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Benchmarks in the US made multi-year highs on Wednesday while the Asian pack was mixed in early trade on Thursday
The Indian market is likely to open sideways on mixed cues from Asia in early trade today on renewed concerns on the debt crisis in Europe while gains in the US markets overnight limited the losses. Wall Street settled higher on Wednesday with the Dow closing at its highest since June 2008. The SGX Nifty, after opening with minor gains, slipped into the red and was 6.50 points lower at 5,905.50 compared to its previous close of 5,912.
Both the Sensex and the Nifty ended in the negative yesterday. The Sensex opened slightly above Tuesday’s closing at 19,699 and the Nifty opened a touch below its previous close at 5,908. Within an hour of the opening, both the indices hit their intra-day high of 19,811 and 5,944 respectively (also the highest level since 10 January 2011). However, soon the market started losing strength and slipped below the previous closing levels. The market hit the intra-day low in the morning session itself. The Sensex dropped to 19,551 and the Nifty to 5,869. But the market recovered from the lows and the Sensex closed down at 19,612, down 75 points, and the Nifty at 5,892, 18 points down.
The indices are set for a positive journey, but with a definite pause. In the days ahead, the market will be determined by Q4 earnings and the guidance from companies.
Markets in the US closed at multi-year highs on Wednesday supported by gains in financial stocks and the buoyancy in technology stocks. President of the Atlanta Federal Reserve Bank, Dennis Lockhart’s statement that the Federal Reserve will complete its $600 billion bond-buying plan as scheduled at the end of June boosted investor sentiment.
Cisco shares rose 4.9% after its chief executive John Chambers asserted that the company had ‘lost its way’ and needed restructuring to restore credibility. Among other technology stocks, Hewlett-Packard rose 2.2% and Microsoft gained 1.4%.
High oil prices kept the markets under pressure throughout the session. London Brent crude rose to near two and half year highs to more than $122 a barrel and US light crude retreated slightly after trading above $108 a barrel.
The Dow gained 32.85 points ( 0.27%) to close at 12,426.75, its highest since 5 June 2008. The S&P 500 added 2.91 points (0.22%) to 1,335.54 and the Nasdaq rose 8.63 points (0.31%) to 2,799.82. Both benchmarks closed at their highest levels since 18th February.
Markets in Asia were mixed in early trade on Thursday on high crude prices while optimism in the US markets overnight lifted sentiments on some regional bourses. The Bank of Japan, which is meeting today, is expected to retain its monetary policy but warn of the severe damage to the economy from last month’s devastating earthquake. The central bank is expected to show its readiness to ease policy further even as other central banks ponder raising rates.
The Jakarta Composite was up 0.05%, the KLSE Composite gained 0.26% and the Nikkei 225 rose 0.57%. On the other hand, the Shanghai Composite was down 0.13%, the Hang Seng declined 0.31%, the Straits Times fell 0.35%, the Seoul Composite fell 0.56% and the Taiwan Weighted shed 0.11%.
Back home, in a move that is set to delay and possibly scuttle the biggest acquisition in India's energy sector, the Cabinet Committee on Economic Affairs (CCEA) yesterday referred Vedanta Resources $9.6 billion buyout of Cairn India to a ministerial panel.
The move followed differences in the Cabinet panel on whether London-listed mining group with no experience in oil should be given unconditional approval for buying a company that owns the nation’s largest onland oil fields or after attaching reasonable conditions.