The market may drift lower on weak global cues. Asian stocks slipped on Tuesday, 5 February 2008 after a wave of broker downgrades on Wall Street on Monday, 4 February 2008, sparked fresh worries about the health of the US financial sector.
On the flip side, liquidity may get a boost from huge refunds that investors will get from Reliance Power IPO though it remains to be seen how much money comes to secondary market in the light of immense volatility witnessed on the bourses last month. Reliance Power, which raised a record $3 billion in its initial share sale in January 2008, said on Friday, 1 February 2008, it had begun refunding excess application money to investors. The initial public offer had received bids for $190 billion.
It also remains to be seen if the strong domestic liquidity will offset selling by FIIs. FIIs sold shares worth a huge Rs 13035.70 crore last month amid ongoing credit crisis in the US and in the backdrop of US recession fears looming large.
As per provisional data, FIIs bought shares worth a net Rs 163.74 crore on Monday, 4 February 2008. Local funds bought shares worth Rs 731.83 crore on that day.
FIIs were net buyers to the tune of Rs 2,012.81 crore in the futures & options segment on Monday, 4 February 2008. According to data released by the NSE, FIIs were net buyers of index futures to the tune of Rs 1,599.22 crore and bought index options worth Rs 677.95 crore. They were net sellers of stock futures to the tune of Rs 254.74 crore and sold stock options worth Rs 9.61 crore.
In the next few days, stock/sector specific activity may rule the roost depending on expectations from the Union Budget 2008-09 which will be presented at the fag end of this month.
In Asia, key benchmark indices in Hong Kong, China, Japan, South Korea and Singapore were down by between 0.29% to 1.99%. The Dow Jones industrial average lost 108.03 points, or 0.85% at 12,635.16 on Monday, 4 February 2008. The Standard & Poor's 500 Index lost 14.60 points, or 1.05%, at 1,380.82. The Nasdaq Composite Index shed 30.51 points, or 1.26%, at 2,382.85.