Falls were led by crude oil refiners and petrochemical shares, as S-Oil, South Korea’s third-largest refiner, snapped a three-day winning streak to close 4.5 per cent lower while LG Chem fell 3.57 per cent.

The Korea Composite Stock Price Index (KOSPI) slid 1.04 per cent lower to close at 1,993.71 points on Friday, still good enough to post a sixth-straight winning week.

The Nikkei index at the Tokyo Stock Exchange fell 55.07 points to 8,947.17, after opening in positive territory. The Topix index of all first-section shares dipped 0.69 per cent, or 5.42 points, to 779.07.

Dealers had expected stocks to be aided by a relatively weaker yen, but Europe’s single currency came under pressure in later forex trade.

“The yen has regained some ground against the euro from earlier in the morning,” SMBC Nikko Securities general manager of equities Hiroichi Nishi told Dow Jones Newswires, adding investors were taking profits ahead of the weekend.

The euro stood at $1.3262 and 102.93 yen, down from $1.3286 and 103.20 yen.

The dollar bought 77.58 yen, also edging down from 77.68 yen.

“Selling is short-term after the index reached the 9,000 mark (earlier this week),” Investrust CEO Hiroyuki Fukunaga said.

Eurozone finance ministers on Thursday put off a decision on a new bailout to save Greece from bankruptcy, giving Athens less than a week to meet three conditions in return for the aid.

The deadline was set during talks between Greek Finance Minister Evangelos Venizelos and his 16 eurozone counterparts in Brussels.

On Thursday, the Dow Jones Industrial Average finished up 0.05 per cent, or 6.51 points, at 12,890.46.

The broad-based S&P 500 crept up 0.15 per cent, or 1.99 points, to 1,351.95, while the Nasdaq Composite gained 0.39 per cent, or 11.37 points, to 2,927.23.

In Tokyo many currency-sensitive exporters fell, with TDK off 1.71 per cent at 3,735 yen, Honda down 1.84 per cent at 2,770 yen and Canon 1.30 per cent lower at 3,415 yen.

According to analysts, the market is likely to consolidate near current levels after the sharp run-up. Lack of cues from global peers also dampened sentiments.

At 11:30 am; the Nifty was at 5412.70, up 0.35 points or 0.01 per cent. The broader index touched a high of 5427.75 and low of 5399.15 intraday.

The Bombay Stock Exchange’s Sensex was at 17858.82, up 28.07 points or 0.16 per cent. The 30-share index touched a high of 17890.11 and low of 17798.11 in trade so far.

“On the Daily chart, prices have taken support at the 5day EMA. This suggests of further upside. Broadly speaking, spot Nifty has not convincingly closed above the high of the bearish belt hold pattern formed on 7th Feb 2012. However, Nifty future after a 3-day of consolidation has given a breakout from the range, this suggests further upside.

In coming trading session, if spot Nifty trades above 5423 level then it is likely to test 5470 – 5520 levels. On the downside, 5334 – 5285 levels may act as support for the day. We reiterate our previous day view that stock specific activity is likely to continue but traders are advised to adopt cautious approach at higher levels,” said Arihant Capital Market report.

BSE Midcap Index was up 0.83 per cent and BSE Smallcap Index moved 0.95 per cent higher.

Amongst the sectoral indices, BSE Metal Index moved 1.16 per cent higher, BSE Auto Index gained 0.92 per cent and BSE Capital Goods Index moved 0.88 per cent higher. BSE IT Index was down 0.55 per cent and BSE Healthcare Index declined 0.02 per cent.

Cairn India (-1.99%), Siemens (-1.89%), Ambuja Cements (-1.68%), Maruti Suzuki (-1.50%) and Sterlite Industries (-1.31%) were the major Nifty losers.

Sesa Goa (4.49%), Tata Steel (4.14%), BPCL (3.75%), SAIL (2.53%), Punjab National Bank (1.84%) and ONGC (1.58%) were the major gainers.

Tata Steel posted consolidated net loss of Rs 687 crore quarter ended December 2012, as against net profit of Rs 949 crore in the same period last year. Consolidated net sales, was at Rs 32,964 crore during ind December 2012 quarter as compared to Rs 28,606 crore in the same period a year ago.

Market breadth was positive on the NSE with 921 gainers against 516 losers.

