Profit-taking likely

Profit-taking may pull the market lower today with Asian markets mostly trading in the red. Rising interest rates may be another trigger for profit-taking. ICICI Bank on Tuesday said it will increase its reference rate for corporate loans and home loans by 1% from 9 February 2007. The BSE Sensex had slipped 38 points on Tuesday (6 February) to 14,478.19 on profit-taking after striking an all-time high of 14,564.80.

The near-term trend on the bourses will be determined by expectations regarding the Union Budget 2007-08. Market men expect the finance ministry to give a big impetus to agriculture and infrastructure in the budget. According to a pre-budget report of Man Financial, though the 10% surcharge on corporate tax may be eliminated, the effective tax burden for corporates may still go up if certain open-ended exemptions are removed.

FIIs have been in buying mode for the past few weeks. As per provisional data, FIIs were net buyers to the tune of Rs 894 crore on 6 February. They were net sellers to the tune of Rs 355 crore in index-based futures the same day. FIIs were net sellers to the tune of Rs 61 crore in individual stock futures also that day.

Asian markets were mixed on Wednesday. Key benchmark indices in Japan, South Korea and Taiwan were down between 0.2 - 0.9%. Key benchmark indices in Hong Kong and Singapore were up between 0.17 - 0.44%.

US stocks ended marginally higher on Tuesday, as oil prices backed down from a run toward $60 a barrel. The Dow Jones industrial average rose 4.57 points, or 0.04%, to end at 12,666.31, while the Standard & Poor's 500 Index added 1.01 points, or 0.07%, to reach 1,448.00. The Nasdaq Composite Index inched up just 0.89 of a point, or 0.04%, to 2,471.49.

On Tuesday, US crude oil futures ended just slightly higher at $58.88 a barrel after an early rally to $59.99 stalled. Oil prices jumped early in the day as a cold front swept across the northeastern United States.