Market may drift lower on weak Asian equities

The market may edge lower tracking weakness in Asian stocks caused by on worries about the credit market after US financial giant Citigroup said it may suffer up to $11 billion in write-downs for subprime losses. For a while now, domestic markets have been taking cues from Asian markets.

A slowdown in FII inflow at the fag end of last month and at the onset of this month may cap upside. FIIs bought shares worth a net Rs 228 crore on Wednesday 31 October 2007, followed by an inflow of Rs 180.60 crore on Thursday, 1 November 2007.

The Q2 September 2007 results of India Inc.were decent to strong which means that strong fundamentals would support Indian equities at declines. Mutual funds are said to be sitting on a strong cash pile of about Rs 14000 crore and they may step up buying if and when there is a steep correction on the bourses.

Key benchmark indices in Hong Kong, Japan, South Korea, Singapore and Taiwan were down by between 0.73% to 2.3%. The Hong Kong stock market was the major loser today after Chinese Premier Wen Jiabao said China needed new laws before going ahead with a programme allowing mainland Chinese to invest directly in Hong-Kong-Listed securities

On Wall Street, stocks eked out a small gain on Friday, 2 November 2007, following strong October 2007 jobs data, pushing the blue-chip Dow and technology-laden Nasdaq Composite Index modestly higher. The crucial US jobs report showed payrolls surged in October at twice the expected rate, suggesting the world's biggest economy was strong enough to handle a deep housing slump without falling into recession.

The Indian market had surged on Friday, 2 November 2007, in what was an intra-day turnaround. Sensex rose 252 points or 1.28% to settle at 19,976.23, after an initial sharp fall during the day. As per provisional data, FIIs sold shares worth a net Rs 1230.86 crore on Friday, 2 November 2007 on that day. Domestic institutions had bought shares worth a net Rs 444.74 crore on that day.