Market may extend gains

The upward momentum in the stock markets is likely to continue till the US Federal Reserve meeting scheduled on Tuesday, 11 November 2007. Fed is expected to cut Fed funds rate by at least 25 basis points. Recent data showing strong job creation by the US private sector in November 2007 has eased US recession worries.

Signs that the US economy is not ailing as much as has been thought caused investors to scale back expectations of the extent of an interest rate cut when the Federal Reserve meets. Yet, market men hope that a further cut in interest rates by the Fed will boost FII inflow in India.

Asian markets were mixed today, 10 December 2007. Hang Seng (up 0.85% to 29,081.68), Shanghai Composite index (up 1.16% to 5,151.04) and Straits Times index (up 0.27% to 3,567.44) edged higher. Taiwan Weighted index (down 0.51% to 8,678), Nikkei (down 0.23% to 15,919.90), and Seoul Composite index (down 0.44% to 1,925.72) edged lower.

US stocks ended on a mixed note on Friday, 7 December 2007 in spite of better than expected employment data. November non-farm payrolls increased and unemployment rates remained steady.While the numbers helped to ease recession concerns. They also reduced probability of the FOMC cutting the Fed funds rate by 50 bps at its 11 December 2007 meeting.

The Dow Jones industrial average rose 5.69 points, or 0.04%, to 13,625.58. The Standard & Poor's 500 index declined 2.68 points, or 0.18%, to 1,504.66. The Nasdaq Composite index slipped 2.87 points, or 0.11%, to 2,706.16.

The Bank of England lowered its key interest rate on Thursday, 6 December 2007 citing signs of slowing growth. The Monetary Policy Committee, or MPC, voted to reduce the official bank rate paid on commercial bank reserves by 0.25 basis points to 5.5%. However the European Central Bank Monetary Policy Committee decided to keep interest rates on hold at 4% after their monthly policy meeting yesterday, 6 December 2007.

Back home, The 30-share BSE Sensex rose 170.13 points or 0.86% to 19,966 on Friday, 7 December 2007.

The 30-share BSE Sensex surged 602.81 points or 3.11% to 19,966 in the week ended 7 December 2007. The S&P CNX Nifty gained 211.55 points or 3.67% to 5,974.30 in the week.

As per provisional data, foreign institutional investors (FIIs) sold shares worth a net Rs 253.84 crore, while domestic institutional investors (DIIs) were net buyers of shares worth Rs 339.64 crore on Friday,7 December 2007.

Crude oil fell for a second day today, 10 November 2007, in New York on speculation slowing U.S. economic growth may limit demand as fuel stockpiles rise. Crude oil for January delivery declined as much as 53 cents to $87.75 a barrel in after-hours electronic trading on the New York Mercantile Exchange. Brent crude oil for January settlement declined 24 cents, or 0.3%, to $88.40 a barrel