The market is on a roll following strong growth in corporate earnings in a booming Indian economy. On Thursday (8 February 2007), the Sensex set its fourth record in the last five trading sessions. The government, on Wednesday (7 February 2007)estimated GDP growth of 9.2% in the financial year ending March 2007, above Reserve Bank of India (RBI)’s forecast between 8.5 - 9%, spreading cheer all around.
FIIs have stepped up buying since the upgradation of India by Standard and Poor's to investment grade. A lot of funds, for instance, pension funds in foreign countries, which were not allowed to invest in Indian equities hitherto, will now become eligible to purchase Indian equities after the Standard & Poor's upgrade on 30 January 2007.
Foreign funds bought equities worth Rs 2211 crore in four trading sessions, from 2 February to 7 February 2007. As per provisional data, FIIs were net buyers to the tune of Rs 255 crore on 8 February, the day when the Sensex staged an intra-day rebound from an over 100- point fall, to settle nearly flat for the day.
FIIs were net buyers to the tune of Rs 39 crore in index-based futures on 8 February 2007. They were net sellers to the tune of Rs 275 crore in individual stock futures the same day.
Key Asian markets were mixed on Friday (9 February 2007). While Japan’s Nikkei 225 average was up 0.6%, Hong Kong’s Hang Seng was down 0.37%. Markets in Singapore, South Korea and Taiwan were flat.
US stocks fell on Thursday after warnings by two big banks about bad loans in the US mortgage market reignited concerns about the housing market. The Dow Jones industrial average fell 29.24 points, or 0.23%, to close at 12,637.63. The Standard & Poor's 500 Index was down 1.71 points, or 0.12%, at 1,448.31. The Nasdaq Composite Index was down 1.83 points, or 0.07%, at 2,488.67.
On Thursday, European Central Bank kept interest rates steady at 3.5% but signaled that it is not done with hiking rates. Bank of England also left its key policy rate unchanged at 5.25% overnight, which had been widely expected following January's surprise 25 basis point increase.
US crude oil futures rose 43 US cents to $60.14 a barrel on Friday. In addition to the OPEC cuts and tensions over Iran, energy prices were also supported by news that Occidental Petroleum was unable to meet supply contracts due to a fire-stricken oilfield in California.