Sunday, some of the traders in the Europe to whom I spoke with were of the view that Mario Monti's new role as the PM of Italy would go well with the markets and he would definitely restore the investor confidence. The European futures indicated a positive open and the markets opened positive too. Once the 10 year Bond yields were inching up again above the 6.5% mark, the markets erased all the gains across Europe and the US futures slipped into red as well.Italy managed to sell Euro 3 Billion worth of 5 year Bonds but at the rate of 6.29% ,the highest rate since June 1997.The demand for the same increased to 1.47 times the amount on offer compared to the last month's demand of 1.34 in the previous auction.The rates were almost a percentage higher than they paid at the last auction.
EU Industrial production data for September came at 2.0% vs. Expectation of 2.3%. It fell at the fastest rate in two and a half years.
ECB borrowings by the Spanish Banks rose to EUR 76 Billion in October from EUR 69.3 Billion in September.
Germany , France and Turkey joined the likes of Nations like Syria and China in objecting to a military action against Iran(Read my last week's article on the possible military attack on Iran). Though the US and EU plan to impose another dose of sanctions on Iran,it is not going to affect Iran much ,as China ,Russia and Gulf nations continue their regular trades with Iran.India has lot of trade interests with Iran too.(Wikipedia says-A highway between Zaranj and Delaram (Zaranj-Delaram Highway) is being built with financial support from India. The Chabahar port has also been jointly financed by Iran and India). And most importantly India objected to further American sanctions on Iran in 2010.
US indices declined in the morning trade following the decline in European markets.And finally the Dow ended down by 74 points and the S&P ended down by 12 points(around a percentage).
Our indices which were trading in a tight range till noon started drifting down as the results of M&M was out and the fall accelerated when the European indices erased all their gains.SBI continues its southward journey.First it was the Moody's downgrade, then it was the results and the NPAs,now the exposure to KFA.I am sure even if the European indices remained in the positive territory, we would have drifted lower,yesterday.And TataMotprs profits were down by 16%.The company attributes this to the higher raw material cost, foreign currency loss and slow down in passenger vehicle sales in the domestic market.
Cairn India announced that it struck natural gas in the Sri Lanka's Mannar basin and it would take some time for the company to check whether it will be commercially viable.
Events to watch today-Greek T-bill auction and US manufacturing data.
Bloomberg survey says US data may be around 0.4% twice as much in September.
FTSE Fut is trading down by 12 points at 7 AM IST.
DOW fut is trading up be 22 points at 7 AM IST.
Hang Seng trades down by a percentage at 7 AM IST.
I expect Nifty to drift down to lower levels in today's trade.Book profits in short positions around noon or wait till European markets to open.Greek T-Bill auction would set the tone for the European markets.
Avoid overnight short positions as the Bloomberg survey says , the Manufacturing data in US may surprise positively.And a set of biggies like Staples,Wall Mart Stores,Agilent technologies,Dell,Home Depot and Autodesk are announcing their results today.
Enjoy the Day !!!
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