Moneycontrol Bureau
The US markets finished sharply higher as the Eurozone optimism helped boost investor confidence and following robust retail sales over the Thanksgiving weekend.
On data front, US retailers racked up a record USD 52 billion in sales over the Thanksgiving weekend, a 16.4% jump from a year ago. And new home sales edged up 1.3% in October to a seasonally adjusted 307,000-unit annual rate.
And in key data to watch out in US today, S&P Case-Shiller Home Price Index is expected to see a 0.1% decline. Also the consumer confidence may gain to 45.
Ratings agency Fitch maintains its AAA credit rating on US. However, they have lowered its outlook to "negative" from "stable" after congressional committee failed to agree on USD 1.2 trillion in deficit-reduction measures. They have also warned that they may cut the country AAA rating if policy makers fail to agree in 2013 on a plan to reduce the country's ballooning budget deficits.
And European markets also jumped, led by financials, as officials said Germany and France were exploring radical actions of securing deeper and more rapid fiscal integration among euro zone countries.
With Germany and France pushing for radical reforms to the region's financial stability pact. Germany's finance minister said that Berlin wants countries to set up funds to house debt exceeding EU limits of 60% of GDP as part of a drive to restore confidence in Europe's finances.
The global economic outlook looks increasingly bleak. The organisation for economic cooperation and development or OECD has revised down its forecast for global economic growth to 3.8% this year and 3.4% for 2012.
The OECD has warned that the Eurozone and UK could be entering a recession, as it sees the EU economy shrinking by 1% in the fourth quarter and 0.4% in the first quarter of 2012. The OECD has urged the European Central Bank of act decisively to prevent the debt crisis from getting worse.
The Paris-based think tank has cut US growth estimates significantly…it now expects the world's largest economy to grow by 2% in 2012, as against its earlier forecast of 3.1%.
And the chorus predicting economic pain is growing by the minute. Morgan Stanley has cut its forecast for 2012 global growth to 3.5% from 3.8%. The bank cited increasing risks from the Eurozone debt crisis and signs of bleak economic growth in US for the move.
This is the second time, Morgan Stanley has cut growth forecasts in just the last 4 months.
Japan's Nomura has cut its exposure to Italian government bonds and other Italian securities to USD 467 million from USD 2.82 billion in less than two months to reduce its risk in the region's debt crisis.
In the currency space, euro hold steady versus the dollar, currently at 1.33
Oil gains slightly with Brent above 108 dollar levels on Eurozone optimism and strong retail sales.
From precious metals space, gold holds firm above 1700 dollar levels
And back home, it was a blockbuster rally on Dalal Street -- Nifty gained 140 points to close above 4,850...Sensex surged 500 points.
ONTO SOME STOCK SPECIFIC ACTION
Retail companies will be in focus today as commerce minister Anand Sharma clarifies that FDI funded stores will have to mandatorily source 30% of their total procurement from Indian SMEs.
Reliance Industries initiated arbitration proceedings against the oil ministry over its plans to reverse the cost recovery at the kg-d6 fields.
And telecom secretary states that they will continue talks on spectrum price, M&A guidelines proposals. They hope to conclude discussion on TRAI proposals within one week. Telecom Commission may meet on December 1 on licence norms.
Onto the latest from 2G case, Kanimozhi gets bail from the Delhi High court after six months in jail along with 4 others – Asif Balwa, Karim Morani, Rajeev Aggarwal and Sharath Kumar also get bail. And today there will be bail plea hearing of Shahid balwa and RK Chandolia.
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