Market likely to see choppy trade, inflation data eyed

Local benchmark indices are headed for a volatile trading session today, 21 August 2008 ahead of the release of inflation data for the year through 9 August 2008. The data will be released after trading hours today, 21 August 2008. Global cures were mixed.

Inflation as measured by wholesale price index rose 12.44% in the week to 2 August 2008, a 16-year high propelled by rise in the cost of pulses, fruits, spices and aviation turbine fuel.

Inflation is expected to accelerate further after the Prime Minister Manmohan Singh's cabinet on 14 August 2008 approved an average 21% salary increase for about 50 lakh government employees. The higher wages will cost the government Rs 3.38 lakh crore this year.

Another key event is the Nuclear Suppliers Group (NSG) meet scheduled today, 21 August 2008. The United States is set to push the 45-nation Nuclear Suppliers Group (NSG) to agree on a landmark nuclear deal with India despite objections at home and reservations abroad.

Light, sweet crude for September delivery rose 45 cents to $114.98 a barrel yesterday, 20 August 2008, on the New York Mercantile Exchange (NYMEX), on fresh supply concerns after key producer Venezuela indicated it could ask organisation of petroleum exporting countries (OPEC) to cut output.

Asian markets were trading lower today, 21 August 2008. China's Shanghai Composite fell 1.44% or 36.36 points at 2,486.91, Japan's Nikkei slipped 0.35% or 44.56 points at 12,807.13, Hong Kong's Hang Seng plunged 1.48% or 309.44 points at 20,621.82, Taiwan's Taiwan Weighted tumbled 1.12% or 78.95 points at 6,961.95, Singapore's Straits Times was down 0.70% or 19.31 points at 2,732.44, and South Korea's Seoul Composite lost 1.21% or 18.65 points at 1,522.06

US stocks gained on Wednesday, August 20, after a volatile session on the seesawing price of oil and mixed feelings about the financial sector. The Dow Jones industrial average rose 68.88 points, or 0.61%, to 11,417.43. The Nasdaq Composite index rose 4.72 points, or 0.20%, to 2,389.08 and the Standard & Poor's 500 Index was up 7.94 points, or 0.63%, at 1,274.63.

Back home, the market ended with decent gains yesterday, 20 August 2008, after sliding in the previous five trading sessions. The BSE 30-share Sensex rose 134.50 points or 0.92% to 14,678.23 and the S&P CNX Nifty rose 47.50 points or 1.09% to 4,415.75, on that day.

The BSE Sensex is down 5,608.76 points or 27.64% in the calendar year 2008 so far from its close of 20,286.99 on 31 December 2007. It is 6,528.54 points or 30.78% away from its all-time high of 21,206.77 struck on 10 January 2008.

Foreign institutional investors (FIIs) were net equity sellers worth Rs 447.34 crore while mutual funds purchased shares worth Rs 205.60 crore on Wednesday, 20 August 2008, according to provisional data on NSE.

FIIs were net buyers of Rs 350.96 crore in the futures & options segment on Wednesday, 20 August 2008. They were net buyers of index futures to the tune of Rs 405.94 crore and purchased index options worth Rs 330.26 crore. They were net sellers of stock futures to the tune of Rs 391.82 crore and bought stock options worth Rs 6.57 crore.

Meanwhile, the National Stock Exchange (NSE) will launch trading in currency futures from 29 August 2008. For the first time in India, it would be now possible to trade on the currency futures on a stock exchange platform. Currency futures are standardised foreign exchange contracts traded on a recognised stock exchange to buy or sell one currency against another on a specified future data, at a price specified on the purchase or sale data.