The European markets and the US markets rallied on Friday on account of the news that the Italian PM would be stepping down,and the approval of the austerity measures by the Parliament.As expected the Italian PM stepped down on Saturday.The Italian 10 year bonds were trading at 6.48% well below the critical 7% levels.A couple of days(November 9th) back it was trading above 7.5% that would have pushed Italy into insolvency.After Silvio Berlusconi's announcement that he would resign once the austerity measures are passed,things seemed to settle down.The short selling ban which was supposed to expire on 11th November in Italy was extended till January 15th to limit the volatility in the market. FTSE MIB closed by almost 4% on Friday.
Economist Nouriel Roubini says, Italy's fiscal reforms will fail to borrow money from the markets at affordable rates which would increase the chance of a debt default and its exit from Euro zone. ECB Governing Council member Athanasios Orphanides said in an interview on Sunday,"A possible haircut of the Greek debt is unnecessary and it is harmful for Greece and for the euro area as a whole. I still hold this view."
After the 10 year bond yields of the world's third largest Bond Market(Italy) started trading above the 7% mark, the attention is shifted to Italy from Greece.The European Financial Stability Facility (EFSF) announced last week that it had sold €3bn 10-year bond to support Ireland.The shocking part of this bond sales is, to achieve the target the EFSF had spent more than € 100m to buy its own bonds.This comes at a time when the EFSF officials had spent weeks in traveling all over the world to persuade key investors(Read,China,Japan) to buy its bonds.This is going to set alarm bells ringing in the minds of the future buyers.
In our markets Sensex dropped 1% led by the dismal IIP numbers.KFA fell down by 9.63% on account of cancellation of flights led by the resignation of pilots in large numbers and the cash and carry method suggested by the oil marketing companies for the airliner at the airports.Top banks like ICICI and SBI which have over 5% stake in KFA , fell down by 3.99% and 3.52% respectively.
Events to watch today- Italian bond auction. EU Industrial production data for September.
As expected the Asian markets are trading in the positive territory today following the Friday's rally in US and European indices.
SGX Nifty is trading at 5260 at 07.05 AM IST.
FTSE futures is trading up by 15 pts at 07.05 AM IST.
Dow Futures is trading up by 53 pts at 07.05 AM IST.
Today is November 14th.Children's day.Buy chocolates for the kids in your neighborhood.And always remember,when you BUY something,have a STOP-LOSS.Ask the children to Brush(Stop loss-Read,Tooth decay) their teeth after having the chocolate.Have a meaningful day :)
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Monday, November 14, 2011
Friday, November 11, 2011
Market Report
We shall start the day with some good news.To have a clear understanding about today's article I advise you to read my previous article on Global Sell-off , before reading this.
Lucas Papademos(Former European Central Bank vice-president) has been named as Greece's new prime minister.He is not the member of the parliament and he would be heading an interim Government until the elections on February 2012.The formal swearing in ceremony to take place today.In Italy,Mario Monti is likely to replace Silvio Berlusconi.The effective interest rates in Italy came down below 7%(The reason for the big sell off on Wednesday was due to the Bond yields which was trading above 7%) after the expectations that Monti may replace the present PM. And in another good news, S&P says France's rating remains AAA with a stable outlook(On Monday, France announced an austerity package which would save €7 billion in 2012). Yesterday,Italy's bond auction successfully raised €5 billion.According to some traders from Europe,ECB was seen buying Italian bonds on 2 and 3 year maturities for significant amounts. Italian markets ended up by a percentage and all the European indices ended almost flat contrary to the Wednesday sell-off (Read my previous article on Global Sell-off).
In the US, jobless claims fell to a seven month's low and the DJIA ended up by almost a percentage.
Isle of Man loses S&P AAA rating.S&P in a statement said, "We consider external vulnerabilities and the lack of monetary flexibility as credit weaknesses for the Isle of Man".
China's foreign trade rose in October by 21.6% YoY but was 8.3% lower when compared to the month of September.And the exports rose by 15.9% in October YOY and was lower by 7.2% MoM. Daiwa Capital Markets Economist Kevin Lai on Bloomberg says, Hong Kong is already in recession.
