Markets to make a weak start tailing the Asian markets

The Indian markets witnessed a good day after a long time on Thursday and the benchmarks gathered gain of around one percent on the back of short covering due to F&O series expiry. Barring the consumer durables all the gauges moved higher, the sharp decline in inflation numbers too catalysed the gains.  Today, the start is likely to be soft-to-cautious as the Asian markets are mostly in red. All eyes will be on the European developments to take further cues. There will be buzz in the retail stocks as the government on Thursday allowed 51% foreign direct investment (FDI) in multi-brand retail as well as 100% FDI in single brand retail.  The cabinet also cleared the new companies bill that is aimed at overhauling corporate governance norms and that too will make impact on the markets. Among other things, it also proposes to tighten laws for raising money from the public. The Bill also seeks to prohibit any insider trading by company directors or key managerial personnel by treating such activities as a criminal offence. In other development, SEBI has reduced the minimum application amount for anchor investors from Rs 10 crore to Rs 5 crore, which will help smaller IPOs to sail through. The market regulator has also tightened norms related to issue of warrants, which are offered along with public or rights issues.  It has capped the tenure of such instruments and asked for greater disclosures on the same

The US markets remained closed for the ‘Thanksgiving Day’ holiday on Thursday, unable to give any cue to the other markets, however the European markets moved higher in last session on unexpected rise in German business confidence. It breaks a trend of four months of falling business confidence. The Asian markets have made a weak start and most of the indices are trading lower by over half a percent as European officials failed to soothe investor fears that the euro zone’s debt crisis could trigger a credit crunch. German Chancellor Angela Merkel again ruled out joint euro-area borrowing and an expanded role for the European Central Bank in fighting the crisis.

Back home, after a horrendous performance on Wednesday, Indian benchmark indices finally pull through a relief rally on the November series futures and options expiry day and surged a percent higher. The frontline indices kept languishing below the neutral line, almost through the day but the last leg of trade saw a reversal of sorts as sentiments suddenly turned sanguine and the key gauges swiftly started gathering a lot of traction. The key gauges even managed to climb beyond the psychological 15,850 (Sensex) and 4, 750 (Nifty) levels, thanks to the hefty covering of short positions in rate sensitive Automobile and Capital Goods counters which surged by about two and half a percent and lent support to recovery. Sentiments also got buttressed after India’s food inflation moderated sharply to single digit at 9.01% for the week ended November 12, its third straight week of decline. The drop in food inflation is likely to bring some relief to the government which took steps to remove supply bottlenecks and has forecasted that prices would ease from December. The NSE’s 50-share broadly followed index Nifty, went for a one percent rally and settled just above the psychological 4,750 support level while Bombay Stock Exchange’s Sensitive Index - Sensex garnered around one hundred fifty points to close above the psychological 15,850 mark. The broader markets too showed resilience and settled with notable gains. On the BSE sectoral front, hefty short covering was evident in the rate sensitive Auto index which topped the gainers space with 2.45% gains followed by Capital Goods and TECk indices which rose 2.31% and 1.74% respectively. On the flipside, the Consumer Durables pockets remained the only chink in the armor as it settled in the negative terrain with marginal losses. On the F&O front, November series Nifty and Sensex got brutally butchered by around 8% each. From the expiry perspective, market wide rollover of 58.6% was observed which was lower than the three month average of 62.44% while Nifty rollovers were at 52.57%, lower than 3 month average of 56.55%. Sectorally, the Capital Goods, Cement, Automobile and Metal counters witnessed high rollovers while stocks from the IT, Pharma and Telecom pockets observed relatively low rolls. Finally, the BSE Sensex surged by 158.52 points or 1.01% to settle at 15,858.49, while the S&P CNX Nifty soared by 50.00 points or 1.06% to close 4,756.45.

US markets remained closed on Thursday, November 24, 2011, on occasion of the 'Thanksgiving Day' holiday

Crude prices rose on Thursday, recovering from the previous day's losses, supported by strong winter fuel demand and turmoil in the Middle East. Though there was no floor trading for the NYMEX crude but in electronic trading it was up 37 cents at $96.55 a barrel. Trading volume remained thin as trade was closed for the Thanksgiving holiday. In London, ICE January Brent futures rose 63 cents to $107.65 a barrel.