Strong Wipro results may boost market at open

The market may edge higher with Wipro reporting strong Q3 December 2006 results just a few minutes back. But cautiousness may set in after ratings agency Moody's Investors Service said on Tuesday that India's economy is showing signs of overheating and capacity constraints may come in the way of sustaining an annual growth rate of 9%.

Wipro has reported a 40% year on year rise in December 2006 quarter net profit as per US accounting standards to Rs 745 crore from Rs 532 crore in December 2005 quarter.

FIIs resumed sales after they had turned net buyers in two trading sessions on 11 January and 12 January. FIIs were net sellers to the tune of Rs 238.90 crore on Monday 15 January, the day when Sensex had risen 73 points. Before their two-day purchases worth Rs 366 crore (on 11 January and 12 January), FIIs had pressed heavy sales that had caused a sharp market fall.

As per provisional data, FIIs were net buyers to the tune of Rs 190 crore on Tuesday 16 January, the day when Sensex had lost 15 points. They were net buyers to the tune of Rs 102 crore in index-based futures. They were net sellers to the tune of Rs 134 crore in individual stock futures.

Mutual funds are in buying mode. They were net buyers to the tune of Rs 103.51 crore on 15 January. On 12 January, they were net buyers to the tune of a whopping Rs 637 crore.

Q3 results and the management guidance about the outlook will dictate the near-term trend on the bourses. After results, the focus is likely to shift to the Union Budget 2007-08. Market players are likely to start building fresh positions expecting a favourable policy for businesses in the budget.

Asian markets were mixed on Wednesday. Key benchmark indices in Hong Kong, Japan, and South Korea were down by between 0.2% to 1%. Key benchmark indices in Singapore and Taiwan were up by between 0.2% to 0.5%.

US blue-chip stocks rose on Tuesday on optimism about the earnings reporting season under way, while the broader market ended little changed as gains were offset by a sharp drop in oil prices that hurt energy shares. The Dow Jones industrial average was up 26.51 points, or 0.21 percent, at 12,582.59. The Standard & Poor's 500 Index was up 1.17 points, or 0.08 percent, at 1,431.90. But the Nasdaq Composite Index was down 5.04 points, or 0.20 percent, at 2,497.78.

Oil price declined sharply on Tuesday after Saudi Arabia said OPEC production cuts were working well and there was no need for an emergency meeting of the producer group. US crude for February delivery fell $1.78 to settle at $51.21 a barrel, after hitting a session low at $50.55 on the New York Mercantile Exchange.