Feb 29, 2012, 09.46 AM | Source: Moneycontrol.com
A psychological game played out on Wall Street while back home, it was a smart pullback on D-Street. What's in store for the Nifty today? Read on for more...
A strong finish on Wall Street with the Dow closing above 13,000 for the first time since May 2008. The S&P 500 pierced the 1,370 level and rose above its March 2011 peak. Consumer confidence jumped to a one-year high in February, gaining to 70.8. However, durable goods orders slumped 4% in January, logging its biggest slide in almost three years. Also the S&P Case/Shiller Home Price Index slipped 3.8%.
Listen In: 10 stocks making news this morning
Dow up 0.2% at 13005.1
S&P up 0.3% at 1372.2
Nasdaq up 0.7% at 2986.8
Data to Watch
- US Q4 GDP: The GDP for the fourth quarter is expected to remain unchanged at 2.8 %.
- US Weekly Mortgage Applications: Watch out for weekly mortgage applications.
- Ben Bernanke speaks: And in key events Fed chairman Ben Bernanke will give the semi-annual testimony on monetary policy to US lawmakers.
European markets finished higher ahead of today’s liquidity injection by the ECB, which market participants hope will alleviate tensions in the European banking sector. Markets expect European banks to borrow about 500 billion euro (USD 670 billion) of cheap funds on offer from the ECB, although forecasts range from 200 billion to 750 billion euro.
DAX up 0.6%
CAC up 0.4%
FTSE up 0.2%
The ‘Greek’ Elephant
The International Swaps and Derivatives Association have been asked to rule on whether payouts on Greek credit default swaps should be triggered. This move came in after the Greek legislation passed collective action clauses for Greek debt which would cause all private debt holders to take a haircut once a certain percentage of the haircuts are hit.
The ECB temporarily suspended accepting Greek bonds as collateral by banks. After the S&P downgrade, Greece was widely expected to go into selective default. This move has raised criticism as to why regulators are not ahead of the curve. Eurozone leaders had agreed to use the EFSF as collateral. However, the facility is not expected to be in place until March. In the meantime, banks are asking their central banks for emergency assistance.
Among equities in Asia, Japan's Nikkei average retreated from Monday's seven-month highs to fall 0.6% as investors took profits. MSCI's broadest index of Asia Pacific shares ex Japan edged up 0.3%. The pan-Asia index rose 13 % this year, while Japanese equities gained 14%.
Taiwan up 1.3%; Nikkei up 1.1%
Kospi up 1.2%; Straits up 0.5%
Shanghai down 0.3%; Hang Seng down 0.1%
In the currency space, the euro held steady versus the dollar, above 1.34 ahead of the second round of LTROs. The dollar Index was down marginally at 78.21.
Crude prices declined, with Brent down nearly 2% at USD 121 per barrel levels on the back of weak durable goods data. WTI settled at USD 106.5 per barrel. Watch out for the EIA inventory report today.
And back home, the Nifty jumped 90 points to close around at 5,370 while the Sensex gained 285. Hopes ahead of the longer term refinancing operation (LTRO) announcement today helped our market arrest its slide.
According to a CNBC-TV18 poll, our third quarter GDP is expected to come in at 6.25%, dragged down by industry growth which may come in at 1.6%. However, services growth of around 9% will offer some respite.
Stocks to Watch
The Empowered Group of Ministers (EGoM) has sealed the deal on the much-awaited ONGC auction. The EGoM has given its go-ahead to auction off a 5% stake in ONGC on March 1. Its floor price has been set at Rs 290 per share.
Kingfisher Airlines’ lenders will meet today. The 18-bank consortium will take a final call on whether or not to extend a fresh line of funds to the debt-laden carrier. Vijay Mallya said that negotiations are on with investors for KFA. The Economic Times reports that Kingfisher is hoping for USD 500-600 million equity infusion.
The power ministry’s proposal to levy a 19% import duty on power project equipment is expected to be taken up by the Cabinet Committee of Economic Affairs this Thursday.
Orchid Chemicals has redeemed outstanding FCCBs worth USD 167 million.
TCS bags contract from South Africa's Nedgroup Insurance Company.
The government may cut the defence budget for the first time in recent years, reports the Times of India.
PSU refiners scale down crude imports from Iran, reports the Economic Times.
HDIL’s selling land parcel will clear over Rs 4000 crore debt, according to the Economic Times.
Essar Oil’s insurance claim of Rs 3013 crore has been declined by the tribunal, reports the Business Standard.
Orient Green Power is amongst bidders for DLF’s wind power assets, according to the Mint.
Videocon Industries, Bata India, Cambridge Solution, Federal Mogul, Kinetic Motors, MVL, Plethico Pharma.