Local equities geared for weak opening, IIP figures eyed

Indian equities are braced for weak opening today, following negative global market cues. The record-breaking rally in crude oil may also continue to weigh on investor sentiment. However the key data which the market will be eyeing today, 12 May 2008, is the industrial production data for March 2008. Industrial production had risen 8.6% in February 2008, bouncing from January 2008's upwardly revised figure of 5.8%.

The spiraling inflation has been a major cause of concern for Indian equities market. The wholesale price index rose 7.61% in the 12 months to 26 April 2008, marginally higher than previous week's annual rise of 7.57%, government data showed on Friday, 9 May 2008. The rate was the highest since an annual reading of 7.68% on 13 November 2004. The WPI remained above the 7%-mark (significantly above RBI's revised target of 5.5% for the year) for the past four weeks.

Meanwhile, the Left parties may reportedly issue another warning soon to the ruling United Progressive Alliance (UPA) following the failure of the government to stem burgeoning prices and its efforts to operationalise the Indo-US nuclear deal. The Left parties are slated to meet on 23 May 2008, six days ahead of their ninth round of deliberations with the UPA on the nuclear issue.

The recent rally in crude oil may also continue to weigh on investor sentiment as higher crude prices would result in economy slowing down a bit. U.S. light crude for June delivery rose 18 cents to $126.14 a barrel today, 12 May 2008, as violence in the Middle East heightened worries of supply disruptions in the world's largest crude producing region. It had struck a record high of $126.27 in late trade on Friday, 9 May 2008.

With results already declared from majority of the frontline corporates, the result season has almost come to an end. The near term trend is likely to be dictated by global cues.

Aggregate results of 1642 companies showed 18.20% rise in net profit on 22.70% rise in net sales in Q4 March 2008 over Q4 March 2007, so far. There was 29.40% rise in net profit on 23.50% rise in net sales in the year ended March 2008 over year ended March 2007.

Asian markets were trading lower today, 12 May 2008. Sanghai Composite index (down 0.63% at 3,590.68), Nikkei 225 Average (down 0.17% at 13,632.04), Straits Times index (down 0.03% at 3,161.14), and Taiwan Weighted index (down 0.27% at 8,768.56) declined.

US markets slumped on Friday, 9 May 2008, as American International Group Inc (AIG), the world's largest insurer, reported huge losses while crude oil surged to a new high. The Dow Jones industrial average slipped 120.90 points at 12745.88 and the Nasdaq Composite declined 5.72 points at 2445.52. The S&P 500 index shed 9.40 points to 1,388.28.

Back home, the market tumbled on Friday, 9 May 2008, hit by a series of bad news on the domestic and global front. The 30-share BSE Sensex lost 343.58 points or 2.01% at 16,737.07 while the broader based S&P CNX Nifty lost 99.10 points or 1.95% at 4982.60, on that day.

After four successive weeks of gains, the market went tumbling down on all five sessions of the week ended 9 May 2008, as the bears kept hammering down stocks cutting across sectors almost right through the week. The BSE Sensex plunged 863.05 points or 4.9% to 16,737.07 and the S&P CNX Nifty fell 245.6 points or 4.69% to 4,982.60 in the week ended 9 May 2008.

As per provisional data, foreign funds sold shares worth a net Rs 619.34 crore on Friday 9 May 2008. Domestic funds bought shares worth a net Rs 180.16 crore on that day.

Foreign institutional investors (FIIs) were net buyers of Rs 122.49 crore in the futures & options segment on Friday, 9 May 2008. They were net sellers of index futures to the tune of Rs 484.85 crore and bought index options worth Rs 725.67 crore. They were net sellers of stock futures to the tune of Rs 85.18 crore and sold stock options worth Rs 33.15 crore.