Investment Veteran,Jim Rogers says, he is 100% sure the world will face another financial crash .He warned that ,"It was bad in 2002,was worse in 2008 and in 2012 or 2013 is going to be worse still-be careful."
And in a new survey by WSJ, Economists says, 66% Chance that the Euro Zone Will Fall Into Recession.Today the IMF's Deputy MD,David Lipton arrives in Rome to begin fiscal monitoring and € 2 Billion worth of Greek T-Bills mature today.As if this is not enough, a strong,shallow earth quake of Magnitude 5.2 hit Greece at 19.25 local time.A report suggests that the damages are minor.
Asian Markets are trading almost flat for the day.Bank of Korea leaves the base rate unchanged at 3.25%. The finance Ministry says they need a balance between growth and inflation.The Kospi is trading up by a percentage at 07:50 AM IST.
SGX Nifty is trading flat at 5166 at 07:50 AM IST.
FTSE futures is trading up by 30 pts and DOW futures is trading up by 13 pts at 07:50 AM IST.
Today, the European Indices may give a thumbs-up to the news of France retaining its AAA rating.
(To receive the Daily Market Report and Breaking news during market hours, in your inbox, type your email id in the box(Subscribe to Broker King) below the World Map in the blog and click Subscribe).
Lucas Papademos(Former European Central Bank vice-president) has been named as Greece's new prime minister.He is not the member of the parliament and he would be heading an interim Government until the elections on February 2012.The formal swearing in ceremony to take place today.In Italy,Mario Monti is likely to replace Silvio Berlusconi.The effective interest rates in Italy came down below 7%(The reason for the big sell off on Wednesday was due to the Bond yields which was trading above 7%) after the expectations that Monti may replace the present PM. And in another good news, S&P says France's rating remains AAA with a stable outlook(On Monday, France announced an austerity package which would save €7 billion in 2012). Yesterday,Italy's bond auction successfully raised €5 billion.According to some traders from Europe,ECB was seen buying Italian bonds on 2 and 3 year maturities for significant amounts. Italian markets ended up by a percentage and all the European indices ended almost flat contrary to the Wednesday sell-off (Read my previous article on Global Sell-off).
In the US, jobless claims fell to a seven month's low and the DJIA ended up by almost a percentage.
Isle of Man loses S&P AAA rating.S&P in a statement said, "We consider external vulnerabilities and the lack of monetary flexibility as credit weaknesses for the Isle of Man".
China's foreign trade rose in October by 21.6% YoY but was 8.3% lower when compared to the month of September.And the exports rose by 15.9% in October YOY and was lower by 7.2% MoM. Daiwa Capital Markets Economist Kevin Lai on Bloomberg says, Hong Kong is already in recession.
Investment Veteran,Jim Rogers says, he is 100% sure the world will face another financial crash .He warned that ,"It was bad in 2002,was worse in 2008 and in 2012 or 2013 is going to be worse still-be careful."
And in a new survey by WSJ, Economists says, 66% Chance that the Euro Zone Will Fall Into Recession.Today the IMF's Deputy MD,David Lipton arrives in Rome to begin fiscal monitoring and € 2 Billion worth of Greek T-Bills mature today.As if this is not enough, a strong,shallow earth quake of Magnitude 5.2 hit Greece at 19.25 local time.A report suggests that the damages are minor.
Asian Markets are trading almost flat for the day.Bank of Korea leaves the base rate unchanged at 3.25%. The finance Ministry says they need a balance between growth and inflation.The Kospi is trading up by a percentage at 07:50 AM IST.
SGX Nifty is trading flat at 5166 at 07:50 AM IST.
FTSE futures is trading up by 30 pts and DOW futures is trading up by 13 pts at 07:50 AM IST.
Today, the European Indices may give a thumbs-up to the news of France retaining its AAA rating.
(To receive the Daily Market Report and Breaking news during market hours, in your inbox, type your email id in the box(Subscribe to Broker King) below the World Map in the blog and click Subscribe).
