Volatility may remain high due to derivatives expiry

The market is likely to open on a firm note taking cue from firm global markets. However, volatility may remain high as investors square off or roll over November 2006 derivatives contracts to December 2006 series. The November derivatives contracts expire today.

Mutual funds may remain active in the market today to support their month-end net asset values (NAVs).

FIIs were net sellers to the tune of Rs 335 crore on Tuesday (28 November). This was their biggest daily inflow this month. As per provisional data, FIIs were net sellers to the tune of Rs 241 crore on 29 November. They were net buyers to the tune of Rs 291 crore in index-based futures on 29 November. They were net sellers to the tune of Rs 730 crore in individual stock futures on that day. Weakness in index heavyweights restricted Sensex’s gain on Wednesday (29 November) to 15 points.

Asian shares rose on Thursday, led by exporters and resource stocks, after upbeat US growth data eased concerns about the health of the economy in Asia's biggest export market. Japanese shares rose to their highest in nearly two weeks, South Korean stocks hit a six-month high and Singapore's benchmark index notched up a record peak.

US stocks jumped on Wednesday after the government raised its estimate for economic growth and a surge in oil prices lifted energy stocks, helping major indexes recover most of the ground they lost from a big sell-off early in the week. The Dow Jones industrial average rose 90.28 points, or 0.74 percent, to finish at 12,226.73, while the Standard & Poor's 500 Index jumped 12.76 points, or 0.92 percent, to close at 1,399.48. The Nasdaq Composite Index advanced 19.62 points, or 0.81 percent, to end at 2,432.23.

US oil futures dipped, but still remained near a two-month high after weekly U.S. inventory data showed a surprise decline in heating fuel stocks in the world's biggest consumer. NYMEX crude for January delivery fell 17 cents to $62.29 a barrel.