The strength of a nation is derived from the integrity of the home

Home is where the problem belongs

The strength of a nation is derived from the integrity of the home.
Bears feel at home again and the reasons are nothing new. Looks like again we are writing only global issues. But unless that is sorted, there is nothing much to write home about. We expect a lower opening today and much more volatility than yesterday. The US housing woes are far from over. Alan Greenspan says US housing market is a long way from bottoming out. Federal Reserve Chairman Ben Bernanke painted a bleak picture of the world's biggest economy. However, both Bernanke and Treasury Secretary Henry Paulson are confident that the US will be able to ward off a recession. But, former Fed chief Greenspan says the US economy is on the brink of recession. In fact he has warned that economic conditions would continue to deteriorate until housing prices stabilized.
So, seems like we are back to square one, with all the negative talk going around about the health of the US economy. We need not say more on what's going on in the US and elsewhere. But, the periodic bad news on the US and other developed economies will continue to cast its shadow on our market. As a result, we will see intermittent bouts of buying and selling amid reduced market-wide participation. It is tough for anybody to predict the market's direction in such a backdrop. It will be safe to say that in the near-term, the outlook remains uncertain while over the longer term, India will continue to be among the strongest emerging markets.
FIIs were net buyers of only Rs609.9mn (provisional) in the cash segment on Thursday. Local institutions were net buyers of Rs2.05bn. In the F&O segment, FIIs were net buyers of Rs29.7bn yesterday. FIIs were net buyers of Rs16.92bn in Index Futures and Rs4.75bn in single Stock Futures. On Wednesday, FIIs pumped in Rs3.49bn into the cash segment. Mutual Funds were net buyers of Rs77mn on the same day.
Most Asian markets are trading down this morning after Fed chief Bernanke's grim remarks about the state of the US economy, the region's largest export market. Banks and technology companies led the fall.
The Nikkei in Tokyo was down 202 points or 1.5% at 13,423 while the Hang Seng in Hong Kong slid 476 points or 2% to 23,545. The Kospi in Seoul dropped 17 points or 1% to 1680 while the Straits Times in Singapore was virtually flat at 3041.
The Shanghai Composite in China tumbled 92 points or 2% to 4459 and the Taiex in Taiwan was fell by just 20 points or 0.25% to 7845.
About six stocks fell for each that gained on MSCI's Asian benchmark, which dropped 1% to 142.72 at 10:01 a.m. in Tokyo. Declines trimmed the benchmark's first weekly gain this year to 1.4%.
US shares slipped on Thursday after Federal Reserve Chairman Ben Bernanke acknowledged that a steep slowdown is underway in the world's largest economy amid the ongoing turmoil in the housing and credit markets.
JPMorgan Chase, Bank of America and Citigroup led declines in 29 of 30 members of the S&P 500 Diversified Financials Index. Intel dropped for the first time in six days. All 10 industry groups in the S&P 500 declined, halting the market's longest rally of the year.
The S&P 500 dropped 18 points, or 1.3%, to 1,348.86. The Dow Jones Industrial Average slid 175 points, or 1.4%, to 12,376.98. The Nasdaq slumped 41 points, or 1.7%, to 2,332.54.
About five stocks declined for every one that rose on the New York Stock Exchange.
After the close, data networking provider Brocade Communications posted quarterly earnings that fell from a year ago but nonetheless topped forecasts.
Friday brings a host of economic reports, including the NY Empire State manufacturing report before the start of trade and the University of Michigan consumer sentiment report shortly after the start.
Bernanke told the Senate Banking Committee that the outlook for the US economy has worsened recently and that the risks to growth remain to the downside. The Fed chief also said that the prospects could improve later in the year and that the housing sector mess and a weak jobs market will hurt consumer spending.
Bernanke said that big banks could end up taking more writedowns due to the problems with bond insurers. Stocks tumbled in response, with financial, homebuilder and retail stocks leading the decline.
Treasury Secretary Henry Paulson argued that the US economy should be able to avoid a recession, due to the combination of monetary policy and the fiscal stimulus plan announced by the Bush government.
The December trade gap narrowed more than expected, causing the 2007 trade gap to drop for the first time in six years. The number of Americans filing new claims for unemployment fell more than expected last week. And home prices continued to plunge in the last quarter of 2007, posting the biggest quarterly drop ever recorded by the National Association of Realtors.
Treasury prices fell, raising the yield on the benchmark 10-year note to 3.8% from 3.72% late on Wednesday. The dollar fell versus the yen and euro. US light crude oil for March delivery rose $2.19 to settle at $94.46 a barrel in New York. COMEX gold for April delivery rose 60 cents to settle at $910.80 an ounce.
Stocks in Europe closed mixed. The pan-European Dow Jones Stoxx 600 index ended with a gain of 0.1% at 323.66. The French CAC-40 ended up 0.1% at 4,858.65, while the German DAX 30 closed 0.2% lower to 6,962.28 and the UK's FTSE 100 finished flat at 5,879.30.
In the emerging markets, the Bovespa in Brazil was down 1.2% at 61,818 while the IPC index in Mexico fell 0.6% to 29,138. The RTS index in Russia was up 1% at 2025 and the ISE National-30 index in Turkey gained 1.6% at 57,010.