11 February 2011

You Should Know Before The Opening Bell

In the US markets, stocks ended mixed with the Dow ending its winning streak, closing fractionally lower after rising for eight straight sessions as hopes for a possible resolution to the political unrest in Egypt lifted equities off their intraday lows. For the most part, risk-sensitive asset markets held up.

In economic data

10 things you should know before the opening bell

* New claims for jobless benefits fell to their lowest level in 2.5 years down 36,000 to settle  at a seasonally adjusted 383,000.
* Wholesale inventories climbed 1% to their highest level in almost two years while sales rose much less than expected.
* Business inventories rose to USD 430.5 billion, the highest since January 2009.
* Foreclosures continued their upward climb in January surging 12%.
* The US treasury monthly budget report showed a January deficit of USD 49.8 billion versus $80.0 billion last month.

And in the day's economic data to watch out for:

* The US international trade gap in January is expected to rise to USD 40.5 b from USD 38.3
* The University of Michigan’s consumer sentiment index is expected to rise to 75.0 versus 74.2

European shares fell on Thursday, hit by some disppointing results from index heavyweights like Credit Suisse and by renewed sovereign debt concerns after Portugal's government bond spreads widened.

The US dollar fell to a 3-day low against the euro on Wednesday, after a strong treasury debt sale accelerated bearish sentiment in the wake of comments by Federal Reserve chairman Ben Bernanke that its bond buying program would continue.

Oil rose after Egyptian president Mubarak defied calls for his resignation, agreeing only to delegate some authority to his deputy, prompting concern supplies may be disrupted amid further unrest.

Gold fell to USD 1,363 an ounce as the precious metal remained under pressure from the firmer dollar and sharper risk appetite.

And back home, markets closed the session lower for the third consecutive day amid an extremely choppy trade yesterday led by banking and telecom heavyweights. The Nifty touched the 5200-mark during the day for the first time in eight months to end at 5,226 after trading in a tight range of 5210-5250 all day.

An important cue for the markets today will be the IIP data—CNBC-TV18 poll throws up a weak 1.69% versus the 2.7% in November and hugely down from the double digit growth until October.

The Cairn India top management in an analyst call last evening made it very clear that its board is not in a position to accept any of the pre-conditions laid down by the oil ministry for approving the deal with Vedanta.

Even Vedanta had earlier communicated to the oil ministry that it could not accept these pre-conditions as it would be against the interests of Cairn India shareholders, especially minority shareholders. Cairn India’s top boss Rahul Dhir in this concall clarified that though the company has nothing in writing from the government on these conditions. The board cannot concede to ONGC's claim that royalty at the Barmer oil fields is cost recoverable.

The follow on offer for SAIL, which was scheduled for February has now been pushed to March. CNBC-TV18 learns that this delay could be due to some issue with the bankers.

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