Weak global cues may trigger lower opening

Local equities are geared to extend their losses for the fourth straight day today, 16 July 2008 amid weak global cues. However the sharp fall in crude oil may sooth some nerves. On the New York Mercantile Exchange, August crude settled down $6.44, or 4.44%, at $138.74 a barrel yesterday, 15 July 2008.

Sentiment may continue to remain cautious after the Fed Chairman Ben Bernanke yesterday, 16 July 2008 said that while the likelihood is high that the US economy would slow further, the outlook for inflation had also intensified, providing little comfort for investors and consumers struggling in stagflationary conditions.

Political uncertainty will also continue to take its toll on the market. The government is holding a two-day special session of parliament on 21 July 2008 and 22 July 2008 to seek vote of confidence after it was reduced to minority following withdrawal of support by Left parties on 8 July 2008. The government hopes to retain power due to backing from Samajwadi Party, a regional party in Uttar Pradesh.

Asian markets were trading lower today, 16 July 2008, mirroring Wall Street losses. Shanghai Composite was down 0.85% or 23.68 points at 2,755.77, Japan's Nikkei slipped 0.58% or 73.39 points at 12,681.17, Hong Kong's Hang Seng fell 0.33% or 69.62 points at 21,105.15, Taiwan Weighted plunged 0.67% or 45.49 points at 6,788.75, Singapore's Straits Times lost 0.20% or 5.61 points at 2,825.14 and South Korea's Seoul Composite declined 0.83% or 12.56 points at 1,496.77

US markets settled mixed yesterday, 15 July 2008, on worries about the success of the government plan to rescue mortgage finance companies Freddie Mac and Fannie Mae and to stabilise the financial sector. The Dow Jones industrial average declined 92.65 points, or 0.84%, to 10,962.54. The Standard & Poor's 500 index lost 13.39 points, or 1.09%, to 1,214.91, while the Nasdaq Composite gained 2.84 points, or 0.13%, to 2,215.71.

Back home, markets extended losses for the third straight day yesterday, 15 July 2008, after rumours of large-scale loan defaults by leading corporates sparked a sell-off. The 30-share BSE Sensex plunged 654.32 points or 4.91% to 12,676.19 and also registered a 15-month low, and the broader based S&P CNX Nifty tumbled 178.60 points or 4.42% at 3861.10, yesterday, 15 July 2008.

The BSE Sensex is down 7610.80 points or 37.51% in the calendar year 2008 so far from its close of 20,286.99 on 31 December 2007. It is 8530.58 points or 40.22% away from its all-time high of 21,206.77 struck on 10 January 2008.

As per provisional data, foreign funds sold shares worth a net Rs 702.70 crore while domestic funds bought shares worth a net Rs 283.40 crore yesterday, 15 July 2008.

Foreign institutional investors (FIIs) were net sellers of Rs 2250.15 crore in the futures & options segment on 15 July 2008. They were net sellers of index futures to the tune of Rs 2268.45 crore and sold index options worth Rs 83.84 crore. They were net sellers of stock futures to the tune of Rs 165.57 crore and sold stock options worth Rs 32.28 crore.