Foreign institutional investors continued with their buying spree in the Indian markets. As per provisional data, they bought equities worth Rs 1200.66 crore on Thursday. The FIIs have pumped in around Rs 7893 crore in the last seven sessions alone.

Greek political leaders clinched a deal on austerity measures and reforms needed for a second international bailout in two years, and a debt swap deal between Greece and its private bond holders was practically finalised.

But Eurogroup chairman Jean-Claude Juncker set three conditions, saying the Greek parliament must ratify the package, a further 325 million euros of spending cuts needs to be found, and political assurances must be given that the plan will be implemented.

The agreement, after weeks of wrangling over the terms of the 130 billion euro ($173 billion) bailout, at least removed the imminent risk of a hard default by Greece, which faces a major bond redemption on March 20.

MSCI’s broadest index of Asia Pacific shares outside Japan slid 1.4 percent, moving further away from a six-month high hit the day before, which lifted the index up nearly 14 percent this year.

European shares are likely to inch lower, with financial spreadbetters expecting Britain’s FTSE 100, Germany’s DAX and France’s CAC-40 to open down about 0.1-0.2 percent.

The euro was off a two-month high of $1.3322 reached on Thursday, trading down 0.2 percent at $1.3258.

“I don’t think anyone thinks it’s going to be a nice once-off, tidy solution to the challenge. It’s going to turn out to be the never-ending story and I think that’s kind of the way investors are looking at this now,” said Adrian Foster, head of financial markets research for Asia-Pacific at Rabobank International in Hong Kong.

“It’s getting harder and harder to agree terms with Greece unless there is a real signpost along the way to ensure that Greece is living up to that sort of commitment,” he said.

In Asia, China’s trade shrank in January from a year earlier, with factory shutdowns for Lunar New Year holidays exacerbating a slowdown in external demand that has turned Beijing to take steps to support the domestic sector.

Analysts cautioned that the data had been heavily skewed by the week-long holiday which fell in January this year and in February last year.

Japan’s Nikkei fell 0.5 percent after opening marginally higher. Hong Kong shares fell 0.9 percent, facing tough resistance at 21,000.

Industrial commodities, such as oil and copper, retreated from Thursday’s rally made on the news of a Greek deal, while gold steadied, as a firmer dollar was offset by support from accommodative monetary conditions worldwide.

U.S. crude oil fell 0.4 percent to $99.44 a barrel, after gaining $1.13 on Thursday. Brent crude also shed 0.4 percent from Thursday’s settlement at $118.59 a barrel, the highest close since July 22.

“Technically, Brent is over-stretched, and the current level is starting to have a significant negative effect on global economic growth,” said James Zhang at Standard Bank in a note. “Therefore, caution will be required when the current apparent wave of investment influx ends,” as early as next week, he said.

London copper dropped nearly 1 percent to $8,676 a tonne, retreating from levels not seen in nearly five months reached on Thursday.
London copper dropped nearly 1 percent to $8,676 a tonne, retreating from levels not seen in nearly five-months reached on Thursday.

Sceptisicm after deal

EU Economic and Monetary Affairs Commissioner Olli Rehn said a debt swap deal between Greece and its private bond holders was practically finalised.

But finance ministers of the 17-nation euro zone arriving for talks in Brussels raised pressure on Greece to convince global lenders of its commitment to deliver, warning there would be no immediate green light for the rescue package.

Barclays Capital said in a note that a subdued reaction in the forex market suggested much of the good news was already priced in, leaving the euro capped.

“The political brinksmanship up till the last minute-agreement once again revealed the degree of challenges the Greek government will face in its implementation,” it said.

The European Central Bank kept interest rates at a record low 1.0 percent on Thursday as widely expected. ECB President Mario Draghi was non-committal on whether the bank would participate in Greece’s debt restructuring, although he indicated that the bank could pass profits from its Greek bond holdings to euro zone countries.

Asian credit markets were also subdued early on Friday, with the spreads on the iTraxx Asia ex-Japan investment grade index

barely changed from Thursday. The news on the Greek deal spurred a rally in Italian, Spanish and Belgian bonds on Thursday, pushing 10-year Italian yields down to four-month lows around 5.48 percent

“After a lot of wrangling, Greek political parties have reached a deal on new austerity measures necessary to secure international aid and avert a default. But, the Greek parliament needs to ratify the economic reforms. The news was confirmed by ECB President Mario Draghi, who left interest rates unchanged. Investors will continue to keep close tabs on events out of the euro area (Greece in particular).

