Indian stocks headed for weak start

Indian stocks may be geared for weak start today, 23 June 2008, as whole host of factors including weak global markets, shadows of a interest rate hike post double-digit inflation, and political uncertainty may create havoc on the bourses.

Also there might be possibility of early elections after Uttar Pradesh chief minister Mayawati’s Bahujan Samaj Party (BSP) withdrew its support to the Congress-led UPA government during the weekend.

Volatility is expected to remain high as derivatives contracts for June series are set to expire on Thursday, 26 June 2008. As per reports, the marketwide rollover of positions from June 2008 series to July 2008 series stood at 16% while that of Nifty was 20%, as on Friday, 20 June 2008.

Asian markets were trading weak today, 23 June 2008. China's Shanghai Composite slipped 1.98% or 56.01 points at 2,775.73, Nikkei plunged 1.16% or 162.27 points at 13,779.81, Hang Seng tumbled 1.28% or 290.53 points at 22,455.07, Taiwan's Taiwan Weighted lost 0.44% or 34.87 points at 7,867.57, Singapore's Straits Times fell 0.78% or 23.47 points at 2,978.34. and South Korea's Seoul Composite declined 1.17% or 20.25 points at 1,710.75

US stocks tumbled on Friday, 20 June 2008, with the Dow cracking below the crucial 12,000 mark to hit 3-month lows. Moody's cut its ratings for bond insurers M-B-I-A and Ambac. Merrill Lynch reducing its earnings estimates for a host of banks on concerns of credit risk, capital raising and possible dividend cuts also impacted sentiment. The Dow Jones industrial average slumped 220 points to 11,843 while the Nasdaq Composite index declined 56 points to 2406.

Back home, investors chucked stocks on Friday, 20 June 2008, to survive the snowballing threat of a possible monetary tightening by Reserve Bank of India to rein in soaring inflation. The 30-share BSE Sensex slumped 516.70 points or 3.42% at 14,571.29, and the broader based S&P CNX Nifty was down 157.70 points or 3.48% at 4347.55, on that day.

The Sensex is down 6635.48 points or 31.28% from a record high of 21206.77 it hit on 10 January 2008. It is down 5715.70 points or 28.17% in calendar year 2008 so far.

The BSE Sensex declined 618.33 points or 4.07% to 14,571.29 in the week ended Friday, 20 June 2008. S&P CNX Nifty lost 169.55 points or 3.75% to 4,347.55 in the week.

As per provisional data, foreign funds sold shares worth a net Rs 999.31 crore on 20 June 2008. Domestic funds bought shares worth a net Rs 563.86 crore on that day.

Foreign institutional investors (FIIs) were net sellers of Rs 1254.40 crore in the futures & options segment on Friday 20 June 2008. They were net sellers of index futures to the tune of Rs 1429.10 crore and bought index options worth Rs 17.74 crore. They were net buyers of stock futures to the tune of Rs 160.87 crore and sold stock options worth Rs 1.91 crore.

The wholesale price index rose 11.05% in the 12 months to 7 June 2008, government data released on Friday, 20 June 2008, showed. The rate was above market expectation of about 10% rise. The reading was the highest in 13 years since 6 May 1995, when it was 11.11%.

Crude oil prices rose in Asian trading today, 23 June 2008, after Saudi Arabia said at a weekend summit that it had raised output, and said speculators were partly to blame for higher prices. New York's main oil futures contract, light sweet crude for August delivery, was 29 cents higher at $135.65 per barrel.