Market may remain firm

The market may remain firm tracking Asian markets most of which were in the green. With the results season over, the near term trend on the bourses will be driven by expectations regarding the Union Budget 2007-08. Market men expect the budget to give big thrust to agriculture and infrastructure. There are also expectations that surcharge on corporate tax would be abolished.

FIIs were net sellers to the tune of Rs 470 crore last Thursday (1 February 2007), the day when Sensex had jumped 176 points. But as per provisional data, FIIs were net buyers to the tune of a huge Rs 947 crore on Friday 2 February 2007, the day when Sensex had gained 137 points to settle at lifetime closing high of 14,403.77. Nifty too struck lifetime high on that day.

FIIs were net buyers to the tune of Rs 546 crore in index-based futures on 2 February. They were net buyers to the tune of Rs 19 crore in individual stock futures on that day.

Mutual funds were net buyers to the tune of Rs 108 crore on 1 February. Mutual funds have pressed substantial sales since the middle of last month.

Asian markets barring Japanese markets were in the green on Monday. Key benchmark indices in Hong Kong, South Korea, Singapore and Taiwan were up by between 0.18% to 0.45%. Japan’s Nikkei 225 average was down nearly 1% as Japanese automakers tumbled after Nissan Motor slashed its earnings forecast.

US blue-chips eased on Friday after data showing moderate job creation in January suggested the Federal Reserve will not cut interest rates yet, while the S&P 500 and the Nasdaq edged higher. The Dow Jones industrial average fell 20.19 points, or 0.16 percent, to 12,653.49, while the Standard & Poor's 500 Index rose 2.45 points, or 0.17 percent, to 1,448.39. The Nasdaq Composite Index gained 7.50 points, or 0.30 percent, to 2,475.88.

US crude oil futures were little changed on Monday after jumping 3% to $59 a barrel on Friday amid forecasts of more cold weather in the United States and concern over supply from OPEC members Iran and Nigeria.

Base metals prices fell sharply on the London Metal Exchange on Friday on fund liquidation after a report of heavy losses at a hedge fund.