Market may slide on weak global cues

The market may decline on weak global cues. The near term trend may be cautious, with all eyes being on the Union Budget 2008, to be presented by the Finance Minster P Chidambaram on Friday, 29 February 2008.

As per reports, railway minister Lalu Prasad in his railway budget to be presented by fag end of February 2008, is likely to reduce both passenger fares and freight rates, riding a strong revenue growth and reduced operational costs. Rail fares are likely to be cut by 3% to 5% while freight rates for petroleum, steel and iron ore may come down by 4% to 5% due to reclassification of goods.

Meanwhile, annual inflation data, based on the wholesale price index, for the week ended 9 February 2008 is due today, 22 February 2008. India's wholesale price index rose 4.07% in the 12 months to 2 February 2008, marginally lower than the previous week ended 22 January 2008 rise of 4.11%.

Asian markets were trading weak today, 22 February 2008. Hong Kong's Hang Seng (down 1.93% at 23,166.73), Japan's Nikkei (down 1.93% at 13,423.94), Taiwan's Taiwan Weighted index (down 0.40% at 8,053.27), Singapore's Straits Times index (down 0.92% at 3,026.71), South Korea's Seoul Composite index (down 1.58% at 1,677.46) and China’s Shanghai Composite index (down 3.22% to 4,381.41) edged lower.

On Thursday, 21 February 2008, US markets declined after opening higher after poor economic data re-ignited the fears of economic slowdown in the US. The Dow Jones industrial average slipped 142.96 points, or 1.15%, to 12,284.30. The Standard & Poor's 500 index dropped 17.50 points, or 1.29%, to 1,342.53, while the Nasdaq composite index plunged 27.32 points, or 1.17%, to 2,299.78.

Back home, the 30-share BSE Sensex rose 117.08 points or 0.66% at 17,734.68 on Thursday, 21 February 2008. The broader based S&P CNX Nifty gained 37.35 points or 0.72% at 5,191.80 on that day.

At current 17,734.68, Sensex trades at a PE multiple of 16.90 to 17.73, based on projected FY 2009 EPS of Rs 1000-to-Rs 1050 for 30 Sensex companies.

As per provisional data, foreign institutional investors (FIIs) purchased shares worth Rs 209.43 crore Thursday, 21 February 2008. Domestic institutional investors (DIIs) were net sellers of shares worth Rs 140.68 crore on that day.

FIIs were net buyers to the tune of Rs 375.78 crore in the futures & options segment on Thursday, 21 February 2008. FIIs were net buyers of index futures to the tune of Rs 72.22 crore and bought index options worth Rs 163.18 crore. They were net buyers of stock futures to the tune of Rs 134.46 crore and sold stock options worth Rs 5.92 crore.

Meanwhile, the Centre on Thursday, 21 February 2008, approved a fresh Rs 500 crore assistance to help exporters make up for the loss in orders due to strengthening of the rupee. With the latest announcement, government's bailout package has crossed the Rs 5,700 crore mark.

Crude oil slipped today, 22 Friday 2008 as rising U.S. crude and gasoline stockpiles added to evidence of slowing demand in the world's largest consumer. The US crude futures for April delivery eased 39 cents to $97.84 a barrel.