Positive global cues, healthy rollovers may trigger early rally

Local market is expected to open firm following positive global cues. Healthy rollovers may lift the sentiment further. The alarming rise in inflation is a cause of concern, which is now way above Reserve Bank of India’s caution limit of 5%. All eyes will be on inflation figures to be released by noon today for the week ended 12 April 2008.

Cues from derivatives front were strong. As per reports, marketwide rollover from April 2008 series to May 2008 series stood at 82% as compared to 79% in the previous series, March 2008 to April 2008. Nifty rollover stood at 71% as compared to 63% in the previous series.

Market may turn cautious ahead of Reserve Bank of India (RBI)’s monetary policy review on 29 April 2008. Analysts are split whether the central bank will raise interest rates, with a slim majority of economists polled, predicting no change to interest rates.

The near-term market will be driven by the quality of earnings rolled out by corporates in the coming days. Aggregate results of 301 companies showed 18.20% rise in net profit on 23.80% rise in net sales in Q4 March 2008 over Q4 March 2007. There was 29.40% rise in net profit on 24.40% rise in net sales in FY March 2008 over FY March 2007.

Important results to be watched out for during the day are ABB, Bharti Airtel, Siemens, Ambuja Cements, Titan Industries and Cipla among others.

Most Asian markets were trading firm today, 25 April 2008. Japan's Nikkei (up 2% at 13,811.90), Taiwan's Taiwan Weighted (up 0.25% at 9,013.06), Singapore's Straits Times (up 0.02% at 3,178.09), South Korea’s Seoul Composite (up 1.06% at 1,818.35) rose. However, Hong Kong's Hang Seng slipped 0.55% at 25,540.81.

US markets advanced yesterday, 24 April 2008 as investors focused on the Labor Department data showing weekly unemployment claims dropped and word that Ford had a $100 million profit in the first quarter. The Dow Jones industrial average rose 85.73 points, or 0.67%, to 12,848.95. The Nasdaq Composite index added 23.71 points, or 0.99%, to 2,428.92.

The Dow Jones Industrial Average climbed 79.79 points or 0.63% to 12,843.01. The tech-rich Nasdaq composite rose 23.71 points or 0.99% to 2428.92 and the broad-market Standard & Poor's 500 index advanced 8.48 points or 0.61% to 1388.41.

Back home, the 30-share BSE Sensex gained 23.04 points or 0.14% at 16,721.08 on 24 April 2008. The broader based S&P CNX Nifty lost 22.95 points or 0.46% at 4,999.85.

As per provisional data, foreign institutional investors sold shares worth a net Rs 759.16 crore yesterday, 24 April 2008. Domestic funds bought shares worth a net Rs 442.88 crore on that day.

FIIs were net buyers of Rs 591.53 crore in the futures & options segment on Thursday, 24 April 2008. They were net sellers of index futures to the tune of Rs 229.12 crore and bought index options worth Rs 740.36 crore. They were net buyers of stock futures to the tune of Rs 40.13 crore and bought stock options worth Rs 40.16 crore.

World oil prices, which had threatened to break the $120-a-barrel level, fell further in Asian trading after a strengthening US dollar and rising US crude stockpiles prompted traders to lock in profits. New York's main oil futures contract, light sweet crude for delivery in June, fell 46 cents to $115.60 per barrel.