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Week ended 02/4/2011 -- Market this week .


Import of inflation by most of the Emerging countries are spoiling the their markets all around the globe and this is causing some huge crash in some market like India, yes I am going to say it crash not correction. As I live in India I am seeing how much sentiments are effected by this crash.
Now payroll data, looks like whole world was expecting some magic from it, but it brings some disappointment as it was not up to the mark. 
Tension in Egypt not only costing them $310 million per day but it is effecting many other parts of the world and many other companies like Vodafone. So not only bad weather in Australia and US but also there are many ingredients which effect stock markets this week.



INDEX
4-Feb-11
28Jan-4Feb-11



DOW
12092
2.27%



FTSE
5997
1.92%



CAC
4047
1.12%



DAX
7216
1.60%



NIKKEI
10543
1.76%



HANG SENG
23908
1.23%



AUS
4862
1.84%



SHANGHAI
2798
1.67%



SENSEX
18008
-2.10%



BOVESPA
65269
-2.14%



RUSSIA
7270
2.53%



INDONESIA
3496
0.25%



KOSPI
2072
-1.66%



STRAITS
3211
-0.55%



THAI
984
0.30%



ARGENTINA
3631
1.33%



S. AFRICA
32902
4.30%



Developed markets are regaining its  strength  and some experts are saying that money is shifting from Emerging markets to developed markets on better economic news.
Dow Jones is making higher formation where Bovespa like other Emerging countries are making loss.
As I was telling about the shifting moneys, without Developed market there is another option that is quite open which is shifting moneys from big Emerging countries to small Emerging countries. I will consider Developed market when some better news will come from private employment rates and consumer spending, mortgage repayments and obviously the performance of medium level banks & housing data e.t.c. and you can’t judge on the basis of couple of months or 1 quarter data, these need to be a consistent for sometime. In this moment and not even in within couple of months there is any chance of betterment on these areas. And also there is some news that many people are not anymore looking for jobs as they are not finding that, so it will be wrong to predict that there is reduction in unemployment number. Though I don’t have much information  but I think what is going on now that is based on Govt. subsidy or whatever you say. Consumer sentiment that is the area that needed to be improved .
One thing worried me about US that for last few months and years they are suffering from lot of problems, their sentiment is down, people are not taking any risk in spite of that stock market indexes are going up like rocket. So I have lot of doubts about this movement of indexes. What I think all this buyings are only coming from big banks, and if I am not wrong they are just using taxpayers money to make profit in stock market, retail participation may be quite low. I know many people will be in same opinion with me.




Other markets




COMMODITY
4-Feb-11
28Jan-4Feb-11



GOLD (Feb)
1348
0.59%



OIL  (Mar)
89.03
-0.34%



COPPER (Mar)
457.95
4.72%





Oil made it’s up move may from last day of previous week but it is unable to pass 92. Tension in Egypt may be a big factor for oil’s movement.
I think oil is in middle portion now, it can move either direction. In the up side if it brakes  92-93 range it can go higher, on the other side if it brakes 89 rang it can do the opposite.

Tension in Egypt and inflation is not effecting much in Gold’s value. If it makes a move above 1370 then it can change it’s behavior. Chinese demand of gold and silver may influence the behavior of them in coming days. In this moment silver is quite hotter than gold, as I was reading somewhere that Chinese are buying lot of silver.




CURRENCY
4-Feb-11
28Jan-4Feb-11



EURO
1.357
-0.29%



AUD
1.013
1.91%



YEN
82.16
-0.06%



RUPEE
45.64
-0.21%



SWISS FRANC
0.954
1.27%



S.African RAND
7.232
0.82%



Brazilaian REAL
1.673
0.47%



Mexican PESO
11.98
1.80%



AUD is again making it’s move but it will be wrong to say now that it will carry it’s move unless it crosses 1.026 at the top.
EURO is facing some correction , so in this moment 1.428 look far for it touch, as tension increasing around the world Euro is facing some correction. Things could change if  there is change in interest rate in EU areas.



