Domestic bourses may track recovery in Asian markets

The domestic bourses have been taking cue from global markets over the past few days. The market here may follow closely on the heels of a recovery witnessed across Asia. The Sensex had plunged 453.36 points (3.4%) on Wednesday (14 March 2007) as part of a global crash brought about by deepening US mortgage-lending crisis. Key Asian share indices had dived 2 - 3% on Wednesday.

All the Asian markets were trading in the green on today, tracking a recovery on Wall Street on Wednesday. A falling yen also encouraged investors to look for bargains and pick up shares in exporters. Key benchmark indices in Hong Kong, Japan, South Korea, Singapore, China and Taiwan were up between 0.9 - 1.7%.

US stocks posted modest gains on Wednesday, as worries eased that losses for firms operating in the subprime mortgage sector -- which lends to borrowers with a weaker credit history -- might spill over into the wider economy and slow growth. The Dow Jones Industrial Average gained 57.44 points (0.48%), to settle at 12,133.40. The Nasdaq Composite Index advanced 21.17 points (0.9%), to 2,371.74.

FIIs pressed heavy sales on Wednesday, the day when the Sensex had plunged 453 points. As per provisional data, FIIs were net sellers to the tune of Rs 541 crore on that day. They were net sellers to the tune of Rs 84 crore on Tuesday (13 March 2007), the day when the benchmark Sensex had risen 80 points. A drop in FII volumes on Tuesday (as reflected in daily gross purchases and gross sales figures for the day).

FIIs were net sellers to the tune of Rs 1104 crore in index-based futures on Wednesday. They were net sellers to the tune of Rs 192 crore in individual stock futures on the same day. Nifty March 2007 futures settled at 3,599.55 on Wednesday, a steep discount of 41.55 points compared to the spot Nifty closing of 3,641.10.

Mutual funds continued sales of equities on Tuesday (13 March 2007). But their outflow of Rs 13.48 crore on Tuesday was much lower than Monday (12 March)’s Rs 146 crore. The outflow was still higher at Rs 384 crore on Friday (9 March 2007).

US oil rose 18 cents to $58.34 a barrel on Thursday, as drops in gasoline inventories in the world's top consumer raised concerns of a supply crunch ahead of the summer driving season.