Profit taking may cap upside

The market is likely to remain firm but the upside may be capped by profit taking with the Sensex hitting a string of record highs over the past few days. Continued strong FII inflow may keep sentiment firm. The Asian markets were mostly in the green. As per news which has just hit the market, the Bank of Japan has kept interest rates unchanged at 0.25% as was widely expected by the market.

FII inflow for calendar 2006 has reached $7.8 billion (till 14 November) compared to a record inflow of $10.7 billion in 2005. Revision in earnings estimates by brokerages for companies following strong Q2 results has fuelled surge in FII inflow in the past few weeks. Another factor that has contributed to the surge in FII inflows is the fresh number of FIIs registering with Sebi every day. Since January this year, there has been an addition of over 150 FIIs, and the aggregate now stands at 978. A strong global liquidity, too, has aided the fund flow.

A section of the market attributes the solid surge on the Indian bourses to increasing recognition of India’s long-term growth prospects. From 4,644 on 23 June 2004, it has galloped 190% in less than two and a half years.

FIIs were net buyers to the tune of Rs 262 crore in index-based futures on Wednesday. They were net sellers to the tune of Rs 31 croer in individual stock futures on that day. As per provisional data, FIIs were net sellers to the tune of Rs 84 crore in the cash segment on that day.

Key benchmark indices in Japan, Hong Kong, Singapore and Taiwan were up by between 0.2% to 0.4% on Thursday.

US stocks rose on Wednesday as a proposed airline merger lifted airline shares and after positive broker comments sparked a surge in Google Inc.'s shares. But the three major US stock indexes ended sharply off the session's best levels after minutes from the Federal Reserve's recent policy-setting meeting sparked worries that the central bank could delay interest-rate cuts as it fights to keep a lid on inflation. The Dow Jones industrial average gained 33.70 points, or 0.28 percent, to end at a record 12,251.71. The Standard & Poor's 500 Index added 3.35 points, or 0.24 percent, to finish at 1,396.57. The Nasdaq Composite Index rose 12.09 points, or 0.50 percent, to close at 2,442.75. The key US data viz. US consumer prices data is due later in the day.

US crude was steady at $58.76 after climbing 48 cents on Wednesday, boosted by US data showing sharp fall in fuel inventories and after OPEC signalled it might need to cut crude output again in December.

Other Popular Pages