Markets to get a green start on the final day of the year

The US markets recouped all their last session losses on Thursday on reports that moving average for weekly jobless claims fell to three year low and the number of Americans signing contracts to purchase previously owned homes climbed a far-more-than forecast,however in Europe, Italy sold 7.02 billion euros of bonds, less than targeted.The Asian markets have made a jubilant start on positive economic reports from US which signaled that the world’s largest economy is weathering Europe’s debtcrisis.

Back home, December series futures and options expiry turned out to be an extremely disappointing affair for the Indian stock markets as the benchmarks capitulated to the unrelenting selling pressure amid extremely high volatility. The final day of the 2011’s last F&O series saw Indian benchmark indices complete a hat-trick of disappointing performances as the bourses once again closed only after collapsing by over a percentage point. The hefty sell-off since last three sessions has dragged the key indices below the psychological 4,650 (Nifty) and15,550 (Sensex) levels. Investors resorted to ruthless position squaring from the Oil & Gas, Capital Goods and the high beta Real Estate counters in the last half hour, ahead of the F&O series expiry. The ongoing depreciation in Asia’s worst performing currency - rupee remained another cause of concern for the market participants as weakening rupee multiplied investors’ worries and dampened the outlook for corporate earnings. Meanwhile, investors also overlooked India’s weekly food inflation numbers which plunged for seventh straight week and slipped to near six years low levels to 0.42% for the week ended Dec 17. The sharp moderation in weekly inflation numbers failed to lift investors’ morale despite hopes that the RBI may consider reducing policy rates in its next meet in January. On the BSE sectoral front, hefty profit booking was evident in the Oil & Gas index which topped the losers’ space with2.62% losses followed by Capital Goods and Realty indices which sank 2.39% and 1.66% respectively. On the flipside, the Metal and Healthcare pockets remained the only gainers with less than a quarter percent gains. On the F&O front,December series Nifty and Sensex got butchered by around 2% each. From the expiry perspective, market wide rollover of 63.21% was observed which was higher than the three month average of 61.26% while Nifty rollovers were at59.64%, higher than 3 month average of 55.77%. Finally, the BSE Sensex shaved off 183.92 points or 1.17% to settle at 15,543.93, while the S&P CNX Nifty plunged by 59.55 points or 1.27% to close at 4,646.25.

US markets moved higher on Thursday,recovering almost all its losses of previous session and all the major indices were up by around a percent after the Labor Department reported that US jobless claims came in at 381,000, up from 366,000 the prior week. But the four-week moving average fell to 375,000 last week, with fewer Americans filing for jobless benefits during the past month than at any time in the past three years.Also, the National Association of Realtors reported that the number of Americans signing contracts to purchase previously owned homes climbed a far-more-than forecast 7.3% in November.

The Dow Jones Industrial Average closedat 12,287.04, up 135.63 points, or 1.1 percent, the S&P 500 Index rose13.38 points, or 1.1 percent, to 1,263.02 and the Nasdaq Composite gained 23.76points, or 0.9 percent, to 2,613.74.

Crude oil futures made a bounceback on Thursday and closed higher as threats from Iran this week to halt supplies through the Strait of Hormuz, were tempered by news that Saudi Arabia might offset some loss of supplies. However, in early trade prices fell to session lows shortly after the government supply data showed US inventories unexpectedly climbed last week but later it got some support with developments related to recent tensions between Iran and the West.

The Energy Information Administration (EIA) reported on Thursday an unexpected increase of 3.9 million barrels in US supplies for the week ended Dec. 23. Motor gasoline supplies fell700,000 barrels, but distillate stocks increased by 1.2 million barrels in the latest week.

Benchmark crude for February delivery added 29 cents, 0.3%, to settle at $99.65 a barrel on the New York Mercantile Exchange. In London, Brent crude for February rose $0.21 to $107.77 a barrel on the ICE Futures exchange.