August 2008 derivatives expiry to keep market volatile; inflation eyed

Key benchmark indices are braced for a choppy session today, 28 August 2008 ahead of the expiry of derivative contracts for August 2008 series and inflation data for the week ended 16 August 2008. Rise in crude oil prices may weigh on the bourses. Global cues were mixed.

As per reports, marketwide rollover of positions from August 2008 series to September 2008 series stood at 62% while that of Nifty was at 56%, as of Wednesday, 26 August 2008. The rollovers are in line with those in previous series.

Fears of a further monetary tightening by the Reserve Bank of India to rein in inflation which is at 16-year high may also haunt the bourses. The wholesale price index for the week ended 16 Aug 2008 which will be released after market hours today, 28 August 2008 is forecast to have risen to a fresh 16-year high.

On the New York Mercantile Exchange, October 2008 crude rose $1.88 at $118.15 per barrel, yesterday, 27 August 2008 on fears that Tropical Storm Gustav could interrupt oil and natural gas output in the Gulf of Mexico.

Asian markets were trading mixed today, 28 August 2008. Shanghai Composite was up by 0.87% at 2,362.57, Nikkei gained 0.06% at 12,760 and Straits Times rose 0.12% at 2,708.43.

However, Hang Seng fell 0.98% at 21,254.83, Seoul Composite lost 0.58% at 1,485.31 and Taiwan Weighted was down 0.24% at 7,064.

US stocks rose yesterday, 27 August 2008 as unexpectedly strong data on durable goods orders soothed concerns about the sluggish economy while Fannie Mae and Freddie Mac led a rally in financial shares. The Dow Jones industrial average gained 0.79% or 89.64 points, to 11502.51. The S&P 500 rose 10.15 points or 0.80% to 1,281.66. The Nasdaq Composite gained 20.49 points or 0.87% to 2382.46.

Foreign institutional investors (FIIs) were net equity sellers worth Rs 32.49 crore while mutual funds purchased shares worth Rs 163.27 crore on Wednesday, 27 August 2008, according to provisional data on NSE.

FIIs were net buyers of Rs 848.41 crore in the futures & options segment on Wednesday, 27 August 2008. They were net buyers of index futures to the tune of Rs 224.25 crore and purchased index options worth Rs 426.86 crore. They were net buyers of stock futures to the tune of Rs 166.95 crore and bought stock options worth Rs 30.35 crore.

Back home key benchmark indices fell sharply in late trade yesterday, 27 August 2008, snapping a three-day winning streak, on concerns of inflation touching new highs and ahead of August F&O series expiry. The BSE Sensex lost 185.43 points or 1.28% to 14,296.79 and the S&P CNX Nifty slipped 45.40 points or 1.05% at 4292.10.

The BSE Sensex is down 5990.20 points or 29.52% in the calendar year 2008 so far from its close of 20,286.99 on 31 December 2007. It is 6909.98 points or 32.58% away from its all-time high of 21,206.77 struck on 10 January 2008.