Asian markets have recovered from the sharp decline seen in the last three trading days on account of the earthquake in Japan on Friday
The Indian share markets are likely to open on a flat-to-positive note following a recovery in their Asian peers, which were trading mostly in the green in early trade on Wednesday brushing aside negative cues. However, cautiousness prevailed as another fire broke out at a Japanese nuclear power plant, sending low levels of radiation into Tokyo. Wall Street recovered from early losses, but closed in the red, on the Federal Reserve’s view that the US economy was on the recovery path. The SGX Nifty was up 36 points at 5,499 compared to its previous close of 5,463.
The local market opened with a sharp downward gap on Tuesday after Asian stocks were routed over the nuclear mess in Japan. At one point, Japanese stocks were down almost 14% and Hong Kong was down around 5%. But within half an hour of a weak opening, Indian stocks started moving up. From the low of the day of 17,921 and 5,374, the Sensex and Nifty rose all the way to 18,326 and 5,498.
However, in the late afternoon session, after the European markets went into a sharp decline and Dow futures was quoting down 250 points, Indian markets turned weak again. Indeed, given the rout that all markets around the world have suffered, the Sensex and Nifty have shown remarkable resilience. If the market does not break the recent lows, there is a chance it will move up. An upmove (or down move) of a large proportion (5-8%) is coming.
The US markets recovered from early losses after the Federal Open Market Committee asserted that the economic recovery was on a “firm footing”, adding that the labour market is also improving. Early losses came on news that Saudi Arabian troops moved into Bahrain with a regional force in the first cross-border intervention since uprisings swept through parts of the region.
The Dow declined 137.74 points (1.15%) to close at 11,855.42. The S&P 500 Index fell by 14.52 points (1.12%) at 1,281.87. The benchmark index fell more than 2% in early trading. The Nasdaq was down 33.64 points (1.25%) to settle at 2,667.33.
Markets in Asia were mostly in the green in early trade on Wednesday on hopes that Japan will recover from the disaster sooner-than-expected. Tokyo’s Nikkei share index rose more than 6% in early trade, recapturing about half of its heavy loss suffered the previous day. However, worries about corporate earnings outlook in the aftermath of the earthquake weighed on investors’ minds.
The Shanghai Composite rose 0.27%, the KLSE Composite gained 0.14%, the Nikkei 225 surged 4.37%, the Straits Times was up 0.37%, the Seoul Composite advanced 1.08% and the Taiwan Weighted was up 0.37%. However, the Hang Seng was 0.32% lower and the Jakarta Composite fell by 0.25% in early trade.
Back home, state-owned oil firms have hiked jet fuel prices by a massive 6%, the 11th rate increase in six months. The hike comes on the back of three consecutive massive hikes effected since February this year, when crude oil spiked to over $100 per barrel.
Aviation turbine fuel (ATF) rates in Delhi have been hiked by Rs3,377.09 per kilolitre (kl), or 6.14%, to Rs58,310.45 per kl with effect from 16th March, an official of Indian Oil Corporation, the nation’s largest fuel retailer, said.
Jet fuel will cost Rs59 031.39 per kl in Mumbai, home to the nation’s busiest airport, as against Rs55,500.06 per kl currently.
The hike is expected to hit airline stocks as fuel cost accounts for 40% of the airlines’ operating cost.