The market is likely to extend Wednesday's (23 December 2009) solid surge on firm Asian stocks. The S&P CNX Nifty futures for December 2009 expiry were trading 2.5 points lower in Singapore. The government will today unveil data on some wholesale price indices for the year through 12 December 2009 viz. the food price index, the primary articles index and the fuel price index
However, trading volumes are likely to take a hit today, 24 December 2009, as the market remains closed for four days in a row from Friday, 25 December 2009 to Monday, 28 December 2009. The market remains closed on Friday on account of Christmas. It remains closed on Monday, 28 December 2009 on account of Moharram.
The government will wait until the February 2010 budget to consider withdrawing some of the fiscal stimulus measures, Finance Minister said on Wednesday. Mukherjee said inflation and fiscal consolidation are major challenges in short to medium term. Growth outlook for the second half of FY 2010 looks better, he added. The finance minister said farm output must grow 4% for the economy to expand 9-10% annually. He said industrial production has started picking up. The finance minister said the economy can grow 7.75% in the fiscal year that ends in March 2010 (FY 2010).
The finance minister said sustaining higher growth remains a priority for the government. The government is open to making changes in the draft direct tax code, Mukherjee said. The draft code has proposed various reform measures, including cutting in corporate tax rate to 25% and streamlining tax laws.
Meanwhile, the latest data showed that corporate advance tax payments for the October-December 2009 quarter shot up sharply, suggesting a higher profit growth in corporate sector in the third quarter (October-December) of the current fiscal. Corporate advance tax payments for the quarter were up 44% to Rs 48,300 crore against a 3.7% decline in April-June quarter and a 14.7% increase in July-September quarter. The company-wise break-up of advance tax collection
suggests a broad-based recovery with automobiles, cement, metals and consumer goods, doing well.
Asian stocks were trading slightly higher today, 24 December 2009 on rise in commodity prices. Key benchmark indices in Hong Kong, South Korea, China, and Taiwan, were up by between 0.95% to 1.87%.
However, trading volumes are likely to take a hit today, 24 December 2009, as the market remains closed for four days in a row from Friday, 25 December 2009 to Monday, 28 December 2009. The market remains closed on Friday on account of Christmas. It remains closed on Monday, 28 December 2009 on account of Moharram.
The government will wait until the February 2010 budget to consider withdrawing some of the fiscal stimulus measures, Finance Minister said on Wednesday. Mukherjee said inflation and fiscal consolidation are major challenges in short to medium term. Growth outlook for the second half of FY 2010 looks better, he added. The finance minister said farm output must grow 4% for the economy to expand 9-10% annually. He said industrial production has started picking up. The finance minister said the economy can grow 7.75% in the fiscal year that ends in March 2010 (FY 2010).
The finance minister said sustaining higher growth remains a priority for the government. The government is open to making changes in the draft direct tax code, Mukherjee said. The draft code has proposed various reform measures, including cutting in corporate tax rate to 25% and streamlining tax laws.
Meanwhile, the latest data showed that corporate advance tax payments for the October-December 2009 quarter shot up sharply, suggesting a higher profit growth in corporate sector in the third quarter (October-December) of the current fiscal. Corporate advance tax payments for the quarter were up 44% to Rs 48,300 crore against a 3.7% decline in April-June quarter and a 14.7% increase in July-September quarter. The company-wise break-up of advance tax collection
suggests a broad-based recovery with automobiles, cement, metals and consumer goods, doing well.
Asian stocks were trading slightly higher today, 24 December 2009 on rise in commodity prices. Key benchmark indices in Hong Kong, South Korea, China, and Taiwan, were up by between 0.95% to 1.87%.
Wall street ended higher on Wednesday after a dull start with weaker dollar helping stocks stage a late comeback. The Dow Jones Industrial Average rose 1.51 points, or 0.01%, to 10,466.44. The Standard & Poor's 500 index rose 2.57 points, or 0.2%, to 1,120.59, while the Nasdaq Composite Index added 16.97 points, or 0.8%, to 2,269.64.
In key economic data, new home sales tumbled 11.3% in November 2009, raising the specter that previous positive signs in the industry were the result of government stimulus and not sustainable.
US Treasury Secretary Timothy Geithner said on Wednesday that the economy was recovering, but it may be some months yet before jobs are being created instead of lost. There were dramatically fewer job losses in November than expected, when employers cut payrolls by 11,000. But the unemployment rate still is 10 percent and Geithner said regaining positive job creation was vital for recovery.
Geithner said the financial crisis that began in late 2007, driving the country into a deep recession, had taken a heavy toll on Americans' optimism. But Geithner insisted that there were signs of a return of confidence and said that will help get the economy on to a sounder footing.
Closer home, key benchmark indices spurted on Wednesday after Finance Minister Pranab Mukherjee said that the economy can grow 7.75% in the fiscal year that ends in March 2010 (FY 2010). Higher advance tax payment by India Inc and firm global stocks, also underpinned sentiment. The BSE Sensex jumped 539.11 points or 3.23% to 17231.11, its highest closing since 17 October 2009. The S&P CNX Nifty rose 158.75 points or 3.18% to 5,144.60, its highest closing since 8 December 2009.
