Market likely to see strong opening

Strong global cues and a fall in crude oil prices below $122 per barrel may trigger a strong opening in early trade today, 30 July 2008. New York's main contract, light sweet crude for September delivery slumped $2.54 to $122.19 a barrel on the New York Mercantile Exchange yesterday, 29 July 2008.

In the near term, the market trend is likely to dictated by slew of events like expiry of futures & options contracts on Thursday, 31 July 2008. Besides, the progress of the monsoon and corporates quarterly numbers will also be keenly watched.

Among the frontline companies, Mahindra & Mahindra, Tata Motors, Suzlon Energy, Unitech and ITC will declare their June 2008 quarterly results.

Volatility may remain high ahead of the expiry of futures & options contracts for July 2008 series on Thursday, 31 July 2008. As per reports, marketwide rollover of positions from July 2008 series to August 2008 series stood at 44%, while that of Nifty was 48%, as of Tuesday 29 July 2008.

Asian markets were trading higher today, 30 July 2008. China's Shanghai Composite rose 0.55% or 15.72 points at 2,866.03, Japan's Nikkei gained 1.19% or 156.26 points at 13,315.71, Hong Kong's Hang Seng added 1.66% or 369.18 points at 22,627.18, Taiwan's Taiwan Weighted advanced 0.64% or 44.83 points at 7,059.30, Singapore's Straits Times was up 1.01% or 29.11 points at 2,915.67 and South Korea's Seoul Composite surged 0.65% or 10.20 points at 1,577.40

Wall Street shares surged overnight, benefiting from a steep drop in oil prices and an unexpected rise in US consumer confidence after Merrill Lynch's announcement of yet another write-down and capital-raising exercise raising hopes that the turning point in the yearlong credit crisis was close.

The Dow Jones Industrial Average rose 266.48 points, or 2.39 per cent, at 11,397.56, the Standard & Poor's 500 Index gained 28.82 points, or 2.33 per cent, at 1,263.19 and the Nasdaq Composite Index rose 55.40 points, or 2.45 per cent, at 2,319.62.

Back home, the key benchmark indices slumped sharply yesterday, 29 July 2008 after the Reserve Bank of India (RBI) raised cash reserve ratio (CRR) by 25 basis points and repo rate by 50 basis points at quarterly review of the monetary policy. The 30 share BSE Sensex plunged 557.57 points or 3.89% at 13,791.54 and the broader based S&P CNX Nifty was down 142.25 points or 3.28% at 4,189.85, on that day.

The barometer index BSE Sensex is down 6,495.45 points or 32.01% in the calendar year 2008 so far from its close of 20,286.99 on 31 December 2007. It is 7,415.23 points or 34.96% away from its all-time high of 21,206.77 struck on 10 January 2008.

As per the provisional figures foreign institutional investors (FII)'s sold shares worth Rs 538.27 crore while domestic funds sold shares worth Rs 254.59 crore yesterday 29 July 2008.

Foreign institutional investors (FIIs) were net sellers of Rs 1939.47 crore in the futures & options segment on 28 July 2008. They were net sellers of index futures to the tune of Rs 1166.31 crore and bought index options worth Rs 81.46 crore. They were net sellers of stock futures to the tune of Rs 883.85 crore and purchased stock options worth Rs 29.22 crore.

The Reserve Bank of India (RBI) yesterday 29 July 2008, raised repo rate by 50 basis points to a seven-year high of 9% to curb inflation, now running close to 12%, and dampen inflationary expectations. The RBI also raised the cash reserve ratio (CRR), the proportion of funds that banks must keep on deposit with it, by 25 basis points to 9%. The central bank left its reverse repo and bank rates unchanged. The tone of the monetary policy was extremely hawkish.