154 points to close at 17,616 and NSE Nifty gained by 42 points and ended at 5,275.

Among the BSE sectoral indices, BSE Capital Goods index was the top gainer, up 1.8% followed by BSE Oil & Gas index, it was up 1.3% and BSE Auto index up 1%. Even the BSE Mid-Cap index and the BSE Small-Cap index gained 0.4% and 0.6% respectively.

Outside the frontline indices, the big gainers in the broader market were Gujarat NRE Coke, IOB, MTNL, Cummins India and Aban. On the other hand, losers included Hindustan Copper, Container Corp, Andhra Bank and BOB.