As per provisional data on NSE, foreign funds bought shares worth Rs 769.53 crore and domestic funds bought shares worth Rs 13.02 crore on Wednesday, 24 December 2009.
Mid-Day Report: Swissy and Loonie Soar in Quiet Markets
Markets are rather mixed in thin holiday trading today. Broad based strength is seen in Swissy and Loonie. EUR/CHF finished a rather brief consolidation and resumes recent fall to as low as 1.4879 so far. Canadian dollar also maintains recent strength and surges to new multi-month high against Aussie and Euro. October GDP report from Canada missed expectations slightly but the Loonie remains supported by extended recovery in crude oil as well as speculations that China and Russia may increase Canadian dollar in their reserve holdings. Dollar remains steady against Euro after personal income and spending came in slightly below expectations.
Personal spending in US grew 0.5% in Nov while income grew 0.4%. Both were below expectation of 0.5% and 0.3% respectively. Headline PCE rose 1.5% yoy versus consensus of 1.6%. Core PC was unchanged at 1.5% yoy. Canadian GDP rose 0.2% mom in October, below expectation of 0.3% mom. German Import price rose 0.4% mom, dropped -5% in November. New Zealand GDP released overnight rose 0.2% qoq in Q3, below expectation of 0.4% qoq.
The BOE's minutes for the meeting on December 9-10 unveiled that MPC members have voted unanimously (9-0) for maintaining the policy rate at 0.5% and the asset purchase program by 200B pounds. Policymakers acknowledged improvement in economic outlook and forecast that the country will return to grow in 4Q09. However, weaknesses including growth in money supply remain a drag. The committee will discuss about change in monetary policy in February, the month when the quarterly Inflation Report is published. 2 MPC members, Miles and Dale, voted against expanding the Asset Purchase Program by +25B pound to 200B pound in November. However, both of them opted for consensus and agreed to keep the program unchanged.
Looking at the dollar index, while upside moment continues to diminish with 4 hours MACD staying below signal line, further rise is still mildly in favor as long as 77.86 minor support holds. Current rally from 74.19 is still expected to extend to 38.2% retracement of 89.62 to 74.19 at 80.08. A break below 77.86 will suggest that a short term top is formed and bring some pull back, probably to 4 hours 55 EMA (now at 77.24) before rally resumption.
USD/CHF Mid-Day Outlook
Daily Pivots: (S1) 1.0452; (P) 1.0478; (R1) 1.0513; More
USD/CHF dips after failing to take out 1.5060 resistance. Consolidations from there is still in progress and deeper pull back to 4 hours 55 EMA (now at 1.0389) could be seen. But downside the current consolidations is expected to be contained well above 1.0175 resistance turned support and bring resumption of whole rise from 0.9916. Above 1.0506 will target medium term support turned resistance at 1.0590 next.
In the bigger picture, medium term fall from 1.1963 has completed with five waves down to 0.9916 already. Also, the three wave consolidation from 1.2296 should also be finished too. Current rise from 0.9916 is expected to extend further to medium term trend line resistance first (now at 1.1078). Sustained trading above the trend line will affirm the case that long term rise from 2008 low of 0.9634 is resuming for another high above 1.2296. On the downside however, a break of 0.9959 support will invalidate this bullish view and argue that medium term down trend in USD/CHF is still in progress for 0.9634 low.
Economic Indicators Update
GMT Ccy Events Actual Consensus Previous Revised
21:45 NZD GDP Q/Q Q3 0.20% 0.40% 0.10%
21:45 NZD GDP Y/Y Q3 -1.30% -1.30% -2.10%
07:00 EUR German Import Price Index M/M Nov 0.40% 0.30% 0.50%
07:00 EUR German Import Price Index Y/Y Nov -5% -5.20% -8.10%
09:30 GBP BoE Meeting Minutes 0--0--9 0--0--9 0--0--9
09:30 GBP Index of Services 3M/3M Oct -0.20% 0.30% -0.10% -0.20%
13:30 CAD GDP M/M Oct 0.20% 0.30% 0.40%
13:30 USD Personal Income Nov 0.40% 0.50% 0.20% 0.30%
13:30 USD Personal Spending Nov 0.50% 0.70% 0.70% 0.60%
13:30 USD PCE Deflator Y/Y Nov 1.50% 1.60% 0.20% 0.10%
13:30 USD PCE Core M/M Nov 0.00% 0.10% 0.20%
13:30 USD PCE Core Y/Y Nov 1.40% 1.50% 1.40%
15:00 USD New Home Sales M/M Nov 1.90% 6.20%
15:00 USD New Home Sales Nov 438K 430K
15:00 USD U. of Michigan Confidence Dec F 74 73.4
15:30 USD Crude Oil Inventories -1.5M -3.7M
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