YIELDs
4-Feb-11
28Jan-4Feb-11



2-Year Treasury
0.745
36.19%



5-Year Treasury
2.26
18.01%



10-Year Treasury
3.633
9.32%



30-Year Treasury
4.727
4.39%



This week all the  Treasury yields have increased, improvement in equity market may be the cause. Increase in yields rate of 30-year treasury continues this week, it may again go for it’s last April high of 4.836%.





Coming week

In this moment Dow Jones is just moving up and up, reports are not bad ,look like sell-off in Emerging markets are bringing  new investments in US.  It is overbought to some extent in this level but it has still more scope to go up from here. As things are shaping in different part of the world I will not be strange if some corrections happen here .
Nikkei is taking time to beat 10600 level. Last two weeks were positive for Japanese market in spite of that it is getting hard to beat the level.
FTSE , DAX & CAC all are facing some up move, look like investor are getting more confidence on these markets than Emerging markets.
As I was telling that KOSPI is facing resistance at 2120 level, this week it fell from that level and in lower level it is facing support at 2070 level. If things become good it can again go to test the 2120 level.
Thai index is moving around the range of 960-990 level. But if things get bad it can go down up to 920 level though in 940 level it can get some minor support.
Indonesian market is making lower top and bottom like many other markets. For any substantial move in upside it needs to break 3550 level. In Indonesia rate was raised in Friday by 0.25% to 6.75% let see in coming week how it effects their market.
Brazil’s Bovespa is also facing sell-off. As I was telling in last week, Brazil gets support at 65000. Brazil like India is facing huge negative movements of the index and thing were really bad in past days in these countries.
Russian market crossed the level of 7220. Russia is quite decoupling from other Emerging markets . There is option for it to go more but next week is very crucial for it to test the higher levels.
 Let see Emerging market indexes in 2011.



INDEX
1JAN-4FEB-11


SHANGHAI
-1.41%


SENSEX
-12.19%


BOVESPA
-5.82%


RUSSIA
8.36%


INDONESIA
-5.59%


KOSPI
-1.02%


THAI
-4.65%


S. AFRICA
2.44



India is still correcting and Brazil & Indonesia also join with it in this week.
India as I told from few weeks that foreign institutions are selling in Indian market,  it became very violent from last week. It will be quite wrong to see the weekly percentage of loss . Actually these corrections make investors and traders very nervous, sentiment is very much down. For say in last day of this week foreign institutions have not sold much in spite of that there came some panic selling and on it the telecom scam and inflation are acting like fuel .Actually this down trend not comes in January it is going from November last year but now it becomes violent. Realty sectors is badly effected, in fact all the indexes are effected by this type of selling.
What I think if in coming week things go this way then we may see some long-term effect of it in Indian investor’s mind. As all around the corner there is a noise that more are coming, so people are not believing any improvements in recent times as oil price also heading high. Specially when the saving bank accounts are paying more than average rate, as rates are increased by most banks. So in this circumstances that person will be a fool who is going to take the risk in stock market than not investing in saving bank accounts where the rates are so high than normal time.

What I am thinking here that if in this position some correction happens in US index for some days then what will be it’s effect in countries like India, Thailand, brazil and Indonesia, as we can’t forget the fact that in US the index is also in very high level.
In this moment I think oil’s price is going to be a deciding factor. It will be very immature to think that oil price is going to effect only Emerging countries because we can’t forget that EU is also facing inflation. And if I am not wrong in US , there is an election due in next year. So it can be a cause of concern for Obama if oil price increases like this.


What worried me in this time is the redemption pressure those are coming to some of the Emerging market funds as such lot of moneys are withdrawing from these fund and this may be one of the cause of these sell-off that is going on in some Emerging countries.
Next week some big reports are due from US, like chain store sales, unemployment claim, consummer sentiment and US trade deficit e.t.c. These reports can indicate the future movements of stock market.
Correction or crash whatever it is, it does not matter, some stocks are now available in some Emerging countries at very cheap price, so for aggressive investor this may be a good time to buy.


NOTE :  Please see the disclaimer below this blog.



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