US Markets Report, Bank Stress Test, Obama's 100 days of Presidency

U.S. Markets ended the week on the positive note with the Dow Jones Industrial Average closing at 8076:

Up 1.5% for the day, Down 0.68% for the week, Down 7.98% YTD

The Nasdaq or better known as Technology Index did fairly well in comparison closing at:

Up 2.55% for the day, Up 1.27% for the week, Up 7.44% YTD

The broad S&P500 Index closed at 866:

Up 1.68% for the day, Down 0.39% for the week, Down 4.10% YTD

This upcoming week there a lot of events which will influence the markets:

April 29: Marks the 100th day of President Obama's Presidency. A report card of sorts will be presented. Where market, american public as well as media from around the world will be scrutinizing the new president's policies and performance.

April 29: The GDP number or the rate of growth of american economy will be released on Wednesday.

April 29: The FED will give its Interest Rate decision

April 30: Personal Income and Spending information for the consumer for the month of April.

May 1: U.S. Auto makers report car sales for the month of April.

May 4: The Treasury Bank Stress Report is released.

There is far too much hype around this piece of information. It is not that a lot will be known at the end of day about the true health of each of the banks and it is well known that nearly all banks will get a clean report. But Wall Street has raised its expectations and there is much expectation which may lead to uncertainty and volatility in the market for this week. Banking stocks will be under the scanner and one can expect wild swings in the share prices.

How all this affects Indian Markets?

This is a short spread trading week with only 3 active trading days. There is expiry on wednesday the 29th which will be our last day of the week. Thursday and Friday markets will be closed. Elections results and speculations of who will form the next government will lead the market sentiment next week.

Over all I will be cautious in my moves this week.

-Tushar

stockezy.com

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Weekly support and resistance.

NIFTY has a support at 2790 and 2710 and a resistace at 2950 and 3025
Sensex has a support at 9100 and 8910 and resistance at 9540 and 9740

Do you know Zimbabwe rolls out 100 trillion Z$ notes !

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Best and Worst of 2008 for the Indian Stock Markets.

Nothing much fascinating this year for the Indian Stock Markets. In the third week of the year market saw a night mare. Except that we saw many stocks reaching their lifetime high in Jan first and second week. Third week onwards investors started loosing their money as there we two consecutive lower circuits on 21 and 22 on Indian Markets.

Since the peek of some 21K markets fell at 7800 odd and now are at 9K levels. It lost its shine as it looses 60% in not even a year.

Dalal Street turned into Halal Street.

I doubt if any one booked their full profits.

This year we saw both the phases of the stock markets – Bull Market (for 15 days odd) and rest of the year bear phase.

Just don’t forget – “Every thing which has gone up has to come down again”

Best of 2008	Worst of 2008
Many stocks making their life time highs.	Stocks seen making their 52 Week Lows.
Sensex also reached at a crucial level of 21K mark.	Sensex and Nifty have now touched their Oct 2005 lows.
N. Deal was passed.	Fight among govt. for N.Deal. BJP was against and Congress was for it.
Ranbaxy deal	Satyam and Maytas deal called off.
Tata JLR deal	Slump in GDP numbers from 9.1 to 6.5
SunPharma Deal	Inflation peeked at 12% odd.
Inflation started cooling since Nov.	Crude touched all time high of 147.27 $ a barrel.
Crude is now at 4 years low	Worst IIP data were seen.
Few co. posted good results despite of recession in world economy.	Terror attack on Mumbai.
Brack Obama became USA’s youngest President.	Terror attack on various other cities too in India.

There are many more things, but these are the once which I think are of immense importance.

Sectors which Outperformed.

I can say none of them all are in red.

The worst hit sectors.

Reality / Infrastructure.

Metals.

Auto.

Airline.

Stocks which declared good dividend.

Disa India declared 2000% dividend on a face value of Rs. 10

Colgate Palmolive declared 900% on a face value of Re. 1

Best Performing Mutual Funds of the year - Download File

People staying in Mumbai if you want to invest in Mutual Funds pls do contact here.

Happy New Year 2009.

Happy Investing!

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Markets may recover from next week

Technical analyst, Vishwas Agarwal, while commenting on the market said, ``From Monday or Tuesday onwards, market will start recovering for second and last round of current upmove. As this market will make next stop before January 14 and from there onwards, corporate results will start which are expected to be weak.``

``We have only around 10 working days to make money and exit from weak stock. 2,876 is the basic support and 2,976 is important to cross for a strong upmove. Overall market view is trade with stoploss only with no major big target for any upside in Nifty or any stock,`` added Agarwal. - MyIRIS

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Will markets rally till New Year?

We never needed it more: a Santa Claus rally. The big question is whether it will happen in 2008? Much like the Wall Street, history
Santa and stocks
says Indian stock markets tend to rally from Christmas Eve to the New Year's Day (or the first trading day of the New Year).

FIIs or mutual funds
or big investors may not be bullish but if Santa has his way, investors will have something nice to finish the year, which saw Sensex lose over 50% of its value.

If investors want some hope, they can take heart from the fact that from 2000 onwards the sensex has never given negative returns for this period, which falls within the Yuletide.

Santa Claus rallies are said to happen as people tend to consume more, invest for tax breaks and more importantly, pessimists stay on vacation during this week, say experts.

