Weak global cues may trigger lower opening

Key benchmark indices are likely to see lower opening tracking negative global cues. Also rise in crude oil prices from 3-month low and inflation topping the 12% mark may weigh on the sentiment.

Inflation, represented by the wholesale price index (WPI), rose 12.01% in the year-to-26 July 2008, slightly above the previous week’s 11.98%. It's the highest inflation in the last 13 years. The figures were released after market hours yesterday, 7 August 2008.

The Reserve Bank of India (RBI) is likely to continue with its tight monetary stance to counter the surge in headline inflation rate, C Rangarajan, chairman, Prime Minister’s Economic Advisory Council, said yesterday, 7 August 2008. He added that the inflation rate is likely to moderate to 8-9% by March 2009, which is still way higher than the central bank’s revised forecast of close to 7% for the current fiscal.

On the New York Mercantile Exchange, September crude gained $1.44 at $120.02 a barrel yesterday, 7 August 2008, as pipeline shutdown in Turkey due to an explosion raised supply worries.

Meanwhile, the European Central Bank and the Bank of England both left their benchmark interest rates unchanged at 4.25% and 5% respectively in a meeting scheduled yesterday, 7 August 2008, as they ponder how best to steer their economies between the shoals of mounting inflation and slowing growth.

Asian markets were trading mixed today, 8 August 2008. China's Shanghai Composite lost 0.42% or 11.36 points at 2,716.21, Japan's Nikkei was down 0.56% or 74.03 points at 13,050.96, Singapore's Straits Times fell 0.63% or 17.81 points at 2,816.90. However, Hong Kong's Hang Seng was up 0.04% or 7.95 points at 22,112.15, Taiwan's Taiwan Weighted gained 1.51% or 106.04 points at 7,130.62 and South Korea's Seoul Composite rose 0.41% or 6.35 points at 1,570.35

US stocks declined yesterday, 7 August 2008, after American International Group (AIG) posted its third consecutive quarterly loss of more than $5 billion, which fueled fears of more fallout from the credit crisis. Wal-Mart's cautious sales forecast added to concerns about consumer spending.

The Dow Jones Industrial Average slumped 224.64 points, or 1.93% to 11,431.43, the Standard & Poor's 500 index fell 23.11 points, or 1.79% to 1,266.08, while the Nasdaq Composite index dropped 22.64 points, or 0.95% to 2,355.73.

Back home, key benchmark indices finished with modest gains yesterday, 7 August 2008, after swinging sharply either ways. The BSE Sensex rose 43.71 points or 0.29% to 15,117.25 and the S&P CNX Nifty gained 6.3 points or 0.14% at 4523.85.

Foreign institutional investors (FIIs) were net equity sellers worth Rs 223.19 crore while mutual funds purchased shares worth Rs 24.10 crore yesterday, 7 August 2008, according to provisional data on NSE.

FIIs were net sellers of Rs 225.81 crore in the futures & options segment yesterday, 7 August 2008. They were net buyers of index futures to the tune of Rs 117.81 crore and sold index options worth Rs 69.66 crore. They were net sellers of stock futures to the tune of Rs 276.82 crore and bought stock options worth Rs 2.82 crore.