The Bank of England kept rates steady but expanded the size of its QE program. The US labour market conditions continue to improve ever so slightly. The opening today will be lower as Asian markets are mostly in the red. US stocks closed with slender gains as did their European counterparts.

December IIP print is seen between 2.5% to 3.5%. This is slower than November’s reading of 5.9%. However, the markets may not get swayed much as the IIP data generally has been quite erratic. Globally, equities have got off to a strong start in 2012. So, don’t be surprised if market players turn a little hesitant in pushing stocks much higher,” said IIFL report.

At 10:00 am; the Sensex was at 17826.75, down 4 points or 0.02 per cent. The 30-share index touched a high of 17888.59 and low of 17798.11 in trade so far.

The National Stock Exchange’s Nifty was at 5422.25, up 9.90 points or 0.18 per cent. The broader index touched a high of 5359.80 and low of 5341.15 intraday.

BSE Midcap Index was up 0.63 per cent and BSE Smallcap Index moved 0.84 per cent higher.

Amongst the sectoral indices, BSE Auto Index moved 0.85 per cent higher, BSE Metal Index gained 0.70 per cent and BSE Capital Goods Index moved 0.66 per cent higher. BSE Realty Index was down 1.06 per cent, BSE IT Index declined 0.56 per cent and BSE Bankex slipped 0.20 per cent.

Hindalco Industries (-1.35%), DLF (-1.35%), Maruti Suzuki (-1.15%), ICICI Bank (-0.78%) and Infosys Technologies (-0.77%) were the major Sensex losers.

Tata Steel (4.21%), Jindal Steel (1.72%), Tata Power (1.61%), Bajaj Auto (1.39%), Larsen & Toubro (1.07%) and M&M (0.78%) were the major gainers.

Tata Steel posted consolidated net loss of Rs 687 crore quarter ended December 2012, as against net profit of Rs 949 crore in the same period last year. Consolidated net sales, was at Rs 32,964 crore during ind December 2012 quarter as compared to Rs 28,606 crore in the same period a year ago.

Market breadth was positive on the BSE with 1483 gainers against 600losers.

Foreign institutional investors continued with their buying spree in the Indian markets. As per provisional data, they bought equities worth Rs 1200.66 crore on Thursday. The FIIs have pumped in around Rs 7893 crore in the last seven sessions alone.

Meanwhile, the Asian markets were witnessing a subdued session. Nikkei 225 was down 0.38 per cent, Hang Seng moved 0.59 per cent lower and Seoul Composite fell 1.18 per cent.

The benchmark Hang Seng Index fell 107.94 points to 20,910.52 on turnover of HK$45.32 billion ($5.84 billion).

But housing inflation declined, further bolstering sentiment in the sector following a move to support first-time home late on Tuesday, suggesting Beijing’s attempts at curbing property prices were seeing some success.

Strength in Chinese developers helped limit losses in Hong Kong, with the Hang Seng Index bouncing off intra-day lows, ending down 0.5 per cent at midday after briefly testing its 250-day moving average at about 21,023.

The China Enterprises Index fell 0.6 per cent, while the Shanghai Composite Index pared early losses to finish virtually unchanged, up 0.02 per cent to 2,347.9. The CSI300 Index was flat.

Shortly after markets opened, Beijing announced annual inflation in January had risen to 4.5 per cent, higher than a 4.1 per cent outlook from analysts polled by Reuters. Annual inflation marked a three-month high and rose for the first time in six months.

“I am not surprised to see inflation higher than expectations, the Chinese New Year seasonal effect is always tough to call. But this should delay any cut in bank reserve rate requirements,” said Hong Hao, a Beijing-based CICC global strategist, told Reuters.

The People’s Bank of China (PBOC) appears to be waiting for coordinated liquidity action from global central banks, possibly in late February, before moving to cut bank reserve requirements.

Agile Property jumped 7.3 per cent in Hong Kong. Shenzhen-listed China Vanke and Shanghai-listed Poly Real Estate, the top two developers by sales, gained 1.6 and 1.7 per cent, respectively.

