Market may head higher amid volatility

The market may post gains, amid volatility, tracking positive global cues. Also crude oil prices have cooled off from record highs above $90 reached last week.

After market hours on Monday, 22 October 2007, Securities & Exchange board of India (Sebi) Chairman, M Damodaran said that proprietary sub-accounts (through which FIIs handle participatory notes) wishing to apply for FII status must send Sebi their letter of intent within 24 hours indicating their intent. The application itself must be submitted within a week’s time. Although Sebi will go ahead with its proposed restrictions on FII investments through participatory notes, p-notes as instrument are here to stay, provided the anonymity behind them is lifted.

Damodaran further added that currently there is no limit to the number of sub-accounts that may register for FII status. As of now, Sebi is comfortable with the numbers, at present 3000-plus. The Sebi board meets on 25 October 2007 to finalise the proposals.

Meanwhile, under pressure from the Left parties to make clear whether the Indo-US nuclear deal is on or off, government on Monday, 22 October 2007, after market hours said the operationalisation of the deal will take place in accordance with the UPA-Left committee's findings. External Affairs Minister Pranab Mukherjee made this clear after a meeting between leaders of the Left parties and the UPA coalition formed to go into the concerns of the allies on the nuclear deal. The committee would meet again on 16 November 2007.

Asian markets were higher today, 23 October 2007. Hang Seng (up 2.01% at 28,944.39), Taiwan's Taiwan Weighted (up 1.14% at 9,467.45), Nikkei (up 0.34% at 16,494.91), South Korea's Seoul Composite (up 1.22% at 1,927.07) and Singapore's Straits Times (up 0.47% at 3,659.66) edged higher.

US markets ended higher yesterday, 22 October 2007, as investors overcame some of their nervousness about the credit markets and uneven earnings and found solace in the technology sector. The Dow Jones Industrial Average gained 44.95 points, or 0.33%, to 13,566.97. The S&P 500 index rose 5.70 points, or 0.38%, to 1,506.33, while the technology-dominated Nasdaq Composite Index rose 28.77 points, or 1.06%, to 2,753.93.

Volatility is expected to remain high in the coming few days ahead of expiry of October 2007 derivatives contracts on Thursday, 25 October 2007. As per reports, marketwide rollover of derivatives positions from October 2007 series to November 2007 series stood at 24% while that of Nifty was 35%.

Crude oil prices fell on Tuesday, 23 October 2007, extending a sell-off from record highs on concerns about the state of the US economy. US light crude for December 2007 delivery fell 26 cents to $85.76 a barrel. Oil has retraced over $4 since hitting a record-high of $90.07 on Friday, 19 October 2007. London Brent crude fell 36 cents to $82.91 a barrel.

As per provisional data, foreign institutional investors (FIIs) sold shares worth a net Rs 1290.86 crore, while domestic institutional investors (DIIs) were net sellers of shares worth Rs 15.33 crore on Monday, 22 October 2007.

On Monday, 22 October 2007, the BSE 30-share Sensex rose 54.01 points or 0.31% at 17,613.99. However, the broader based S&P CNX Nifty lost 31.30 points or 0.60% at 5,184.