Wednesday, 11 January 2012

Good Morning! Here are the top headlines...

US stocks climbed to a five-month high on Tuesday, led by materials stocks after an upbeat forecast by aluminum company Alcoa and strong gains in bank shares.

The Dow Jones industrial average gained 69.78 points, or 0.56 percent, to 12,462.47. The Standard & Poor's 500 Index rose 11.38 points, or 0.89 percent, to 1,292.08. The Nasdaq Composite Index climbed 25.94 points, or 0.97 percent, to 2,702.50.

The Dow and S&P 500 hit their highest intraday levels in five months. The S&P 500 close above 1,285.09 is the highest since the end of July and marked a breach of technical resistance, which could spur further gains.

German chancellor Angela Merkel is meeting IMF chief Christine Lagarde later today in Berlin to deal with the eurozone sovereign debt crisis.

Easing some concerns about Europe, Fitch said it does not expect to cut France's AAA credit rating this year, but countries under review such as Italy or Spain could be downgraded by one or two notches. Europe closed sharply higher with over 2 percent gains.

China's reported a drop in import growth triggering speculation that monetary easing is right around the corner adding to the worldwide stock rally.

Asia was firm in opening trade. The SGX Nifty suggests Indian markets will open flat after stellar rally in last trading session.

Shifting focus to commodities, tensions in Iran give a boost to oil prices with Brent above 113 dollar levels. Gold too surged over a percent to 1634 dollar levels.

In the currency space, the euro holds flat at around 1.27 to the dollar ahead of ECB policy meeting tomorrow and crucial debt auctions from Spain and Italy this week. The Indian currency rose to a 5-week high on the back of strong FII flows & the strength in the equity markets.

In stock specific news, 100 percent FDI in single brand retail becomes a reality. Also mandatory sourcing from SMEs will kick in once FDI crosses the 51 percent mark. Retail stocks will remain on buyer's radar in the short term.

The impression of bankers who met RBI officials ahead of credit policy hints RBI is comfortable with current liquidity and hopes of a CRR cut are dim. Rate sensitive stocks will remain in focus today.

A big blow for national carrier Air India as lenders refuse to convert loans into preference shares as they doubt the airline's capability to pay dividend on these shares.

GTL Infra Director Prakash Ranjalkar steps down.

Genus Power will consider restructuring proposal today. 

Riken Mehta

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