The Indian markets witnessed a volatile trade in last session, though the close was flat but the markets never looked in confident condition. Today the start is likely to be good as the global cues are firm, though crude prices are still at the elevated levels and may continue putting pressure on the PSU oil marketing companies with government in no mood to free diesel prices soon. Commodity stocks are likely to make some recovery with report of Japan situation stabilizing. However there is not good news for the India Inc, an RBI analysis has said that rise in raw material cost and soaring salary bill eroded the profitability of India Inc during April-September period of the current financial year. Meanwhile the new banking licence hopefuls too may get disappointed as the new banking licences will be given only after the government vests more powers with the Reserve Bank of India to control the new entities. RBI had earlier brought out a discussion paper in August on licences to business houses and non-banking finance companies, and regulations to foster competition and has said it will look at the business plan for financial inclusion before granting a licence.
The US markets bounced back on Monday making a good start of the week some deals news along with ease in the Japanese crisis took the markets higher while the surge in crude prices led the energy stocks gain momentum. Most of the Asian markets have made a positive start and the Japanese markets after a day of break have surged by about 3 percent in the very early trade.
Back home, Indian benchmark indices staged a lackadaisical performance in Monday’s volatile trading session after remaining in a narrow band to finally settle flat and snap the second successive day below the crucial support levels of 5,400 and 18,000. The tepid close looked shoddier because of the fact that markets across the globe displayed energetic performance and rallied as Japan made progress in cooling nuclear reactors at a crippled plant, while energy stocks benefited from higher oil and commodity prices on escalating geopolitical tensions in the Libya and neighboring nations. Spiraling crude oil prices continued to play spoilsport for the local markets as intensifying air attack in Libya by the US and Allied forces and pro-democracy protests and clashes in Syria with government forces stoked the oil prices to uncomfortable levels. Massive selling by FIIs in the past couple of trading sessions along with risks of towering inflation and solidifying interest rates capped the upside chances for the frontline indices. Earlier on Dalal Street, the benchmark ricocheted by over 100 points in the opening trade on emergence of buying in fundamentally strong shares at lower levels, driven by a firming trend in other Asian bourses. However, the frontline indices immediately erased all the opening session gains and drifted into the red to touch the low point of the day. Selective buying in some undervalued shares thereafter helped the index claw back in to the green territory in the late morning session. After gyrating in a narrow band and trading in the green for some time, the frontline indices slipped back into the red as investors took profits off the table in the dying hours. Eventually, bourses settled below the crucial support levels for the second straight day and settled with marginal losses of less than a quarter percent. Finally, the BSE Sensex lost 39.76 points or 0.22% to settle at 17839.05 while the S&P CNX Nifty fell by 8.95 points or 0.17% to end at 5,364.75.
US markets soared on Monday and all the major indices were up by about one and a half percent on reports of that Japan's nuclear crisis was stabilizing the Nuclear Regulatory Commission said the situation at the Fukushima Dai-ichi plant appeared to be stabile it further said that containment at three of the plant’s six reactors was intact. Also there were some deals news that helped the markets gain strength, AT&T Inc. said it would buy rival T-Mobile USA for $39 billion, creating the largest US cellphone company, while Charles Schwab Corp. said it would buy online brokerage services provider OptionsXpress for $1 billion.
However, there was a disappointment from the economy front, the National Association of Realtors, an industry group said that sales of previously owned US homes fell unexpectedly sharply in February and prices fell to their lowest in nearly nine years. Sales fell 9.6 percent month over month to an annual rate of 4.88 million units, snapping three straight months of gains. The median home price dropped 5.2 percent in February from a year earlier to $156,100, the lowest since April 2002.
The Dow Jones industrial average surged by 178.01 points, or 1.50 percent, to 12,036.53. The S&P 500 index gained 19.18 points, or 1.50 percent, to 1,298.38, while the Nasdaq composite rose by 48.42 points, or 1.83 percent, to 2,692.09.
Crude prices once again resumed their gaining mood and ended up more than 1 percent on Monday as UN mandated air strikes in Libya and growing unrest in the Middle East sparked more worries about supply disruptions. Western forces launched a second wave of air strikes on Libya. Spreading unrest in the Middle East supported prices, but uncertainty about demand from the world’s No. 3 consumer Japan capped gains.
Meanwhile, Japan will allow the release of an additional 22 days worth of crude oil from privately held reserve aimed to ease energy shortages in northern Japan, which was devastated by a massive earthquake and tsunami on March 11.
Benchmark crude for April delivery settled at $102.33 a barrel, gaining $1.26, or 1.25 percent, after trading in a range of $101.66 to $103.35 on the New York Mercantile Exchange. In London, Brent crude for May delivery settled up by $1.03 or 0.9 percent at $114.96 a barrel on the ICE.
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