India Markets Drop 7.25% as Satyam CEO Resigns

[Excerpted from Bill Cara's Daily Report]

The equity market of India dropped -7.25% Wednesday as the CEO of Satyam Computer Services, the country’s fourth largest outsourcing company quit, announcing that his company profits were overstated. Reuters is reporting that the India economy and stockmarket is headed for tough times. Caveat emptor.
http://finance.yahoo.com/news/Indias-Satyam-chief-quits-rb-13987465.html

In other Asia-Pacific equity markets Wednesday, the losers were Shanghai (-0.68% to 1924.0) and Hong Kong (-3.8% to 14987.5), while Tokyo (+1.7% to 9239.2) and Australia (+1.06% to 3728.2) were higher. Shanghai had been very strong earlier this week, while after several very bullish days, Hong Kong started a bit of a retreat yesterday.

Earlier (6:30am ET), the European bourses were soft: French CAC -0.02%; German DAX -0.62%; and UK FTSE -1.3%. Profit taking seems prevalent in banks and energy.

North American markets were stronger yesterday, particularly in Technology (XLK +2.3%) and Basic Materials (XLB +2.2%), while the losers were the defensive pair of Healthcare (XLV -1.6%) and Consumer Staple (XLP -1.5%).

At the close in NY, the DJIA (+62.21 +0.69 +9015.10), S&P 500 (+7.25 +0.78% to 934.70) and NASDAQ Composite (+24.35 +1.50% to 1652.38) were strong starting from the 90-minute mark.

Industries that led the way on impressive volume gains were: Computer Peripherals (+7.8%), Iron & Steel (+7.6%), Computer Storage (+7.4%), Hotels (+6.5%) and Consumer Finance (+6.2%). Retail Grocery (-3.6%) was a loser.

Among the Cara 100, the winners were Brunswick Corp (BC +13.9%), Electronic Arts (ERTS +11.1%) and Tenaris (TS +10.1%). GOL Airlines (GOL +13.6%) was strong, but is also being removed from the Cara 100. The losers were: Garmin (GRMN -4.1%), Bristol Myers (BMY -3.8%), Nucor steel ((-3.7%) and Netease (NTES -3.2%). Netease is also being removed from the Cara 100.

In the forex market yesterday, the US Dollar was up a bit +0.10% to 82.83, while the Euro was down -0.68% to 135.15. The Yen also dropped again (-0.42% to 106.75), but the Pound (+1.28% to 148.94) and Loonie (+0.56% to 84.46) were winners again.

Crude Oil futures ($WTIC), which had been gushing for four consecutive sessions, went flat (-$0.07/bbl).

Wednesday morning, the $USD is a tad stronger than a couple hours ago, but much lower that yesterday morning (in brackets): 83.20 (84.46), while the Euro is at 135.80 (133.93).

Crude Oil futures (compared to yesterday morning in brackets) are softer: 48.47 (49.75).

Yesterday morning in this space, I wrote, “The weak Euro/strong Dollar may fool some traders who are expecting weak precious metals to follow yesterday’s weakness. Do not be fooled.” It followed later that $GOLD reversed the prior day plunge with a gain of +$6.36/o to 864.16, so that was wise counsel.

Spot prices for gold, palladium, platinum and silver at 7:13am ET today (compared to yesterday morning in brackets) were: 864.45 (847.80), 199 (197), 992 (961), and 11.41 (11.17), respectively.

DJIA futures at 7:15am were -59 at 8891.
Volume is returning to the market, as expected. For the Cara 100 stocks, 25 of 100 had trading volume
Of +40% or more greater than the long-term average, while 13 of the 100 were over +75% average daily volume.