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Jul 12, 2012, 08.23 AM IST
The spotlight is on the two-day EU summit which kick starts today, hoping to ease the regions burgeoning debt crisis a little at least. Will our market play along and remain optimistic or is a fall on the cards? Read on for more...
The spotlight is on the two-day EU summit which kick starts today, hoping to ease the regions burgeoning debt crisis a little at least. Will our market play along and remain optimistic or is a fall on the cards?
US markets ended higher amidst thin trade boosted by better than expected data. But investors remained cautious ahead of the two-day EU summit beginning today.
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And encouraging news on the economic front as durable goods orders jumped 1.1% in May following a revised 0.2% decrease in April. This was much higher than analysts’ expectations. Pending home sales climbed 5.9% to 101.1, hitting a two-year high in May. Weekly mortgage applications dropped 7.1% last week.
In key data from the US, initial jobless claims are seen coming in slightly lower at 385,000 compared to 387,000 last week. Watch out for the final reading of the first quarter GDP data as well. The forecast is for a 1.9% reading.
European shares closed sharply higher, after US pending home sales matched a two-year high in May, giving rise to optimism that the housing market is setting itself up for a possible recovery.
On the eve of the EU summit, even though there are hopes for the framework for a banking union, analysts see very little coming out of it. The summit is expected to announce a stimulus package of nearly 130 billion euro in infrastructure bonds, regional aid funds and European investment bank loans.
On the issue of the euro bonds, German chancellor Angela Merkel has reiterated that she does not support a common euro bond.
Meanwhile, Spain’s Prime Minister Mariano Rajoy has called for urgent steps to help lower borrowing costs. The Spanish central bank has warned that the country's economic slowdown has intensified in the second quarter, consumer confidence dropped further and retail sales in April fell at the fastest pace on record.
Commodities & Currencies
In the commodity space, Brent crude rose to USD 93 a barrel as tighter North Sea supplies and strong US economic data offset concerns that a European summit would do little to solve the region's debt woes.
Gold futures also gained after trading flat for most of the day as investors held their bets in anticipation of news from the impending European Union summit.
The euro remained sluggish ahead of the impending summit of European leaders. The dollar index touched a two-week high at 82.69 but eventually stabilised to the 82.40 mark in Asia trade.
Our market continued to remain rangebound very much like yesterday. The only difference was that the market had a positive bias throughout the trade, circling over the 5,150-mark.
Stocks in News Today
In a CNBC-TV18 exclusive, we learn that HSBC which holds 4.7% in both YES Bank & Axis Bank will sell via its Mauritius arm through an accelerated book building route. The Axis block deal is said to be valued around USD 326-333 million for a 4.75% stake while the YES Bank block deal may be valued around USD 93- 98 million for a 4.75% stake.
Tata Motors has announced the closure of its Jamshedpur plant for three days. This announcement came after already closing its Pune plant for three days in June. The management has cited economic conditions as reasons for closure. The production cut taken amounts to 1,000-1,200 vehicles for three days.
And more news from the Tata stable- Tata Sons has upped its stake in Indian Hotels by 4.78%. With this, the Tata Sons' stake has increased to 24.36%.
JP Power’s OFS (offer for sale) will issue 2.9 crore shares at a floor price of Rs 33.5/share. The OFS issue opens on June 29.
Marg Karaikal Port attracts equity investment of Rs 130 crore (Their marketcap is Rs 316 crore).
Hindalco raises Rs 1500 crore via NCDs.
DoT plans to impose a Rs 600 crore fine on Reliance Communications , reports the Economic Times.
Bosch will temporarily shut today its Jaipur and Bangalore plant to prevent inventory pileup.
Ashok Leyland plans to introduce small goods carriers and expand abroad, reports Agencies.
Blackstone and KKR are eyeing a stake in the cement unit of Shriram Group, reports the Times of India.
Tags: markets, Nifty, Sensex, Indian equities, Indian markets, EU Summit, euro zone, euro zone debt crisis, dollar, rupee, crude oil, brent crude
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