Morning Cues: After 6k, where is Nifty headed today?
In the US stocks kicked off the first trading day of 2013 with a sharp 2-percent rally across the board, with the S&P 500 and Nasdaq logging their best gains since December 2011, as wall street celebrated the last-minute budget deal by lawmakers to avert the "fiscal cliff " that would have pushed the economy into recession.
January 03, 2013 / 09:17 IST
US
In the US stocks kicked off the first trading day of 2013 with a sharp 2-percent rally across the board, with the S&P 500 and Nasdaq logging their best gains since December 2011, as wall street celebrated the last-minute budget deal by lawmakers to avert the "fiscal cliff " that would have pushed the economy into recession. The CBOE volatility index tumbled below 15.The new Congress get sworn in tonight and the next showdown can come in February if not sooner when the USD 16.4 trillion debt limit on government borrowing will need to be raised. Republicans are likely to use this deadline as a bargaining chip for greater spending cuts. It was the last debt ceiling fight back in 2011 that led to S&P downgrading the US to "AA+". No word from the S&P yet on the implications of this latest deal. In the meantime, Moody's says yesterday's deal will not meaningfully improve the US government's debt ratios. Moody's has a negative outlook on Washington’s triple A rating.On the economic data front, manufacturing activity expanded to 50.7 in December, rebounding from a contraction in the month prior. Meanwhile, construction spending dipped 0.3 percent to an annual rate of USD 866 billion in November. In key data to watch out for in the US today, weekly jobless claims are expected to rise to 363,000 and ADP private payroll employment for month of December is estimated to show a gain of 150,000.Europe A last-minute US budget deal sent European shares to 20-month highs on Wednesday, pushing some regional indexes into "overbought" territory and leaving them vulnerable to a pullback.Asia Meanwhile, Japan and China markets remain shut today.Key equity indices rose for the second consecutive session to finish at two-year highs Wednesday, as investors across the globe cheered the resolution of the US fiscal crisis. The Nifty closed at 5993, up 42 points after touching 6006 intra-day. This is the first time in two years that the index has topped the psychological 6000-mark. The Sensex closed 19714, up 133 points over the previous close.Currency In the currency space, the euro slipped below 1.32 to the dollar and the dollar index was at 79.90 levels.Commodities In commodities, Brent crude gained over a percent to USD 112 levels on US budget deal. From the precious metals space, gold rose nearly to USD 1694 an ounce and is currently at USD 1687 an ounce levels. New fiscal model for PSCSThe seven member panel led by C Rangarajan has recommended sweeping changes for India’s oil and gas sector, including a new fiscal model for production sharing contracts and a new gas pricing formula till 2018. Curbing gold importsCoinciding with the finance minister's announcement to put further curbs on gold imports, RBI released the draft report of the working group on gold. Discover the latest Business News, Sensex, and Nifty updates. Obtain Personal Finance insights, tax queries, and expert opinions on Moneycontrol or download the Moneycontrol App to stay updated!
