Thailand government’s late night decision on Tuesday to partially roll back currently control measures and a record closing for Dow Jones Industrial Average on Tuesday would trigger a rebound on the domestic bourses today. Thailand will exclude equities investments from a central bank measure aimed at curbing speculation in the baht, Thailand’s Finance Minister Pridiyathorn Devakula said on Tuesday after the stock market suffered its worst fall in 16 years. The news sent Thailand’s stock market up 8.8 percent at the open on Wednesday.
Asian stock markets rebounded on Wednesday as worries about Thailand eased after the government reversed restrictions on foreign investments in its share market. Key benchmark indices in Hong Kong, Japan, South Korea, Singapore and Taiwan were up by between 0.78% to 1.1%.
Sensex had tumbled 349 points on Tuesday (19 December) in a broad based decline in Asian markets after Thai central bank's currency controls heightened concern about emerging markets. As per provisional data, FIIs were net sellers to the tune of Rs 823 crore on that day. They were net sellers to the tune of Rs 831 crore in index-based futures and they net sold Rs 49 crore in individual stock futures.
FIIs were net sellers in three out of four trading sessions from 13 December to 18 December. Their net outflow was Rs 182.70 crore on 18 December compared to an outflow of Rs 46 crore on Friday 15 December. FII activity is likely to be muted till the end of this month, as foreign fund managers will be on vacation for Christmas and New Year.
Volatility may remain high in the next few days ahead of expiry of December 2006 derivatives contracts next Thursday (28 January).
Technical analysts feel that the Nifty has a strong support at 3,700 and Sensex at 12,800-12,900.
The near term trigger for domestic bourses is Q3 December 2006 results. Market men expect December 2006 quarter to be another strong quarter in terms of earnings growth. The Q3 results would start trickling in from about 12 January 2007.
The Dow Jones industrial average finished at a record high on Tuesday, spurred by a rise in oil prices that boosted shares of Exxon Mobil Corp. But the Nasdaq fell as technology stocks dropped after disappointing financial results from industry bellwether Oracle Corp. The Dow Jones industrial average rose 30.05 points, or 0.24 percent, to end at a record 12,471.32. The Standard & Poor's 500 Index advanced 3.07 points, or 0.22 percent, to finish at 1,425.55. But the Nasdaq Composite Index slipped 6.02 points, or 0.25 percent, to close at 2,429.55.
US crude oil for January delivery rose 94 cents, or 1.5 percent, to settle at $63.15 a barrel on the New York Mercantile Exchange on Tuesday. The rise in oil prices was attributed to expectations that US crude inventories fell in the past week due to shipping delays along the coast of the Gulf of Mexico. US oil inventory data will be released on Wednesday.