Indian Stocks Market : Morning Update

Welcome to the second half of calendar year.

The Dow rose 152 points or 1.3% while the S&P gained 1.0% and the Nasdaq added 1.2% (Mission window dressing achieved).Asian stocks kicked off the new quarter with modest gains on Friday as positive economic data and a temporary solution to Greece’s debt crisis left investors buoyant.The Nikkei 225 is up 46 points or 0.48%,Hangseng Index is closed for a public holiday.The SGX Nifty is up 46 pts trading at 5698.

Pop quiz: Did Nifty finish higher or lower on the June quarter?

The simple assumption is lower, given the April-June period has been all about the Greek correction with overtones of the US “soft patch”. Not to mention that the Japanese tsunami occurred in March, meaning the June quarter has copped the brunt of the financial impact. And that the rate of growth in Chinese manufacturing slowed to almost flat in the period, according to the PMIs.

Date Spot Nifty Remark
1st Apr 5835 Start of the qtr
6th Apr 5945 High for the qtr
20th June 5195 Low of the qtr
30th June 5647 Close of the qtr

Well in actual fact the Nifty finished lower for the quarter, by 3.2%.But if you just take the five day rally we had in the indices from 20th june with a low of 5195, we have rallied 8.7% in just 10 days(most of the fund managers are caught sleeping). It also highlights the fact that this latest Greek correction was a comparatively languid one compared to those occurring last year.

Last night the Greek parliament passed the implementation bill for its new aus terity package – the last hurdle. This means Greece survives for another month. The IMF will again audit progress after July and make the assessment as to whether or not Greece has sufficiently complied and thus may have its next tranche of bail-out funds. With European officials set to decide soon on the 2012 bail-out fund, one presumes we will be going through this routine for at least another 18 months.

It is unlikely the process will be as tough as this month’s has been for at least a little while now that the new austerity package is set for implementation, but the problem has not gone away. It has just been “kicked down the road,” as the latest trendy catch-phrase suggests. Last night the German finance ministry announced that German banks were prepared to voluntarily extend the maturities of Greek sovereign bond holdings, which is another step towards avoiding actual default. For now.

The euro thus rallied once more, to over US$1.45, as traders set their sights on next week’s expected ECB rate rise. The US dollar index fell 0.4% to 74.38 and the INR added 0.38% to US closing at 44.69.

As stocks have rallied this week on Wall Street, bond prices have fallen. The end of QE2 also prompted a ceremonial selling of gold, down US$12.20 to US$1499.60/oz, to mark the end of the US dollar’s downward manipulation.

Silver was also trimmed by 0.5% but base metals mostly pushed higher once more, with copper up another 1% ahead of books-close. After its big rally on Wednesday night, Brent was flat last night at US$112.48/bbl while West Texas added US65c to US$95.42.

With Greece supposedly out of the way attention will return in the US to economic matters, beginning today with the global manufacturing PMI readings over the next 24 hours. Last night the Chicago PMI, which is seen as a precursor to the US national PMI, broke a three-month losing streak in jumping to 61.1 from 56.6 when economists had expected a fall to 55.0. This result would have added an extra boost to last night’s trade.

India’s Cabinet approved Vedanta Resources Plc’s plan to take control of Cairn Energy Plc’s local unit with conditions that may limit the London-based copper producer’s gains from the purchase.By approving Cairn merger,Indian Goverment is trying to clear its image of not been too much investor friendly mainly to the foreign ownership & setting the stage for ONGC follow public offer (FPO).

Before we get that far, it’s a long weekend in the US for Yankee Doodle Dandy and all that.Its a fourth of July weekend ,American Independence day.

Rollover Front:

Equity derivatives traders in India rolled over more positions to the July series on optimism the rally that lifted the S&P CNX Nifty Index to a two-month high may extend.

Rollovers in the Nifty futures were 64 percent yestarday compared with 58 percent in the previous series.

Securities in Ban Period: ABG Ship.

TGIF!!!!

Short URL:

Posted by Stocks Market on Jul 1 2011. Filed under Daily Update. You can follow any responses to this entry through the RSS 2.0. You can leave a response or trackback to this entry