March 2008 derivatives expiry to keep market volatile

The market is expected to see volatile trade as March 2008 derivative contracts are set to expire today, 27 March 2008. As per reports, the marketwide rollover of derivative positions from March 2008 series to April 2008 series stood at 58%, while that of Nifty was 52%.

US markets slipped yesterday, 26 March 2008 while Asian markets opened lower today, 27 March 2008. However year-end net asset value (NAV) boosting exercise from local mutual funds may prevent steep losses.

Meanwhile, the Finance Minister P Chidambaram speaking at a lecture in Singapore yesterday, 26 March 2008, said that GDP may grow at 9% for the year-ending March 2008. He added that rising food prices are putting pressure on inflation. He added that developing economies were shouldering an enormous burden from the relentless rise in prices of food and commodities.

The sharp rise in inflation has been a cause of concern, which has now risen above the Reserve Bank of India’s caution limit of 5%. As per data released on Thursday, 20 March 2008, inflation had surged to over 11-month high of 5.92% for the week ended 8 March 2008

Marketmen are keenly awaiting Q4 and full year March 2008 results from Indian corporates. Robust corporate advance tax payments in Q4 March 2008 indicate that corporate profit growth will be strong in the quarter. Advance tax figures showed banks, hospitality and software firms are doing better than sectors like automobiles and cement.

Asian markets were trading weak today, 27 March 2008. Japan's Nikkei (down 1.78% at 12,480.98), Hong Kong's Hang Seng (down 1.36% at 22,309.91), Taiwan's Taiwan Weighted (down 1.94% at 8,597.78), Singapore's Straits Times (down 1.07% at 2,963.30) and South Korea's Seoul Composite (down 1.11% at 1,661.07) edged lower.

US markets declined yesterday, 26 March 2008 due to poor economic data. US Treasury Secretary, Henry Paulson said that there is a need to strengthen & clarify rules governing the financial sector. The Dow Jones industrial average slipped 109.74, or 0.88%, to 12,422.86. The Standard & Poor's 500 index declined 11.86 points, or 0.88%, to 1,341.13, while the Nasdaq Composite index shed 16.69 points, or 0.71%, to 2,324.36.

Back home, the 30-share BSE Sensex was down 130.66 points or 0.81% at 16,086.83 yesterday, 26 March 2008. The broader CNX S&P Nifty was down 48.65 points or 1% at 4828.85 on that day.

As per provisional data, foreign institutional investors (FIIs) purchased shares worth Rs 393.91 crore on Wednesday, 26 March 2008. Domestic institutional investors (DIIs) were net sellers of shares worth Rs 108.65 crore on that day.

FIIs were net buyers of Rs 282.32 crore in the futures & options segment on Wednesday, 26 March 2008. They were net buyers of index futures to the tune of Rs 103.13 crore and bought index options worth Rs 289.42 crore. They were net sellers of stock futures to the tune of Rs 114.23 crore and bought stock options worth Rs 4.01 crore.