Stock Market Commentary

The US Stock Market is looking good so far. There were some roller coasters today. But they were expected and did not throw the Investors in hysterical panic attacks. The stock market fell 2% last week which to most people was not alarming at all. But there are possibilities of a further downfall in the stock market with the upsurging oil prices.

Weak tech and energy stocks held the growth of the market back big time. The Dow Jones Industrial Average was up by 40 points. The stability in oil prices gave the market a good head start. An increase in house-hold income established a strong foundation for the market. Increase in personal spending gave the stocks a slight push.

Among the small capital companies the shares of Medicis Pharmaceuticals reached a high point when the company struck a deal with Teva Pharmaceuticals. The shares PDL Biopharma also saw a high point when the company put an end to its dispute with Novartis. PDL made the truce by confirming to pay Novartis a certain amount. Shares of Auto parts maker Amerigon reached a shooting 12.4% followed by the company’s claim to buy WET Automotive systems. The shares of Royale Energy have doubled since last month. The stocks of Samson Oil and Gas, Parker Drilling, Kodiak Oil and Gas and BPG resources are also on a gaining front.

The Indian stock market today opened on a high note but faced a temporary ebb just prior to the budget speech. After the budget the market revived its upward pace. But the market faced another decline and the early gains of the day ultimately proved to be ineffectual. The NSE-Nifty closed higher by around 30 points. The Pharma sector did not get much attention in the budget and it closed on bitter-sweet note. Asian and European indices are not promising enough either.

Finance Minister Pranab Mukherjee reveals in the budget the Government’s plan to collect RS. 40,000 crore from disinvestment programme in 2011-2012. This news highlighted the position of the shares of public sector undertakings in the market. The government will spend 1.6 lakh crore in social projects, 17% more than last year. Mukherjee stated that the national economy is strong enough to bear any foreign insurgency.

The minimum alternate tax for heavy industries was increased by 50 basis points. This step took a huge toll on the Reliance HeavyWeight Industries. It fell 0.1% to 964.65 from the day’s high of Rs. 994. Reliance Industries is in talks with Japan’s Orix Corporation to strike a joint venture. Reliance will soon seal a deal with Uttar Pradesh government regarding purchase of power. ONGC has announced discoveries in Cambey, Krishna ad Godavari. This has given the shares of ONGC a boost.

Upsurges in oil price continue to trouble the stocks of automations. Ashok Layland, Bajaj Auto, Hero Honda Motors and Tata Motors went down between 0.53% and 2.36%. However, Maruti Suzuki India rose 3.07%.

Both US and Indian stock markets have given mixed outputs. Growth was balanced with decline. However, signs of further growth are evident.