Views on markets today
- Yesterday’s trading session can aptly be described as a tug-of-war between bulls and bears. There were several short rallies and corrections during the session. There were also a couple of rather major rallies and a major correction with the markets ending flattish. The a-d ratio on both exchanges was fairly tight, at 1.4 on NSE and 1.3 on BSE. Metals, PSUs and real estate were the only sectors which reported gains worth mentioning. Most other sectors were either moderately up or down.
- FIIs remained buyers on Wednesday as per Sebi data, while mutual funds were sellers of equities worth Rs166Cr. Asian markets are in the negative territory today.
- We expect lacklustre interest from investors today, on the weak Asian markets and also due to the fact that US markets will remain closed today. Investors may shy away from taking fresh positions ahead of the weekend.
Economic and Corporate Developments
- The rupee (INR) latest quote: 47.95 to the USD
- NYMEX Crude Oil (CL) is currently trading at 66.46 per barrel.
- According to the Economic Survey 2008-09, the automotive industry in India grew at a CAGR of 11.5% over the past five years. The industry, despite the economic downturn, managed a growth of 0.7% in FY09 with passenger car sales registered 1.31% growth while the commercial vehicles segment declined by 21.7%.
- ACC’s June cement shipments rose 1.1% y-o-y to 1.81mn tonnes, while production rose to 1.83mn tonnes from 1.75mn tonnes y-o-y.
Buzzing stocks
- GVK Power & Infrastructure plans to sell shares worth up to $150mn to institutions @ Rs41.35 per share.
- Punj Lloyd has bagged three contracts worth Rs1,873.18Cr from the Housing and Infrastructure Board of Libya for construction of roads, networks for drinking water, sewage water and electrical & communication infrastructure in three towns in Libya.
- Hindalco Industries has decided to raise around Rs24bn through a qualified institutional placement (QIP) of equity shares.
- Jai Balaji Industries plans to raise Rs450Cr through the issue of equity share to qualified institutional buyers (QIBs) on a private placement basis.
US markets
Disappointing jobs data overshadowed the encouraging orders data which prompted sellers to knock down stocks sharply lower, leading to a 2.6% decline in the overall US markets. This was the 3rd straight weekly loss for the US markets. Stocks were smacked down hard on surprisingly negative jobless numbers. The unemployment rate soared to 26 year highs indicating that the recovery may have stalled.
Economic news
June non-farm payrolls report indicated that 4.67lakh jobs were lost last month.
National unemployment rate now stands at 9.5%, less than the expected 9.6% decline; but it still marks a 25-year high. The White House expects unemployment rate to climb to 10% in next 2 to 3 months.
May factory orders made a surprisingly strong 1.2% increase, which defeated the 0.9% increase that had been forecast.
Average weekly hours came in at a slightly worse-than-expected 33.0. Since hours often lead payrolls and employers are cutting back hours suggests that hiring remains a long ways off, which will damper consumer spending and hopes of a consumer-led economic recovery.
The US markets are closed today in observance of their Independence Day.