With sentiment improving for a sector that is the biggest concern for many economists, risk appetite among mainland investors also improved. The CSI500 Index, a gauge for small- and medium-sized listings, jumped 1 per cent.

KEY DRAGS: CHINESE BANKS, RESOURCES

Driving the markets lower was the policy-sensitive Chinese banking sector. The mainland’s biggest lenders were among the top drags on the Shanghai Composite and the Hang Seng indices.

Industrial and Commercial Bank of China (ICBC) and China Construction Bank (CCB) each slipped 1.3 per cent in Hong Kong. ICBC lost 0.5 per cent in Shanghai.

Protracted Greek debt restructuring talks also weighed on HSBC Holdings Plc, Europe’s largest bank and the Hang Seng Index’s biggest component. It lost 0.8 per cent.

Resource stocks were also weak in Hong Kong. China oil majors, PetroChina Co Ltd and China Petroleum & Chemical Corp (Sinopec) each declined 0.6 per cent, trimming its recent outperformance.

Still, CICC’s Hong says these dips represent opportunities for investors to buy into growth-sensitive sectors. He favours the Chinese information technology, energy, material and insurance sectors.

On Thursday, Lenovo Group Ltd rose 1.8 per cent after posting third-quarter net profit that beat forecasts, although growth slowed for a third consecutive quarter for the world’s No.2 PC maker.

Trading in Alibaba.com Ltd shares was suspended, pending an announcement regarding its parent, Chinese e-commerce giant Alibaba Group, which is reportedly planning to buy back the 40 per cent stake in it held by Yahoo Inc.

Benchmark oil hovered below $99 per barrel while the dollar rose against the euro and the yen.

Japan’s Nikkei 225 index slipped 0.2 per cent to 9,002.12 after a government report showed a decline in machinery orders. South Korea’s Kospi fell 0.4 per cent to 1,996.51. Hong Kong’s Hang Seng lost 0.5 per cent to 20,910.52 and Australia’s S&P ASX/200 shed 0.3 per cent at 4,279.80.

Investor sentiment hit a hurdle after China released data showing consumer prices had risen 4.5 per cent in January over a year earlier, up from the previous month’s 4.1 per cent. Food prices jumped 10.5 per cent, driven by a 25 per cent gain in the cost of pork, the staple meat in China.

The People’s Bank of China eased lending curbs in December to promote growth in the slowing economy. But the unexpected jump in the cost of living could make the central bank wary of carrying out further steps to loosen credit.

“They will not be relaxing monetary supply anytime soon,” said Francis Lun, managing director of Lyncean Holdings in Hong Kong. “Actually that shows the economy, despite the various tightening measures, is still relatively strong.”

Elsewhere, Japan’s core machinery orders for December 2011 fell by 7.1 per cent on a seasonally adjusted basis, the Cabinet Office said. The figure, which excludes the volatile shipping and electric power industries, marked a downturn from a 14.8 per cent expansion in November.

Hitachi Construction Machinery lost 1.7 per cent, and construction machinery maker Komatsu shed 1.4 per cent.

Australia mining companies came under pressure a day after BHP Billiton Ltd., the world’s biggest miner, announced a 5.5 per cent drop in first-half profit. BHP shares fell 2 per cent.

Rio Tinto, another global mining giant, releases its full-year results after the market closes Thursday. Its shares were down 0.2 per cent. Iron ore producer Fortescue Metals Group fell 1.1 per cent. Paladin Energy, a uranium miner, dropped 1.9 per cent.

Investor enthusiasm was also held in check after a crucial meeting in Greece aimed at averting the country’s bankruptcy ended Thursday morning without definite results.

Still, Lun said there was confidence that a deal would be struck and that investors had become more relaxed, even about a negative outcome.

“I think a Greek default is a foregone conclusion. So if it happens, it won’t shock anybody,” he said.

Greece has been kept afloat for the last two years by (euro) 110 billion ($145 billion) in international rescue loans. But the money was not enough and a second loan is urgently needed to avert bankruptcy.
International lenders, however, have refused to approve more aid unless Greece learns to live within its means and implements a strict austerity program. Without an injection of emergency money – some (euro) 130 billion ($170 billion) is on the line – Greece will likely default on bond repayments due next month.

