Wednesday’s Market Preview: Range-bound opening likely
Moneylife Digital Team 01 December 2010

The local market is likely to see a range-bound opening today as the US markets closed weak overnight on fears that Portugal’s debt might come in for a downgrade. Markets in Asia were mostly soft in early trade this morning on continued anxiety over the Eurozone crisis and ahead of release of Chinese manufacturing output data, a key pointer of economic growth. The SGX Nifty was down 14 points at 5,876 against 5,890 on Tuesday.

Most auto companies will announce their sales numbers for November, guiding the sector today. Besides, realty stocks that have seen appreciable gains in the last two days are likely to see some offloading.

The market opened in the red on Tuesday, tracking its regional peers that were trading lower on concerns about the pace of the global recovery process. It traded in a narrow range till noon, with the strong gross domestic product (GDP) numbers for the second quarter giving the indices the much-needed boost, pushing them up into positive territory. Buying in the broader market in the post-noon session propelled the market further northwards to the day's high. The indices pared some gains but closed around half a percent higher. The Sensex closed 116.15 points (0.60%) up at 19,521.25 and the Nifty settled at 5,862.70, 32.70 points (0.56%) higher.

Markets in the US closed lower on Tuesday but off the day’s lows on nagging fears about the sovereign-debt crisis in Europe despite positive economic news. The S&P/Case-Shiller index of home values in 20 cities rose 0.6% in September from the same month in 2009, the smallest gain since January. The gauge fell 0.8% from the previous month after adjusting for seasonal variations, the biggest drop since April 2009. Besides, The Conference Board’s sentiment index increased to 54.1, topping analysts’ forecast. The Institute for Supply Management-Chicago Inc said its business gauge advanced to the highest since April.

The Dow declined 46.47 points (0.42%) to 11,006.02. The S&P 500 shed 7.21 points (0.61%) to 1,180.55. The Nasdaq fell 26.99 points (1.07%) to 2,498.23.

Markets in Asia were weak in early trade on lingering concerns about the global economy. The release of the Chinese manufacturing output data today also weighed on the investors. The development is expected to hold the key for a further review of the country’s monetary policy.

The Shanghai Composite declined 0.53%, the Hang Seng was down 0.49%, the KLSE Composite was fell 0.44%, the Nikkei 225 shed 0.05% and the Straits Times was down 0.46%. On the other hand, the Jakarta Composite surged 0.99%, the Seoul Composite added 0.23% and the Taiwan Weighted jumped 1.06%. The SGX Nifty was down 14 points at 5,876 against 5,890 on Tuesday.

The government will take a decision on permitting regular exports of sugar towards the end of December, following an assessment of total production of the sweetener in the 2010-11 crop year.

“Most sugar mills have not even commenced crushing operations and hence, the production review could not take place this month,” food and agriculture minister Sharad Pawar said.

The ministry has pegged sugar production in the 2010-11 sugar year (October-September) at 24.5 million tonnes, as against the annual domestic demand of 22.5-23 million tonnes. However, the industry has projected that production of the sweetener will touch 25.5 million tonnes this year.

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