Find Out: Will market remain volatile on F&O expiry day?
December, 29th 2011
Global Action It was a tumultuous session on Wall Street as it closed near its worst levels of the session. Renewed concerns over the situation in Europe weighed on global markets. The fall in euro added to the agitation as well. Closer home, our market is likely to remain volatile today as traders roll over their positions ahead of the Futures & Options expiry. US Markets
All the gains that US equities had been making in these last few sessions saw a reversal in low volume trade. The S&P was back in the red for the year, down 1.25% at 1249.6 while the NASDAQ declined 1.3%. Crucial Data to Watch Out For From the US
The weekly jobless claims numbers are expected to come out today. Consensus figures indicate that it may come up to 372,000. Also, the Chicago PMI Index comes out today. Business conditions are expected to decline month on month to 60.7 on the real estate front.
The pending home sales data for November is also expected later in the day. For more pre-market cues, listen to the accompanying audio..
European shares pared most of their gains and ended lower in trade yesterday. European financials remained under pressure as Barclays and Deutsche Bank lost 4% each respectively. Major indices DAX declined 2%; CAC fell 1% while the FTSE was down 0.1% as well.
Data showed that eurozone banks were still hoarding cash rather than lending it out to unnerved investors. An ECB report indicated that European banks deposited a record 452 billion euro and that the central bank's balance sheet had expanded to a record 2.73 trillion euro.
Italian Bond Auction
Italy's short-term debt costs halved at yesterday's auction as a new package of budget austerity and an injection of cheap long-term money from the European Central Bank (ECB) won some respite in thin year-end markets. The demand totaled 1.69 times the amount on offer.
Continuing the trend, Asian markets too opened lower on European jitters. All eyes will now be on the 8.5 billion euro longer-term bond auction in Italy after the successful sale of the short-term paper yesterday. Currency and Commodities
In other asset classes, the euro tumbled near a one-year low against the dollar after data showed eurozone banks were sitting on cash.
Crude tumbled nearly 2%. Oil prices fell and snapped six straight sessions of gains on account of the dollar's strength. Brent prices hit a low below its 300-day moving average of USD 107.78 a barrel. Prices still hover around USD 107 a barrel but volumes remained thin.
Gold tumbled 2% as prices of the yellow metal too hit a three-month low. Since July, this three-month low was triggered by the dollar rally against the euro, a technical sell-off and losses in US equity and commodity markets. Local Market
It was a weak session for our market. The nifty closed down nearly 1% at 4,705. On the home front, market regulator Sebi cracked the whip on seven recent IPOs, its biggest crackdown in five years. Those on the regulators radar include Bharatiya Global Infomedia, Tijaria Polypipes, Taksheel Solutions, RDB Rasayans, Onelife Capital Advisors, Brooks Laboratories and PG Electroplast. Three merchant banks were also punished. They are Almondz Global Securities and Atherstone Capital and PNB Investment Services. Competition in NRE deposits intensifies. ICICI Bank raised the interest rate for NRE deposits up to 9.25% with effect from today. Will other banks do the same?
DLF and its JV partner Hubtown have offloaded their entire stake in DLF Ackruti Info Parks in Pune to a real estate fund affiliated with the Blackstone Group for Rs 810 crore.
The GTL board will meet today to consider corporate debt restructuring. Yesterday, GTL closed up 8% while GTL Infra gained 5% yesterday ahead of this meet. Watch this stock closely.
Also the 3i Infotechs board has passed a resolution to seek corporate debt restructuring. In news from the automobile space, Tata Motors has cut the price of Aria under its 'anniversary offer.' Meanwhile Mahindra & Mahindra announced that it will increase the prices of its bestseller, the XUV500 by at least Rs 30,000-55,000 from January 1 due to high raw material costs and rupee depreciation.
On the political front, it's a crucial day for the UPA as the political drama over the Lokpal Bill shifts to the Rajya Sabha and it's going to be a battle for numbers.
Meanwhile Anna Hazare ended his fast on day two on the advice of his doctors. Anna also called off the 3-day 'jail bharo' movement that was to begin tomorrow. But his plans to tour all five poll-bound states remain unchanged.