Market to head higher on firm global cues

The market is expected to edge higher, tracking firm global markets. The BSE 30-share Sensex posted its biggest ever-single day point gain of 878.85 points or 4.99% to settle at 18,492.84, on Wednesday, 23 October 2007. The Sensex’s previous biggest single day point gain was on 9 October 2007, when it had jumped 788.85 points or 4.51% to 18,280.24.

From its recent intra-day low of 17,171.45, touched on 22 October 2007, the Sensex has surged 1321.39 points at current 18,492.84. It is now 705.82 points away from all-time high of 19,198.66 struck on 18 October 2007.

The broader based S&P CNX Nifty jumped 289.70 points, or 5.59%, to 5,473.70, on 23 October 2007.

The market regulator Securities Exchange Board of India, after trading hours on Monday, 22 October 2007, provided partial breather to FIIs with respect to proposed restrictions on use of participatory notes and said it would speed up regulatory clearance for foreigners keen to invest transparently. The minimum networth criteria for a foreign individual investor, who intends to invest directly is set at $50 million, television reports suggested.

Asian markets advanced today, 24 October 2007. Hong Kong's Hang Seng (up 1.64% at 29,857.49), Japan's Nikkei (up 0.78% at 16,578.59), Taiwan Weighted (up 1.08% at 9,605.43), South Korea's Seoul Composite (up 2.33% at 1,993.32) and Singapore's Straits Times (up 0.81% at 3,725.26), edged higher.

Wall Street shares ended with a spurt yesterday, 23 October 2007, as investors who were uneasy about the economy, were reassured by solid earnings from blue chip names including Apple and American Express Company. The Dow Jones Industrial Average surged 109.26 points, or 0.81%, to 13,676.23. The Standard & Poor's 500 index rose 13.26 points, or 0.88%, to 1,519.59 while the Nasdaq Composite index gained 45.33 points, or 1.65%, to 2,799.26.

On 16 October 2007, Sebi had proposed curbs on issuance of offshore derivative instruments (ODIs), also known as P-notes, based on assets under management of foreign institutional investors (FIIs) and prohibited sub-accounts of FIIs from issuing P-notes. Its board would meet on 25 October 2007 to take a decision on these proposals.

Volatility is expected to remain high ahead of expiry of October 2007 derivatives contracts on Thursday, 25 October 2007. As per market data, marketwide rollover of derivative positions from October 2007 series to November 2007 series was 42% while Nifty rollover was 47%.

The RBI’s mid-term review of annual policy due on 30 October 2007, and US federal reserve’s meeting on 31 October 2007, on interest rates will be key events that will drive the market.

As per provisional data, foreign institutional investors (FIIs) purchased shares worth a net Rs 390.71 crore, while domestic institutional investors (DIIs) were net buyers of shares worth Rs 37.64 crore on Tuesday, 23 October 2007.

New York's main futures contract, light sweet crude for delivery in December, was down 37 cents at $84.90 a barrel, which is now more than five dollars below the record high of $90.07 struck on Friday, 19 October 2007. Brent crude for December delivery slipped 30 cents to $82.55, off its all-time peak of $84.88 hit on Thursday, 18 October 2007.