Stocks
Friday’s Market Preview: Range-bound opening likely

The domestic market is likely to open range-bound on tepid cues from the global arena. The US markets closed with marginal gains on Thursday on mixed economic news while the Asian pack is largely in the red in early trade on Friday as investors were jittery ahead of earnings reports from major corporates and a cut in Japan’s credit rating by Standard & Poor’s. The SGX Nifty was down 18 points at 5,612 from its previous close of 5,630.

Back home, Binani Cement, Havells India, ONGC, Oriental Bank of Commerce and Siemens, among others will announce their quarterly results today.

Yesterday, the market opened higher on better-than-expected quarterly data announced by some corporates and optimism from the Asian markets. The banking sector, which was the top loser on Tuesday, witnessed some buying in early trade. However, selling pressure soon led the key indices into negative territory. A marginal rise in the weekly food inflation figures also added to the woes. Volatility was associated with the expiry of the January futures and options (F&O) contract. Selling became intense in post-noon trade, dragging all the sectoral gauges into the red and closing lower for the second day in a row.

The Sensex finally ended 285 points down to close at 18,684 and the Nifty fell 83 points to close at 5,604. Thursday’s fall has broken the past week's low, hitting a new four-month low. The decline takes the market in the bear market territory. The next supports are at 5,550 on the Nifty and 18,500 on the Sensex, after which we may witness a pre-budget rally.

The US markets closed with marginal gains overnight on mixed economic news. The index of pending home resales rose 2% in December, more than forecast, after a 3.1% gain the previous month. A report from the Labor Department showed applications for jobless benefits increased by 51,000 to 454,000 in the week ended 22nd January. Besides, orders for durable goods fell 2.5%, weighed by volatility in demand for commercial aircraft, a report from the Commerce Department showed. Excluding transportation, bookings increased 0.5% after a 4.5% jump in November.

Among corporates, Qualcomm, Caterpillar Microsoft posted better-than-expected results, while AT&T and Proctor & Gamble disappointed.

The Dow gained 4.39 points (0.04%) at 11,989.83. The S&P 500 added 2.91 points (0.22%) at 1,299.54. It was the highest close since 28th August 2008, when it last finished above 1,300. The Nasdaq advanced 15.78 points (0.58%) at 2,755.28.

Markets in Asia were mostly lower in early trade this morning as a cut in Japan’s credit rating by Standard and Poor’s, which cited persistent deflation and political gridlock as reasons for the rating cut. Cautiousness ahead of earnings report from key heavyweights across the region also weighed on investors.

The Shanghai Composite declined 0.55%, the Hang Seng shed 0.07%, the KLSE Composite was down 0.29%, the Nikkei 225 fell 1%, the Straits Times declined 0.05% and the Seoul Composite lost 0.60%. On the other hand, the Taiwan Weighted gained 0.15%.

Meanwhile, the Indian economy is likely to grow by 8.7% annually and generate 3.75 crore jobs by 2020 on the back of investments in skills and infrastructure, a report by Accenture said.

Accenture, a global consulting firm, in its report released at the World Economic Forum at Davos added that four major economies—India, Germany, US and UK—together account for nearly two-fifths of the world economy.
 
It said that India’s economy would annually grow by “8.7%, compared to 8% expected currently; 37.5 million (3.75 crore) more jobs in 2020 than currently expected".

According to the Reserve Bank of India’s projections, the economy could record a growth of over 8.5% in the current fiscal, up from 7.4% in the 2009-10. During the first half of 2010-11 the economy recorded a growth rate of 8.9%.

 

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