Global Outlook Jan 10 2011

US markets closed lower as mixed jobs report and lower consumer credit data weighed on investors sentiments. Initially markets were mixed as investors reacted to Labor Department's closely watched monthly employment report, which showed lower than expected job growth in December but also showed drop in the unemployment rate. US non-farm payroll employment increased by 1,03,000 jobs in December compared to market expectation of about 1,60,000 jobs increase. However, report also showed that the unemployment rate fell to 9.4% in December compared to markets expectation of 9.7% decrease. Later, markets extended losses after Federal Reserve said that consumer credit increased by USD 1.35 billion in November compared to market expectation of USD 2 billion increase. However, rise in railroad stock after upbeat results and comments from railroad equipment supplier Greenbrier, capped losses.

European markets European markets ended lower pulled by mining stocks after poor economic data. Commodity producers weakened after crude and metals prices slipped from recent highs. A higher than expected fall in German production also dampened the sentiments. German industrial production fell 0.7% in November, the nation's economics ministry reported Friday. Economists had forecast a 0.2% decline. Investors also cut position after Eurostat report revealed that gross domestic product in the
eurozone grew only 0.3% in the third quarter instead of 0.4% as previously estimated. Adding to chaos, rise in cost of insuring Western European sovereign debt against default to record-high territory pulled equities down.


International News

U.K. economists predict that the Bank of England will keep its bond program and key interest rate on hold next week after above-target inflation prompted some analysts to bring forward forecasts for increases in borrowing costs.
Daewoo Shipbuilding and Marine Engineering signed a cooperation agreement with China's Rilin Group on the vessel repair and wind power sector.
US Federal Reserve Vice Chair Janet Yellen defended the central bank's controversial program to buy assets in order to stimulate the economy, citing an internal study showing the full program will result in a gain of 3 million jobs.


Domestic News

Oil minister Murli Deora on Saturday sought from finance minister Pranab Mukherjee an immediate interim relief of Rs 10,000 crore for state-run oil marketing companies to help them stay in black in the third quarter.

Union environment minister Jairam Ramesh said on Saturday, that Lavasa had still not been given a clean chit. The fate of Lavasa hill city, planned across 25,000 acres in Pune district, still depends on the Centre’s Expert Appraisal Committee (EAC) panel report that will come to the Ministry of Environment and Forets (MoEF) on January 10.
Union Finance Minister Pranab Mukherjee on Sunday asserted that the Central Government is taking all necessary steps to check the price rise of essential commodities, and added that measures, both on supply and demand side, are being taken and imports of essential food items on short supply with zero duty are being allowed to improve the situation.


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