Thursday, November 10, 2011
Global Sell-off
Hope everyone is enjoying the holiday.Am I enjoying the day?No.Hold on.I am not holding any open positions to worry about.The reason why I am not enjoying the day is I am getting bored.The compulsive trader in me doesn't like me sit idle and do nothing.The global sell off is something to be worried about now.The European indices ended down by almost 2%. The Italian Index is down by 3.78% .The Italian Bond yield was trading above the 7% mark though the PM of Italy had offered to resign.The higher borrowing cost is something which doesn't go well with the markets and with the economy too.Adding fuel to the fire ,Clearing house LCH.Clearnet SA raised the initial margin requirements of Italian Bonds.The changes come into effect from today and it will affect the margin calls from tomorrow. With $2.6 trillion in Government debt , it is going to be very difficult for Italy in the near future.
In the US , the markets ended negative sending the S&P 500 to its biggest decline since August 2011.All the US indices were down by more than 3%. Nikkei is trading down by 2.7% at 11.25 AM IST.The Japanese machinery orders fell more than expected in September due to rising Yen and the global turmoil.The exporters are facing huge pressure as the Yen is trading near the post WORLD WAR II highs against the Dollar.And in the domestic front Rupee hits 52 week low of 50.25 against the dollar. As in my yesterday's article I have mentioned, the European crisis is a big negative for our nation.The rising inflation,falling rupee,increase in imports of coal,crude oil,decline in exports as the demand from European nations are falling, we are in for a tough time looking forward.The trade deficit is not going to narrow anytime sooner as the foreign inflows are getting dried up.
We have bad news from all the directions.Deutsche Bank's Michael Spencer says,"The possibility that European banks might reduce their exposure to Asia as part of their recapitalisation effort is something that has to be taken seriously". This will affect nations like Vietnam, South Korea, Indonesia and India.If the European Banks are forced to cut back lending(Europe's banks account for two-thirds of the foreign lending to global emerging markets) it is going to be a tough time for us.Morgan Stanley says there would be around $500 Billion drop in lending to emerging markets.And a report on foreign exchange reserves of the emerging economies indicates that the Chinese foreign-exchange reserves fell by almost $61 Billion and the Indian reserves fell by almost $11 Billion.
Overall we are in a worst situation now than we were in 2008.The American mortgage crisis did not affect the emerging economies much.But this European crisis is triggering a bigger global turmoil and some of the domestic sectors like aviation and real estate sectors are facing a huge cash crunch now.Let us discuss about that in detail in another article.
Nifty is expected to open below 5200 tomorrow and we may breach 5000 in the immediate future and will drift down to 4900.
Enjoy the day.Happy Guru Nanak Jayanti To All our readers.
In the US , the markets ended negative sending the S&P 500 to its biggest decline since August 2011.All the US indices were down by more than 3%. Nikkei is trading down by 2.7% at 11.25 AM IST.The Japanese machinery orders fell more than expected in September due to rising Yen and the global turmoil.The exporters are facing huge pressure as the Yen is trading near the post WORLD WAR II highs against the Dollar.And in the domestic front Rupee hits 52 week low of 50.25 against the dollar. As in my yesterday's article I have mentioned, the European crisis is a big negative for our nation.The rising inflation,falling rupee,increase in imports of coal,crude oil,decline in exports as the demand from European nations are falling, we are in for a tough time looking forward.The trade deficit is not going to narrow anytime sooner as the foreign inflows are getting dried up.
We have bad news from all the directions.Deutsche Bank's Michael Spencer says,"The possibility that European banks might reduce their exposure to Asia as part of their recapitalisation effort is something that has to be taken seriously". This will affect nations like Vietnam, South Korea, Indonesia and India.If the European Banks are forced to cut back lending(Europe's banks account for two-thirds of the foreign lending to global emerging markets) it is going to be a tough time for us.Morgan Stanley says there would be around $500 Billion drop in lending to emerging markets.And a report on foreign exchange reserves of the emerging economies indicates that the Chinese foreign-exchange reserves fell by almost $61 Billion and the Indian reserves fell by almost $11 Billion.
