Market geared for weak opening

Local equities are braced for lower start tracking weakness in global markets. However local factors like fears of early election would play a bigger role in influencing the near term market trend. Wary investors had pressed heavy sales yesterday, 2 June 2008 over uncertainty that Left parties may withdraw support to the government.

Prime Minister Manmohan Singh reportedly said that the government is left with no option but to hike the fuel prices in the wake of soaring global crude oil prices. However government's move to hike fuel price will face challenge from Left, and may propel inflation above 10%.

On the other hand, if government does not hike prices, oil marketing companies will go bankrupt, spoiling its report card.

In coming weeks, markemen would be eyeing two things. One would be progress of monsoon and second would be the advance tax figures.

Asian markets were trading weak today, 3 June 2008. Shanghai Composite (down 0.46% at 3,443.10), Japan's Nikkei (down 1.51% at 14,221.79), Hong Kong's Hang Seng (down 1.49% at 24,461.11), Taiwan's Taiwan Weighted (down 0.84% at 8,651.14), Straits Times (down 0.96% at 3,157.45) and South Korea's Seoul Composite (down 1.17% at 1,825.89), edged lower.

US markets declined yesterday, 2 June 2008, on renewed fears that the credit crunch is yet to run its course after S&P downgraded debt ratings of three big securities companies. In the economic news, the May ISM index, rose 2.1%, suggesting a slight contraction in United States manufacturing activity.

The Dow Jones industrial average plunged 134.50, or 1.06%, to 12,503.82. The S&P 500 index slipped 14.71 points, or 1.05%, to 1,385.67. The Nasdaq Composite index was down 31.13 points, or 1.23%, to 2,491.53.

Back home, mounting political concern rattled bourses since second half of day's trading session, wiping-off steady early gains, yesterday, 2 June 2008. The 30-share BSE Sensex eroded a sharp 352.39 points or 2.15% to 16,063.18 and the broader based S&P CNX Nifty declined 130.5 points or 2.68% to shut shop at 4,739.60, on that day.

As per provisional data, foreign funds sold shares worth a net Rs 349.84 crore yesterday, 2 June 2008. Domestic funds bought shares worth a net Rs 9.81 crore on that day.

Foreign institutional investors (FIIs) were net buyers of Rs 242.85 crore in the futures & options segment yesterday, 2 June 2008. They were net sellers of index futures to the tune of Rs 923.24 crore and bought index options worth Rs 759.95 crore. They were net buyers of stock futures to the tune of Rs 390.03 crore and bought stock options worth Rs 16.11 crore.