Economic data and earnings reports lifted the US markets overnight, which in turn helped those in Asia edge higher in early trade today
The local market is expected to open higher, tracking positive global cues. Pushing aside the concerns related to the S&P’s downgrade of US credit outlook, the US markets closed in the green overnight on economic data and positive earnings reports. Markets in Asia, too, were relieved that the downgrade would not impact the economic recovery in the short-term, leading to a positive opening for the region’s bourses in early trade on Wednesday. The SGX Nifty was 31 points up at 5,791 compared to its previous close of 5,760.
The domestic stock market opened flat on negative global cues on Tuesday. The Sensex was unchanged in opening trade while the Nifty lost 13 points to 5,716. The market witnessed choppy trade through the entire session and slipped to the day's low at around 10.18am, as the Sensex breached the 19,000 mark to 18,976 and the Nifty fell below 5,700 to 5,693. A short while later, value picking in select stocks pulled up the indices into positive territory and the indices scaled their intra-day highs. At the day's high the Sensex gained 111 points to 19,202 and the Nifty rose 34 points at 5,763.
The market was range-bound till around 1.45pm, when a minor sell-off resulted in the indices dipping into the red. The indices continued to fluctuate, but closed with marginal gains, snapping the two-day losing streak. The Sensex advanced 31 points to end at 19,122 and the Nifty closed at 5,741, up 12 points over its previous close.
Wall Street closed higher as investors brushed aside concerns related to S&P’s downgrade of the US credit outlook. The markets were buoyed by economic news and earnings reports, which beat analysts’ expectations. The Commerce Department said housing starts rose 7.2% in March to a seasonally adjusted annual rate of 549,000 units. Figures for Februarys were revised up to a 512,000 unit pace from the previously reported rate of 479,000 units. Also, new building permits rose 11.2% to a 594,000-unit pace last month, rebounding from Februarys record low 534,000 units.
In the corporate arena, Johnson & Johnson rose 3.7% after it raised its profit outlook. The gains in the materials stocks came a day after Steel Dynamics forecast strong growth, lifting other steelmakers. The stock surged 5.7% while US Steel Corp climbed 4.5%. Offsetting the gains, Goldman Sachs Group Inc fell 1.2% after posting a steep decline in profit as trading revenue fell.
The Dow rose 65.16 points (0.53%) to settle at 12,266.75. The S&P 500 gained 7.48 points (0.57%) to 1,312.62 and the Nasdaq added 9.59 points (0.35%), to 2,744.97.
Positive sentiments emanating from the US lifted the markets in Asia in early trade on Wednesday. Gains in US technology stocks like Intel supported the rise in Japanese tech majors, Advantest, Ibiden and Tokyo Electron, which gained 2.5%, 7% and 3.8% respectively.
Meanwhile, Japan’s exports fell more than expected in March as shipments of automobiles declined in the wake of a record earthquake. Overseas shipments declined 2.2% from a year earlier, the first drop since November 2009, the finance ministry said in Tokyo today.
The Shanghai Composite gained 0.36%, the Hang Seng surged 0.83%, the Jakarta Composite rose 0.37%, the KLSE Composite 0.49%, the Nikkei 225 jumped 1.43%, the Straits Times advanced 0.25%, the Seoul Composite gained 1.80% and the Taiwan Weighted was up 1.26% in early trade.
Back home, the Insurance Regulatory and Development Authority (IRDA) on Tuesday relaxed accounting norms for insurance companies to take care of higher liability arising out of enhanced outgo towards gratuity for their employees. The regulator allowed the insurance and reinsurance companies to amortise (pay off in regular intervals) the additional liability on account of gratuity over a period of five years starting from financial year 2010-11.
The insurance regulator said these moves would lead to the increase in liability on account of gratuity which would in turn affect insurers' profitability.
Watch 19,250 on the Sensex and 5,770 on the Nifty for a possible reversal
As expected, the domestic stock market opened flat on negative global cues. The Sensex was unchanged in opening trade while the Nifty lost 13 points to 5,716. On Monday, Standard & Poor's downgraded the outlook for the United States to negative on concerns about the mounting fiscal problems and the US markets witnessed choppy trade through the entire session.
Today, the domestic markets slipped to the day's low at around 10.18am, as the Sensex breached the 19,000 mark to 18,976 and the Nifty fell below 5,700 to 5,693. A short while later, value picking in select stocks pulled up the indices into positive territory and the indices scaled their intra-day highs. At the day's high the Sensex gained 111 points to 19,202 and the Nifty rose 34 points at 5,763.
The market was range-bound till around 1.45pm, when a minor sell-off resulted in the indices dipping into the red. The indices continued to fluctuate, but closed with marginal gains, snapping the two-day losing streak. The Sensex advanced 31 points to end at 19,122 and the Nifty closed at 5,741, up 12 points over its previous close. The indices continued to make lower highs and lower lows for the second day. The advance-decline ratio on the National Stock Exchange was 663:734.
The broader indices outperformed the Sensex as the BSE Mid-cap index gained 0.36% and the BSE Small-cap index rising 0.29%.