Overall we are in a worst situation now than we were in 2008.The American mortgage crisis did not affect the emerging economies much.But this European crisis is triggering a bigger global turmoil and some of the domestic sectors like aviation and real estate sectors are facing a huge cash crunch now.Let us discuss about that in detail in another article.
Nifty is expected to open below 5200 tomorrow and we may breach 5000 in the immediate future and will drift down to 4900.
Enjoy the day.Happy Guru Nanak Jayanti To All our readers.
Wednesday, November 9, 2011
Alex sir's view on Markets.
The support for Nifty is at 5259 and 5233.The resistance is at 5340 and 5370.It is extremely difficult for Nifty to cross 5370 today.
ABB posted a good set of numbers and further up-move is likely in the stock.
Stocks to Watch- KEC International and SBI. Expect huge volatility in SBI ahead of the results.
ABB posted a good set of numbers and further up-move is likely in the stock.
Stocks to Watch- KEC International and SBI. Expect huge volatility in SBI ahead of the results.
Market Report
A day of huge volatility in Indian markets and US markets.We made a low of 5270 and bounced back in the second half.In US the markets went from positive territory to negative when Italy's PM won the budget vote.The results show that the PM is losing his majority.Out of the 630 seat parliament, 308 voted in favor and 321 did not vote and there were no votes against the budget.The markets rallied again when the President of Italy announced that the PM will resign once the austerity measures are taken.
The most awaited IAEA report was out yesterday and it confirms that Iran is trying to build a nuclear weapon since 2003 but lying about the same to the International community.The experiments were carried out in a secret , protective chamber built for the testing purpose 30 kilometers from Tehran.It sent lot of shock waves among those in Israel.The Israel's PM's office said that they are studying the report and will issue a statement later.From the markets point of view, it is a very important news which needs to be watched meticulously.
As I have mentioned in a previous article, any attack on Iran will send the crude prices higher.
The Chinese CPI is announced today and as expected it is at 5.5% compared to the same period a year ago.(Read my yesterday's article).
In the domestic front SBI is set to announce the results.SBI rallied yesterday anticipating a good result.
The retail traders in our markets to whom I spoke with is of the view that ,why our markets need to worry for the European crisis.It should affect only the companies which have business interest in the Eurozone nations.The answer to their question lies in the report on India's trade deficit.India's trade deficit widens in the month of October.Main reason being the weakening of Indian Rupee, decline in exports and the import of Coal and Crude at a time when the foreign fund flows are in a decline.Commerce secretary Rahul Khullar says,it is something to be worried about and at this rate we will clearly breach the $ 150 Billion mark.This is attributed to the global turmoil (Read,Eurozone crisis) because of which the fund flows are getting dried up.
Keep an eye on the International Crude prices as the IAEA report may be seriously taken by Israel and the USA.
Our markets may open positive tracking the global cues and the Asian Markets.Stay cautious in the second part of the day as, we have a trading holiday tomorrow.
FTSE futures is trading up by 55 points at 07.45 AM IST.
Dow futures is trading down by 10 points at 07.45 AM IST.
The most awaited IAEA report was out yesterday and it confirms that Iran is trying to build a nuclear weapon since 2003 but lying about the same to the International community.The experiments were carried out in a secret , protective chamber built for the testing purpose 30 kilometers from Tehran.It sent lot of shock waves among those in Israel.The Israel's PM's office said that they are studying the report and will issue a statement later.From the markets point of view, it is a very important news which needs to be watched meticulously.
As I have mentioned in a previous article, any attack on Iran will send the crude prices higher.
The Chinese CPI is announced today and as expected it is at 5.5% compared to the same period a year ago.(Read my yesterday's article).
In the domestic front SBI is set to announce the results.SBI rallied yesterday anticipating a good result.
