The Indian markets made a flat closing in previous session, though the benchmarks made a valiant effort and surged during the day but the last hour profit booking took off all the gains. Today, the start is likely to be cautious as the global mood is still risk averse on fears of European debt crisis creating a financial chaos across the globe and all eyes will be on G20 summit in France and European Central Bank’s policy meeting in Frankfurt. On domestic front there is not much to give any support to the local market; however the investors will be eyeing the weekly food inflation number. Meanwhile, though the international crude prices after surging high has declined overnight but the Oil minister S Jaipal Reddy has said that an immediate increase in motor or kitchen fuel prices is not on the government’s radar and that may put the PSU oil companies in somber mood. The oil companies are free to revise petrol price but they do not move without an informal nod from the oil ministry since it is the majority owner. So far, the government has resisted increasing prices for fear of stoking anger from consumers feeling the pinch of high inflation and costlier loan installments.
There will be lots of scrip specific action and the markets may show a sign of recovery with the positive movement in the European markets in the latter part of the day. The top mover of last session, Reliance Industries may further its gains on report that the company is likely to join hands with Anil Ambani’s Reliance Communication (RCom) in a bid to launch cheaper tablet devices for Rs. 6,000 a piece.
There will be lots of major result announcements too, to keep the markets buzzing, Ashok Leyland, Gujarat Gas, Kesoram Inds, Jubilant Foodworks, SAIL, TVS Motor, Tata Teleservices etc. will be among the many to announce their numbers today.
The US markets made a good recovery on Wednesday on Feds affirmation that it will help the economy when required, however it didn’t offered any immediate help. Traders were also happy on the report of increase in hiring by private companies and hopes of resolution to the Europe’s debt crisis. The Asian markets have made a weak start and barring Shanghai most of the other indices are trading in red on fears that Europe’s debt crisis could unleash financial chaos.
Back home, Wednesday’s session turned out to be another disappointment for the Indian stock markets as the optimism that was evident in afternoon trades fizzled out completely by the end leading the benchmark equity indices to a flat closing. The session’s trade was largely marred by high volatility as the key indices gyrated between gains and losses frequently. Investors lacked conviction to open fresh positions amid uncertainties surrounding the European region. The upside for local markets was capped by reports that Greek PM won the backing of his cabinet to hold a referendum on a 130 billion euro bailout package. The weaker than expected global manufacturing growth, particularly in world’s top two economies the US and China, reignited fresh worries over the strength of global economic recovery. However, investors hoped some encouraging developments from the global front ahead of a key US Federal Reserve meet outcome which may signal more measures to bring the weakening US economy back on recovery mode. On the domestic front, the over a percent surge in index heavyweight Reliance Industries did its bit in preventing a sharp decline for the frontline gauges while gains in some stocks from the rate sensitive banking and automobile counters too proved beneficial. Meanwhile, PSU oil marketing companies too went home with notable gains on the back of reports that government owned oil companies are planning to hike the petrol prices for 13th time since June 2010, due to depreciation in rupee which increased the cost of imports of crude oil. Earlier on Dalal Street, the benchmark got off to a sluggish opening as investors largely remained influenced by the pessimistic sentiments prevailing in Asian markets. But the indices soon started showing signs of recovery and bounced back into the green territory in mid morning trades. The key gauges hit highest point in the session in early afternoon session mirroring the European futures which traded good gains of over a percent. However, the indices failed to capitalize on the momentum and instead optimism petered out by the end of trade leading the bourses to a quiet finish. Moreover, the broader markets finished on a mixed note but stayed in close proximity with the previous closing levels. On the BSE sectoral space, the rate sensitive Auto and Bankex counters settled as the top laggards in the space after suffering losses of less than half a percent. On the flipside, the Oil and Gas and the defensive Healthcare and FMCG pockets went home with a positive close. Finally, the BSE Sensex lost 15.98 points or 0.09% to settle at 17,464.85, while the S&P CNX Nifty gained 0.50 points or 0.01% to close 5,258.45.
The US market recovered on Wednesday breaking the two days declining streak after European leaders once again scrambled to save a week-old plan to prevent a financial crisis in region. Euro rose against the dollar and a sense of relief emerged with a revolt in George Papandreou’s government that could scuttle the Greek referendum. The markets also got some support with Federal Reserve’s statement that the US economy would likely expand over the next two years. However, Fed Chairman Ben Bernanke cautioned that the pace of economic growth will likely be “frustratingly slow.” The Fed said it would not take any more steps to help the economy for now, but it left open the possibility of more steps later. Also, there was report of increase in hiring by private companies that supported the investors’ morale. The Dow Jones industrial average gained 178.08 points, or 1.53 percent, to 11,836.04. The Standard and Poor’s 500 was up by 19.62 points, or 1.61 percent, to 1,237.90, while the Nasdaq composite closed higher by 33.02 points, or 1.27 percent, to 2,639.98.
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