Low volumes, enjoy the music
Year's end is neither an end nor a beginning but a going on, with all the wisdom that experience can instill in us.
As we enter the last trading day of the year and get set to welcome 2008, the Indian market can look forward to much greater things. For today, the outlook is just fine, with the bulls in command of the situation, though traded volume might take a hit due to the holiday mood. Many global markets are shut and may not provide great signals. So, expect some choppiness as well during the day. The key indices will extend their gains but could run out of gas later in the day. It’s been a wonderful year so investors will have no regrets on how it ends.
The bulls will continue to dominate in 2008, though things might remain volatile amid a fragile external environment. The biggest threats and dangers will be further slowdown in the US and elsewhere in the world. A lot has been said and written about the "decoupling" theory wherein emerging markets such as India may not be hurt by a recession in the US. This may be partly right and partly misplaced. So, one has to keep oneself abreast with the latest developments in the global arena to take a call on the local market.
A sharper than expected slowdown in the global economy, led by the US, may have some negative implications for India, though eventually we may be able to overcome any temporary blips. For that to happen, India Inc. would need to continuously deliver the goods and so will the Government. With general elections scheduled for next year (unless there is a sudden course correction), expect some populist measures in the budget. No big bang reforms are expected with the Congress firmly on the backfoot. One will also have to keep a tab on interest rates movement, both globally and locally, besides the state of the Indian economy.
All in all, we are all set for an interesting new year ahead of us. The now well articulated long-term growth story will no doubt continue. At the same time, there will be a few challenges and hurdles that we will have to deal with effectively. Traders, investors and all the other participants will continue to benefit, as the current bull run enters a new phase.
Shares of Brigade Enterprises and eClerx will get listed today. Brigade Enterprises is likely to list in the band of Rs340-360, according to the grey market. It can touch Rs400 intraday. eClerx is likely to list in the band of Rs 410-420. It can touch Rs 435 intraday.
The Board of Advanta India will meet on January 2, to consider acquisitions. Cambridge Technology's Board has approved conditionally, the acquisition of Q-Soft Systems & Solutions, a managed services company in Bangalore. NovaGold Petro Resources' Board will meet on January 1, to consider the possibilities of diversification in various other business areas and a preferential / rights issue to meet future capex requirements.
Alok Industries has deferred the decision to consider a Preferential Allotment of Warrants to the Promoter Group and a Foreign Investor in more detail. Country Club has allocated 18,80,322 shares at Rs770 per share under the Qualified Institutional Placement (QIP).
US stock benchmarks closed nearly unchanged on Friday after yet another choppy session, as lingering worries about the ongoing housing sector mess and tight credit conditions dented hopes of a Santa Clause rally.
A bleak report on new home sales reminded Wall Street that the world's biggest economy is still not out of the woods as far as the meltdown in the housing sector is concerned. Financial shares led the fall after an initial spurt.
Citigroup, Bank of America and JPMorgan Chase erased early gains after a report showed that new-home sales fell to a 12-year low in November, indicating that the correction in the housing sector will continue to hurt economic growth in 2008.
The S&P 500 index added just 2 points, or 0.1%, to 1,478.49, extending its fifth consecutive annual advance. The Dow Jones Industrial Average rose 6 points, or 0.1%, to 13,365.87. The Nasdaq Composite Index fell 2 points, or 0.1%, to 2,674.46.
The S&P 500 lost 0.4% for the week, while the Dow slipped 0.6% and the Nasdaq dropped 0.7%.
For the year, the Dow is up 7.4% versus last year's almost 15% gain. In 2005, it had risen by 3.16%. The Nasdaq, on the other hand, is up more than 9% for the year. The S&P is on track for a yearly gain of 4.2%.
Market breadth was mixed on Wall Street. About the same number of stocks rose as fell on the New York Stock Exchange. Traded volume was once again subdued, in line with the trend through the week, as many market participants chose to take a long year-end break.
Stocks rallied at the opening bell on a report that top US banks could sell off some of their non-strategic assets to shore up their balance sheets amid the current crisis in the credit markets. But those gains proved to be short lived following the release of data on new home sales.
Key indices sank to session lows by mid-day but turned mixed by the day's close.
More housing data is expected in the US today. A report on existing home sales for November will be released. US financial markets will be closed on Tuesday for the New Year's Day holiday.
Asian markets were mostly higher this morning amid thin volumes, rising by 0.2% to 1%. Markets in Japan, China, Thailand and Philippines are closed on account of New Year holidays. The Pakistani stock market was expected to re-open in Karachi after a three-day state mourning following the assassination of former Prime Minister Benazir Bhutto, on Dec. 27. The Hang Seng in Hong Kong was up 203 points at 27,573 while the Taiex in Taiwan gained 38 points at 8435 and the Straits Times in Singapore added 22 points at 3467.
European shares ended a three-session winning streak on the last full trading session of 2007, as traders failed to find inspiration after gloomy economic data on both sides of the Atlantic and thin volumes. The pan-European Dow Jones Stoxx 600 index fell 0.2% to 364.39. The UK's FTSE 100 lost 0.3% to close at 6,676.90 and the French CAC-40 finished nearly flat at 5,627.25. The German DAX 30 ended a holiday-shortened trading session - its last of the year - with a gain of 0.4% to 8,067.32. Markets in London, Paris, Amsterdam and Brussels will have a half-session on Monday, while the German and Swiss stock market will be shut.
In the emerging markets, the Bovespa in Brazil rose 0.2% at 63,886 while the IPC index in Mexico gained 0.2% at 29,700. The RTS index in Russia ended almost unchanged at 2290 and the ISE National-30 index in Turkey advanced 0.7% at 70,755. |
