Market may remain volatile

There is absence of any clear direction today from Asian markets which were mixed. High volatility characterized Wednesday (6 December)’s trading when Sensex rose 11 points.

The market sentiment remains firm due to strong FII inflow, continued strong economic growth data and healthy corporate earnings. A lot of money is said to be waiting on the sidelines to enter the market at correction. Very few got an opportunity to ride the latest rally, it being a sharp and swift rally with the Sensex having risen 10% in a little over a month.

As per provisional data released by stock exchanges, FIIs were net buyers to the tune of Rs 304 crore on 6 December. Sebi is yet to release the final figure on FII trade pertaining to 5 December. Sebi releases daily FII figures with a time lag of one day. The cumulative FII inflow has reached $8.3 billion in 2006 compared to a record inflow of $10.7 billion in 2005.

FIIs were net sellers to the tune of Rs 295 crore in index based futures on 6 December. They were net buyers to the tune of Rs 50.52 crore in individual stock futures on that day.

Asian markets were mixed on Thursday. Key benchmark indices in Japan, Singapore and Taiwan were up by between 0.17% to 0.3%. Key benchmark indices in Hong Kong and South Korea were down by between 0.1% to 0.2%.

US stocks fell on Wednesday as concerns about the outlook for software maker Oracle Corporation hit technology shares and investors worried that stronger-than-expected job growth could delay a cut in interest rates. The Dow Jones industrial average dropped 22.35 points, or 0.18 percent, to end at 12,309.25. The Standard & Poor's 500 Index finished off 1.86 points, or 0.13 percent, at 1,412.90. The Nasdaq Composite Index fell 6.52 points, or 0.27 percent, to close at 2,445.86.

US crude oil for January delivery fell 24 cents to settle at $62.19 per barrel on the New York Mercantile Exchange on Wednesday.