For the rally to happen in 2008, the start seems to be a little off the track with Sensex losing 240 point on Friday. But people haven't lost hope.

"An encore of 2003, 2004 or even 2006 could see Sensex gain anything between 3% and 6%. The sentiment not withstanding, we never know what markets might throw at us," an institutional head at a local brokerage said.

A rally at this point could be a possibility because downsides from slowdown and lesser profits in third quarter are already there in the prices to a certain extent, he said.

For a 6-7 day window that exists between Christmas Eve and the first trading of the New Year, Santa has made decent stops at the Indian stock markets. - ET

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What happned in Indian Markets this week ?

The Full week was dull almost every day we saw a red stroke or a downtrend but an excellent pulback of 464 points on SENSEX i.e 5.5%. on Friday.

The whole week markets were mainly down because of bad global cues.

Inflation in single digits thats cool.

Crude Oil sliped below 50$ before recovering. Thats also good.

The bad news is worlds second largest economy JAPAN slips in recession.

Germany went in recession last week.

And the same job cuts news continue to rule.

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Sensex surges over 300 pts on PM’s assurance.

The 30-share index, which opened higher by 160 points, surged further by 323.93 to 8,774.94 points despite weak global markets.

The benchmark Sensex soared by over 320 points in late morning trade on Friday after Prime Minister Manmohan Singh assured that country will sustain a growth rate of 8% despite the adverse impact of the global financial crisis.

The 30-share index, which opened higher by 160 points, surged further by 323.93 to 8,774.94 points despite weak global markets. The BSE barometer had tanked over 2,100 points in the last seven trading sessions.

The wide-based National Stock Exchange’s Nifty moved up by 95.25 points at 2,648.46 points.

“We have the ability to sustain a growth rate of about eight per cent. And we will do so,” the Prime Minister said at the Hindustan Times Leadership Summit here.

Marketmen said sentiment turned better after government data showed inflation declined by 0.08% to 8.90% during the week ended 8 November.

Country’s most valuable company Reliance Industries gained Rs19.40, or 1.83%, at Rs1,078, while ONGC stocks gained Rs24.50, or 3.77%, at Rs674.90 mainly contributed rise to the Sensex.

SBI stocks gained Rs26.75, or 2.45% at Rs1,119.30.

Other gainers were BHEL, Larsen and Toubro, Bharti Airtel, DLF Ltd, Grasim Industries, Maruti, Mahindra, Mahindra and Sterlite Industries. Tata Power and Tata Consultancy. - Mint

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Wall St strategists see S&P 500 gaining 20% before 2008 ends.

"US equities posted the steepest monthly loss in 21 years in October and $6 trillion was erased from US markets in 2008"
The hopes are still alive and people on wall street are predicting an up move of 205 in S&P 500.
If this moves up by 20% we may have up move over 25% in the same period.
The guys on wall street were more bullish at the start of the year, predicting that the index would end at a record 1,632 - But it didn't.
If this is true be prepared for Sensex to touch 12.5K by December end.
Further readings on Imint.

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Why Sensex dropped more than Dow?

The Sensex was hit much harder than Dow although the epicenter of the financial crisis was the US. Since January 2008, for instance, Sensex fell 58 per cent in rupee and 68 per cent in dollar terms; Dow Jones declined 33 per cent.

The Indian market experienced more than a ripple effect. There were hard financial realities that weighed the Sensex down.

First the Indian stocks were, to start with, over-valued. The P/E had climbed up in 2007 from 25 to 35 (2007 companies) which was not justified by the performance of the corporate sector.

In the quarter ending September 08 earnings declined 34 per cent although sales increased 38 per cent. The margins were under pressure because of the increase in raw material prices and the rate of interest.

Even before the US financial crisis came into the open with the take over of Bear Stearns by J. P. Morgan, 15 per cent was already sliced off from the Sensex.

Second, although most Indian banks did not invest in toxic securities (the root cause of the crisis) there was indirect impact through the FIIs. From net buyers they turned net sellers. FIIs were major investors and held about 25 per cent of the floating stock. In a shallow market FII disinvestment made a significant difference.

The sale of $13 billion of securities would amount to about 4 per cent of floating stock. The NYSE was spared similar disinvestment by foreign investors.

Third, the domestic institutional investors (DIIs) suffered liquidity crunch. The repatriation of the money from sale of shares by FIIs had to be covered by drawing down foreign exchange reserves with the RBI. The return of corresponding rupees soaked out liquidity.

This made it difficult for DIIs, including Mutual Funds and Non Banking Financial Companies, to make fresh investments.

There were consequently hardly any buyers in the market in the month of October when liquidity had absolutely dried up. Had the RBI replenished liquidity in time the drop in stock prices would have slowed down.

Fourth, funds were diverted from shares and even small savings schemes to bank deposits following the increase in the rate of interest. The growth of bank deposits which was 15 per cent at the beginning of the year rose to 20 per cent by the middle of September. Debt became far more attractive than equity

The ripple effect of the international financial crisis was thus exaggerated because of FII disinvestment and adverse domestic financial pressures.

The RBI did take the much needed measures, though late, to replenish liquidity and cut interest rate. It is therefore possible that the Sensex that fell fast may rise early even before the Dow.
Source: - Economic Times.

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