Equities seen range-bound on mixed cues

Local shares are likely to be witness range-bound activity today, 14 July 2008, tracking mixed cues from global shores. However crude oil hovering near record highs may dampen the sentiment.

Global investment banker Barclays Capital projecting inflation to surge to 17% by September 2008 on back of another round of hike in fuel prices in the same month may also play the spoilsport. The investment banker believes that wholesale price index inflation will remain in double-digit territory until May 2009.

Inflation based on the wholesale price index surged to a fresh 13-year high 11.89% in 12 months to 28 June 2008, above the previous week's annual rise of 11.63%, government data released on 11 July 2008 showed. This is much higher than the Reserve Bank's tolerance limit of 5.5% set for the current fiscal.

Crude oil for August delivery fell as much $1.01 to $144.07 a barrel in after-hours trading on the New York Mercantile Exchange on Friday, 11 July 2008.

Asian markets were trading firm today, 14 July 2008, led by advances in banking stocks after the US government unveiled measures to help the troubled home financing providers. Shanghai Composite rose 0.36% or 10.36 points at 2,866.99, Japan's Nikkei gained 1.12% or 146.21 points at 13,185.90, Hong Kong's Hang Seng advanced 0.51% or 113.57 points at 22,298.12, South Korea's Seoul Composite added 0.54% or 8.51 points at 1,576.02, Taiwan Weighted was down 0.21% or 14.91 points at 7,229.85 and Straits Times fell 0.53% or 15.52 points at 2,911.32

US markets ended volatile session on Friday, 11 July 2008, with the Dow Jones falling below the 11,000 level for the first time since August 2006. Growing concern about the health of Fannie Mae and Freddie Mac send bank shares to an 11-year low. The Dow Jones Industrial Average slumped 128.48 points to 11100.54 and the Nasdaq Composite shed 18.77 points at 2239.08. The Standard & Poor's 500 index dropped 13.90 points to 1,239.49.

Back home, the market slumped on Friday, 11 July 2008 as spiraling crude oil prices and weak economic data dampened investor sentiments. The 30-share BSE Sensex lost 456.39 points or 3.28% at 13,469.85 and the broader based S&P CNX Nifty was down 113.20 points or 2.72% at 4049, on that day.

The BSE Sensex rose 15.85 points or 0.12% to 13,469.86 in the week ended Friday, 11 July 2008. The S&P CNX Nifty edged up 33 points or 0.82% to 4,049 in the week.

From a record high of 21,206.77 hit on 10 January 2008, Sensex has lost 7736.92 points or 36.48%. It is down 6817.14 points or 33.60% in calendar year 2008 so far.

As per provisional data, foreign funds sold shares worth a net Rs 467.67 crore while domestic funds bought shares worth a net Rs 214.74 crore, on 11 July 2008.

Foreign institutional investors (FIIs) were net buyers of Rs 511.43 crore in the futures & options segment on 11 July 2008. They were net buyers of index futures to the tune of Rs 715.44 crore and sold index options worth Rs 221.49 crore. They were net sellers of stock futures to the tune of Rs 20.84 crore and purchased stock options worth Rs 38.31 crore.

Industrial production rose 3.8% in May 2008, much lower than revised 6.2% growth in April 2008, the government data released on 11 July 2008 showed. Industrial production growth for April 2008 revised downwards to 6.2% from earlier 7%.

Caution may prevail on the bourses in the near term due to political uncertainty as to whether the government will be able to win confidence vote in the parliament. Prime Minister Manmohan Singh is likely to seek a vote of confidence in parliament shortly following the Left’s withdrawal of support to the government over the India-US civil nuclear agreement. There is speculation that the government may choose a date around 22 July 2008 to call a special Lok Sabha session for the vote.