Domestic bourses may track weak global equities

The market is expected to edge lower due to fresh worries about the US economy. Domestic institutions may step up buying at lower level in case there is a sharp fall. Domestic private insurance firms have been putting in money raised through unit linked insurance plans (with a very high weighting in equity) in equities.

On the other hand, foreign institutional investors (FIIs) may press sales due to slide in rupee against the US dollar. Rupee was hovering at 40.73 against the dollar in early deals, weaker than Friday (7 September 2007)’s close of 40.6875/6975. The rupee has been one of the best performing currency against the dollar in Asia in the current calendar year. But the current slide in the rupee may prompt hedge funds to sell Indian equities so that they can still capture some of this year’s strong currency gains.

FIIs have made substantial buying this month. Their net inflow in the first few days of September 2007 totaled Rs 2191.60 crore (till 6 September 2007). As per provisional data, FIIs bought shares worth a net Rs 385 crore on Friday, 7 September 2007. Domestic institutions sold shares worth a net Rs 99 crore on that day.

Asian markets edged lower today, 10 September 2007, after the data released on Friday, 7 September 2007, showed US payrolls shrank in August 2007 for the first time in four years which raised fears that the world's largest economy, Asia's top export destination, was headed into recession. Key benchmark indices in Hong Kong, Japan, South Korea, Singapore, Taiwan, and Indonesia were down by between 0.8% to 2.5%.

US stocks tumbled on Friday, 7 September 2007 following weak job data. Dow Jones Industrial Average tanked 249.97 points or 1.87% at 13,113.38. The tech-laden Nasdaq Composite index lost 48.62 points or 1.86% at 2,565.70.

The BSE 30-share Sensex declined 25.89 points or 0.17% at 15,590.42 on Friday, 7 September 2007. The S&P CNX Nifty shed 9.10 points or 0.20% at 4509.50 on that day.

India's wholesale price index rose 3.79% per annum in the 12 months to 25 August 2007, lower than the previous week's 3.94% due to a decline in some food prices, government data showed on Friday, 7 September 2007. Inflation is at its lowest level since it touched 3.70% in the week ended April 15, 2006.