4:15 PM New York – U.S. indexes were little changed and the Nasdaq index extended weekly gain to a new high in the last twelve years. Global indexes closed at a 30-week high. The crude oil price in the last three months contributed to the gain in consumer prices. India plans to increase 18% spending in the next fiscal year.
U.S. stocks wavered in after consumer price index increased 0.4% in February and confidence edged lower in March. Bank stocks were in focus after investors reassessed the data from the latest stress tests from the Fed and airlines declined after crude oil prices rose and Treasuries edged lower more in the week.
For the week, the S&P 500 index increased 2.4% and extended the gains in the year to 11.6% and the Nasadq added 2.2% and extended the yearly advance to 17%.
European indexes gained after the International Monetary Fund approved a €28 billion loan for Greece. The benchmark index in Germany increased a fraction and increased the yearly advance to 21.4% and the index increased o 14% in the year so far.
The euro area trade balance swung to a deficit in January. UK home prices sentiment index fell for the twenty-first consecutive month in March. Air Berlin, the discount carrier said fiscal 2011 loss widened.
Stocks in Tokyo rallied for the fourth day in a row as the yen hovered near the 11-month low. Freight shipping companies gained after the rate index jumped and automotive tire makers declined after the natural rubber industry association forecasted a shortage.
In Mumbai the benchmark index declined 1.2% after India’s government proposed latest $298 billion budget for the next fiscal year that begins on April 1. The government hopes to cut subsidies to farm sector to 2% from 2.4% of GDP in the current fiscal year.
The government estimated economic growth of 6.9% in the fiscal year ending this month and held out expectations of 7.5% growth in the next fiscal year, one of the fastest in the world.
The government spending is expected to increase 18% and central government plans to increase borrowings to $90 billion from $85 billion, much of it from the domestic market.
The government estimated budget deficit of 5.9%of gross domestic product, substantially higher than its first estimate of 4.5% and forecasted next fiscal year deficit to decline to 5%.
The sustained elevated government spending and borrowing has largely neutralized the tight monetary policy of the Reserve Bank of India and contributed to a sharp upswing in inflation that has spawned widespread discontent across the nation which mostly hits the middle class and the poor.
The annual inflation has hovered above 9% for the most of the last six years and prices of food, fuel and basic services have more than tripled in the period. The latest bout of elevated inflation is rooted in excessive government spending and borrowings to funds huge subsidies programs for the poor.
Australian stocks eased in a listless trading and the benchmark indexes gained 1.5% in the week. Australian indexes lag the latest global markets momentum in the last six weeks. Resources linked stocks were mixed but banks were under pressure.
Commodities, Bonds and Currencies
The 10-year U.S. bond yield increased to 2.30% and 30-year U.S. bond was unchanged at 3.41%.
The U.S. dollar decreased to $1.316 to one euro and closed higher against the Japanese yen to 83.371 yen.
Immediate delivery futures of Texas crude oil increased $1.97 cents to $107.08 a barrel and Brent crude futures added to $3.08 to $125.60. Futures of natural gas decreased 0.06 cents to $2.34 per mbtu and gasoline price increased 7.3 cents to 3336.19 cents a gallon.
In metals trading, copper fell 2.05 cents to $3.87 per pound, gold declined $2.10 to $1,657.40 per ounce and silver decreased 13 cents to $32.59.