Wall Street staged an afternoon rally and closed higher Wednesday when it seemed that Greece was about to close in on a cost-cutting deal.

The Dow Jones industrial average rose marginally to close at 12,883.95. The Standard & Poor’s 500 index rose 0.2 per cent to 1,349.96. The Nasdaq composite index rose 0.4 per cent to 2,915.86.

Benchmark oil for March delivery was up 6 cents to $98.77 per barrel in electronic trading on the New York Mercantile Exchange. The contract rose 30 cents to end at $98.71 per barrel on the Nymex on Wednesday.

In currency trading, the euro fell to $1.3276 from $1.3288 late Wednesday in New York. The dollar rose to 77.17 yen from 77.01 yen.

Investors who seek the safety of treasury bonds will have minimal returns and will not be able to meet their needs with the US Fed expected to keep interest rates low, said Fink, who in 1988 co-founded the New York-based manager with $3.5 trillion of assets. By contrast, equities are trading at the lowest valuations in 20-30 years.

“I don’t have a view that the world is going to fall apart, so you need to take on more risk,” he said in an interview with Bloomberg Television in Hong Kong on Wednesday. “You need to overcome all this noise. When you look at dividend returns on equities versus bond yields, to me it’s a pretty easy decision to be heavily in equities.”

The FOMC last month pledged they would keep borrowing costs low through at least late 2014 to boost the economy and put more Americans back to work, extending a previous end date of mid-2013. Investors pulled money from MFss that buy US stocks for a fifth year in 2011, the longest streak in data going back to 1984, according to the Investment Company Institute in Washington.

“The market is again turning as unpredictable as the weather even as it consolidates after a spectacular rally. The trend is likely to continue today as well as the Greek debt drama drags on and data shows faster-than-expected inflation in China. Bank of Korea has left borrowing costs steady. Japan’s core machinery orders dropped 7.1% in December.

Talking of economic stats, growth in the direct tax receipts remains slow while credit off take too continues to moderate. Car sales for FY12 may be either flat or even tad lower. On the plus side, FII inflows are still positive while the domestic funds are more cautious.

The opening is likely to be wee bit cooler as global investors fret over Greece’s inability to seal a deal on second bailout. Asian markets are mostly down post the Chinese inflation data.

US markets managed modest gains while their European counterparts finished mixed. Lots of results are on tap today. Watch out for the outcome of the ECB and Bank of England policy meetings. But, all eyes will be on Greece as it seeks to secure more international aid to avoid a default,” said IIFL report.

At 09:40 am; the Sensex was at 17659.63, down 47.69 points or 0.27 per cent. The 30-share index touched a high of 17685.71 and low of 17628.99 in trade so far.

The National Stock Exchange’s Nifty was at 5354.55, down 13.60 points or 0.25 per cent. The broader index touched a high of 5359.80 and low of 5341.15 intraday.

BSE Midcap Index was up 0.49 per cent and BSE Smallcap Index moved 0.36 per cent higher.

Amongst the sectoral indices, BSE IT Index was down 1.13 per cent, BSE Metal Index declined 0.71 per cent and BSE Capital Goods Index edged 0.07 per cent lower. BSE Realty Index moved 0.81 per cent higher, BSE Auto Index gained 0.53 per cent and BSE Power Index moved 0.52 per cent higher.

Bajaj Auto (1.06%), Jindal Steel (1%), Cipla (0.87%), BHEL (0.73%), Tata Motors (0.72%) and NTPC (0.45%) were the major Sensex gainers.

Hindalco Industries (-5.44%), Tata Consultancy Services (-2.29%), Bharti Airtel (-1.69%), Wipro (-1.30%) and Tata Steel (-1.26%) were the major losers.

Shares of Hindalco Industries and Tata Steel were witnessing profit booking ahead of their quarterly earnings report.

Market breadth was positive on the BSE with 890 gainers against 531 losers.

Foreign institutional investors continued with their buying spree in the Indian markets. As per provisional data, they bought equities worth Rs 384.24 crore on Wednesday. The FIIs have pumped in around Rs 6700 crore in the last six sessions alone.

Meanwhile, the Asian markets were witnessing a subdued session. Nikkei 225 was down 0.41 per cent, Hang Seng moved 0.39 per cent lower and Seoul Composite slipped 0.70 per cent.

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