The retail traders in our markets to whom I spoke with is of the view that ,why our markets need to worry for the European crisis.It should affect only the companies which have business interest in the Eurozone nations.The answer to their question lies in the report on India's trade deficit.India's trade deficit widens in the month of October.Main reason being the weakening of Indian Rupee, decline in exports and the import of Coal and Crude at a time when the foreign fund flows are in a decline.Commerce secretary Rahul Khullar says,it is something to be worried about and at this rate we will clearly breach the $ 150 Billion mark.This is attributed to the global turmoil (Read,Eurozone crisis) because of which the fund flows are getting dried up.
Keep an eye on the International Crude prices as the IAEA report may be seriously taken by Israel and the USA.
Our markets may open positive tracking the global cues and the Asian Markets.Stay cautious in the second part of the day as, we have a trading holiday tomorrow.
FTSE futures is trading up by 55 points at 07.45 AM IST.
Dow futures is trading down by 10 points at 07.45 AM IST.
Tuesday, November 8, 2011
Alex Sir's view on Stock Markets today.
In an exclusive Interview with Alex sir,he feels that Nifty's resistance for the day is 5337 and the support exists at 5264 and 5224.
The quarterly numbers of ONGC,Elder Pharma,Madras Cements are encouraging.
The quarterly numbers of ONGC,Elder Pharma,Madras Cements are encouraging.
Market Report
After Greece,the attention is now focused on Italy.It was high drama yesterday in the European Markets.During market hours there were rumors that Italian PM would step down and the FTSE MIB which was down by 2% rallied to 3% within no time.And the PM did not step down and the Italian parliament today votes on a 2010 budget account.The interesting fact is that on October 12th the Government lost the parliamentary vote on the same.To pass the bill 316 votes are needed in its favor.It is going to be very difficult with the PM losing his popularity and some MPs are revolting against him.If the PM loses the vote he has to call in for a confidence vote.If he does not get enough support and lose the confidence vote he has to meet the President to dissolve the Parliament and form a new Government,It is going to be Italy, this week.Wear your seat belts.
Kindly look at the Euro Zone's debt in 2011.
It is estimated that Italy's external debt is 2.6 Trillion dollars while that of Greece is 500 Billion Dollars.(1000 Billion is a Trillion and 1 Billion is 100 crores.1 Dollar is 49.19 Rupees as per yesterday's data).
Eurozone retail sales fall 0.7% MoM in September.The expectation was 0.1% MoM.German Industrial Production for the month of September falls 2.7% VS estimated drop of 0.9%.Greece is set to announce its new PM at the cabinet meeting today.
After a roller-coaster ride US markets ended positive.Dow Jones was up by 0.7% and NASDAQ was up by 0.34%.
China's October CPI which is set to be released tomorrow is expected to fall to 5.5%. The downward trend in inflation is expected to continue since the CPI reached 3 year highs in July.
SGX Nifty is trading at 5317 at 7 AM.Expect a flat opening in our Markets and Our markets may show huge volatility in the second half of the trading session.Italy's vote is a key trigger.
FTSE fut is up by 36 points at 7 AM
Dow Fut is down by 26 points at 7 AM.
Kindly look at the Euro Zone's debt in 2011.
It is estimated that Italy's external debt is 2.6 Trillion dollars while that of Greece is 500 Billion Dollars.(1000 Billion is a Trillion and 1 Billion is 100 crores.1 Dollar is 49.19 Rupees as per yesterday's data).
Eurozone retail sales fall 0.7% MoM in September.The expectation was 0.1% MoM.German Industrial Production for the month of September falls 2.7% VS estimated drop of 0.9%.Greece is set to announce its new PM at the cabinet meeting today.
After a roller-coaster ride US markets ended positive.Dow Jones was up by 0.7% and NASDAQ was up by 0.34%.
China's October CPI which is set to be released tomorrow is expected to fall to 5.5%. The downward trend in inflation is expected to continue since the CPI reached 3 year highs in July.
SGX Nifty is trading at 5317 at 7 AM.Expect a flat opening in our Markets and Our markets may show huge volatility in the second half of the trading session.Italy's vote is a key trigger.
FTSE fut is up by 36 points at 7 AM
Dow Fut is down by 26 points at 7 AM.
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