In the sectoral space, BSE TECk (up 0.77%), BSE Oil & Gas (up 0.62%) and BSE Consumer Durables (up 0.52%) were the top gainers, whereas BSE Fast Moving Consumer Goods (down 0.89%), BSE Power (down 0.86%) and BSE Auto (down 0.39%) were the major losers.
Bharti Airtel (up 2.18%), Reliance Communications (up 2.08%), Larsen & Toubro (up 1.62%), HDFC Bank (up 1.40%) and TCS (up 1.32%) were the top performers on the Sensex. Hero Honda (down 4.64%), BHEL (down 2.37%), Hindustan Unilever (down 1.20%), ITC (down 1.05%) and Maruti Suzuki (down 0.82%) ended at the bottom of the index.
In a move that will enable foreign governments to make more investments in Indian stocks, capital market regulator Securities and Exchange Board of India (SEBI) has allowed them to buy to a maximum of 20% stake in any listed company without any additional obligations.
Among the major countries to benefit from the move is Singapore, whose investment arms Temasek and GIC have invested heavily in Indian companies and often face problems in buying shares beyond existing limits.
The downgrade of the US credit outlook by S&P impacted trading sentiment across Asia, with markets in the region settling lower. The Seoul Composite was weighed by reports that steelmaker Posco had hiked product prices. Commodity-related stocks fell on easing crude prices.
The Shanghai Composite tumbled 1.87%, the Hang Seng tanked 1.30%, the KLSE Composite fell 0.42%, the Nikkei 225 declined 1.21%, Straits Times fell 0.60%, the Seoul Composite slipped 0.70% and the Taiwan Weighted was down 0.87%.
Back home, foreign institutional investors were net sellers of stocks worth Rs981.56 crore on Monday, while domestic institutional investors were net buyers of shares worth Rs661.47 crore.
JK Tyre & Industries (up 0.05%) today said it will foray into the power sector with plans to set up a 1,360-MW power plant near Jhansi in Madhya Pradesh. It will make an initial investment of Rs1,300 crore.
Western India Shipyard (up 4.06%) has said that the company has signed a repair order with Aban Offshore for repair of ABN II, a large jack-up oil rig operating at depths of about 300 meters, at an estimated value of about of Rs60 crore.
The scope of repairs will include steel renewal, pipe renewal, paint protection, supply of various machinery and equipment which will be taken up after detailed inspection and assessment on arrival of the rig in the shipyard.
Pharma major Wockhardt (up 5.08%) has received final approval from the US health regulator to sell its generic Venlafaxine Hydrochloride capsules used for treating depression in the American market.
The final approval by the United States Food and Drug Administration (USFDA) is for Venlafaxine Hydrochloride extended release capsules in strengths of 37.5 mg, 75 mg and 150 mg, the drug firm said in a filing to the Bombay Stock Exchange (BSE).
The country's total merchandise trade has almost touched $600 billion-half of India's gross domestic product (GDP) of $1.2 trillion
New Delhi: India's exports registered the highest ever growth of 37.5% at $245.9 billion during 2010-11, demonstrating a robust demand for Indian merchandises not just in the western economies but in new markets like Latin America as well, reports PTI.
Exports for March rose by a handsome 43.9% to $29.1 billion compared to the growth in the same month in the previous financial year.
"This is the highest annual percentage growth (in a financial year)," commerce and industry minister Anand Sharma said after releasing the trade data.
The stellar performance in exports has been made possible despite uncertainty in several European economies which are marred by debt crisis.
Imports on the other hand grew at a lesser pace of 21.5% despite increasing pressure on crude oil prices.
Imports for 2010-11 aggregated $350.3 billion, leaving a trade deficit of $104.4 billion.
Imports in March totalled $34.7 billion, up 17.3% year-on-year.
The country's total merchandise trade has almost touched $600 billion-half of India's gross domestic product (GDP) of $1.2 trillion.
Mr Sharma said while the government has not fixed any target for the current fiscal, "... we will continue to strive to increase it."
India aims to achieve merchandise exports of $450 billion by 2013-14.
Commerce secretary Rahul Khullar said imports figures may be revised upwards leading to a trade gap increasing to $110-115 billion.
The good show by exports has lessened worries on the current account deficit, which Mr Khullar said, is likely to be at $25-$35 billion.
Engineering goods grew 84.7% to $60 billion led the show, followed by petroleum products at $42.5 billion (up 50.5%).
Gems and jewellery grew 15.4% to $33.5 billion, drugs and pharmaceuticals 15% to $10.3 billion.
Mr Khullar said while there has been an improvement in demand in the US an even in EU, "my hunch is that export growth (also) came from new markets, particularly from Latin America."
Since the export growth had bottomed out in 2009-10, expansion in the last fiscal looked good under the low base impact.
However, "Even if this base effect was not there the export growth would have been around 30%," Mr Khullar said.
When asked if the growth rate is sustainable, he said it will be a "pipe-dream" given the global economic outlook.