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Friday, February 02, 2007

Market may extend gains on firm Asian equities


The market may extend Thursday’s gains on the back of firm global markets. Sensex had surged 176 points on Thursday on the back of rally in global markets triggered by US Federal Reserve’s decision to keep interest rates steady. However, according to a dealer with a local brokerage Thursday’s rally on the domestic bourses was mainly due to short covering and not due to building of fresh long positions.

As per provisional data, FIIs were net sellers to the tune of Rs 242 crore on Thursday, the day when Sensex had surged 176 points. They were net buyers to the tune of Rs 418 crore in index-based futures on that day. They were net sellers to the tune of Rs 88 crore in individual stock futures on that day.

The Q3 results which just got over were strong. With Q3 earnings season over, the market’s focus will shift to expectations regarding Union Budget 2007-08.

The weekly inflation data is due today. The wholesale price inflation rate is forecast to edge up to 6% for 12 months to 20 Jan-07 from 5.95% the previous week.

Asian markets were firm for the second day in a row today. Key benchmark indices in Hong Kong, Japan, South Korea, Singapore and Taiwan were up by between 0.39% to 1.99%.

US stocks gained on Thursday, propelling the Dow to a record close, on stronger-than-expected earnings and expectations that interest rates won't rise any time soon. The Dow Jones industrial average shot up 51.99 points, or 0.41 percent, to 12,673.68. The Standard & Poor's 500 Index gained 7.70 points, or 0.54 percent, to 1,445.94. The Nasdaq Composite Index rose 4.45 points, or 0.18 percent, to 2,468.38.

The S&P 500 index had its highest close since September 2000, while the Dow also reached a record intraday high at 12,682.57.

Nymex crude was flat in Asian trading on Friday at $57.31 a barrel.