Japan’s economy is shrinking, but it may limp back

The country's GDP shrank 0.3% in October-December from the previous quarter, but analysts expect a recovery this year due to exports to China and other Asian markets.

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Is silver poised for a breakout?

Demand is strong on the industrial side, where the increasing range of industrial applications is leading to very significant demand, which the silver market does not appear to be able to accommodate at current prices.

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Positive opening likely: Monday Market Preview

Easing of tensions in the Middle East is seen as a positive indicator for markets worldwide

The Indian market is likely to open in the positive on supportive global cues, continuing the pull-back rally that began on Friday. Wall Street closed with decent gains on Friday following the resignation of Egyptian president Hosni Mubarak. Price of oil and gold softened after the news, easing tensions about potential disruption in supplies of crude. Markets in Asia were trading higher in early trade on Monday, supported by easing of tensions in the Middle East and a less-than-expected decline in Japanese gross domestic product (GDP) for the December quarter. The SGX Nifty was 37.50 points higher at 5,350.50 compared to its previous close of 5,313.

The government t is expected to announce the wholesale price index (WPI) based inflation for the month of January later in the day, giving some direction to the market.

The market was down for the third week in a row and there was no respite for the bulls. However, for what it is worth, selling was considerably reduced in the last three trading days of the week and we can look forward to a slightly better week ahead-provided the week's low holds.

On Friday, we were expecting a weak rally to begin if the market held on to the low. The market did rally after making a new eight-month low of 17,296 on the Sensex and 5,178 on the Nifty. The Nifty was able to cross the previous day's high, pointing towards some sort of a revival in the week to come. The market declined 2% over the week. The Sensex fell 280 points to 17,729 while the Nifty lost 86 points to 5,310.

The US markets closed with decent gains on Friday following resignation of Egyptian president Hosni Mubarak. The news came as a relief as escalation of the situation would derail oil transportation through the Suez Canal. In economic news, US retail sales increased by 2.2% in the week ended 5th February after four straight declines, the International Council of Shopping Centers said. Besides, the Thomson Reuters/University of Michigan preliminary index of consumer sentiment for the month climbed to 75.1 from 74.2 in January, the highest level in eight months on decreasing unemployment figures.

The Dow gained 43.97 points (0.36%) at 12,273.26. The S&P 500 added 7.28 points (0.55%) at 1,329.15 and the Nasdaq rose 18.99 points (0.68%) at 2,809.44.

Positive developments in the Middle East over the weekend boosted the Asian pack, which was trading in the green in early trade on Monday. Erasing of prices of crude and gold prices after the news was announced also added support. Besides, a less-than expected decline in Japan’s GDP for the December quarter boosted stocks in Japan. GDP for the December quarter fell by 1.1% on an annual basis, against analysts forecast of a 2% fall. 

The Shanghai Composite surged 1.39%, the Hang Seng gained 0.68%, the Jakarta Composite advanced 0.71%, the KLSE Composite rose 0.56%, the Nikkei 225 was up 0.76%, the Straits Times gained 1.01%, the Seoul Composite jumped 1.64% and the Taiwan Weighted was up 0.84% in early trade.

Back home, former Reserve Bank of India (Rbi) deputy governor SS Tarapore said the “soft and calibrated monetary policy measures” taken by the central bank to tackle inflation have failed and has called for stern steps to tackle price rise, which has become a national crisis.

Warning that the government and RBI’s preoccupation with high growth at the cost of inflation will be counterproductive and disastrous, he called for “a proactive, forward-looking monetary policy” to ease inflation and not the baby-step measures as it has been recently doing.
 

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