Range-bound moves likely

Local equities are likely to stay range-bound tracking mixed global cues. The advance tax figures of some leading banks and a few corporates for the April-June quarter of this fiscal provide some room for comfort. State Bank of India recorded a 32% increase in advance tax payment to Rs 663 crore for the Q1 2008 over Q1 2007. Reliance Industries (RIL), reported 15% rise in advance tax paid to Rs 340 crore in Q1 2008 over Q1 2007.

Advance taxes are paid in four instalments, in June, September, December and March. Usually, the first instalment is 15% of the total tax estimated to be paid for the whole fiscal.

However crude oil striking record high just under $140 a barrel may dampen sentiment. Light, sweet crude for July delivery fell 25 cents to settle at $134.61 a barrel yesterday, on the New York Mercantile Exchange after earlier soaring to a trading record of $139.89.

Also caution will prevail in the coming day’s on fears that the Reserve Bank of India (RBI), as part of its efforts to contain rising inflation, would resort to more measures to make banks’ lending rates dearer.

Inflation, measured by wholesale price index (WPI), jumped to a 7-year high of 8.75% in the week to 31 May 2008, after rising 8.24% in the previous week. The negative impact of higher lending rates would rub off on the entire economy. Such concerns over slowdown in economic growth are expected to keep the market choppy in the near term.

Also high interest rates may delay expansion plans of corporates, which in turn may impact future earnings growth.

Asian markets were trading mixed today, 17 June 2008. Shanghai Composite was up 0.31% or 8.99 points at 2,883.09, Nikkei gained 0.13% or 18.51 points at 14,372.88, Hong Kong's Hang Seng rose 0.19% or 44.39 points at 23,074.08.

However, Taiwan's Taiwan Weighted fell 0.76% or 62.40 points at 8,107.37, Singapore's Straits Times slipped 0.39% or 11.80 points at 3,025.12 and South Korea's Seoul Composite declined 0.87% or 15.31 points at 1,745.51

US markets ended mixed in see-saw trade yesterday, 16 June 2008. A rally was sparked in banking stocks with Lehman Brothers declaring results in line with market expectations.

The Dow Jones industrial average lost 38.27 points, or 0.31%, to 12,269.08. The S&P 500 index gained 0.11 points, or 0.01%, to 1,360.14. The Nasdaq Composite index added 20.28 points, or 0.83%, to 2,474.78.

Earnings downgrades by brokerages amid rising input and interest costs for India Inc and drying up of global liquidity due to credit crisis remain major concern for the Indian stock market. A further hike in rates would impact bottomline of Indian companies.

Back home, the market ended on a firm note yesterday, 16 June 2008, on the back of firm global markets. The 30-share BSE Sensex rose 206.20 points or 1.36% at 15,395.82 and the broader based S&P CNX Nifty gained 55.4 points or 1.23% at 4572.50, on that day.

As per provisional data, foreign funds sold shares worth a net Rs 547.84 crore yesterday, 16 June 2008. Domestic funds bought shares worth a net Rs 293.05 crore on that day.

Foreign institutional investors (FIIs) were net buyers of Rs 59.33 crore in the futures & options segment yesterday, 16 June 2008. They were net buyers of index futures to the tune of Rs 180.49 crore and sold index options worth Rs 257.05 crore. They were net buyers of stock futures to the tune of Rs 131.73 crore and bought stock options worth Rs 4.16 crore.