Indices set to rally on strong global cues

A rally across the globe on hopes for a more comprehensive US government approach in taming the global credit crisis is likely to propel key benchmark indices today, 19 September 2008. However latest data showing rise in inflation may dampen the sentiment.

The wholesale price index rose 12.14% in the 12 months to 6 September 2008, marginally above the previous week's rise of 12.10%, data released after market hours on Thursday, 18 September 2008 showed.

Light, sweet crude for October 2008 delivery added 72 cents to settle at $97.88 a barrel on Thursday, 18 September 2008 on the New York Mercantile Exchange.

Meanwhile, speaking on the financial crisis, the US President George W Bush defended the government's actions over the last few days and said that the market may take a while to normalize. George W Bush added that in recent weeks the Federal Government has taken extraordinary measures to address the challenges confronting financial markets.

Asian markets rallied today, 19 September 2008. China's Shanghai Composite gained 9.40% or 178.14 points at 2,073.97, Hong Kong's Hang Seng was up 6.13% or 1081.39 points at 18,713.85, Japan's Nikkei rose 3.30% or 378.90 points at 11,868.20, Singapore's Straits Times advanced 4.01% or 97.10 points at 2,516.31, South Korea's Seoul Composite surged 4.60% or 63.99 points at 1,456.41, and Taiwan's Taiwan Weighted added 5.40% or 304.58 points at 5,946.53.

US markets recorded biggest one-day percentage gain since October 2002 after the US Treasury Secretary Henry Paulson proposed to congressional lawmakers that would create an entity to deal with the billions of dollars of bad debt still choking the financial system. The Dow Jones industrial average jumped 410.03 points, or 3.86%, to 11,019.69. The S&P 500 index advanced 50.12 points, or 4.33%, to 1,206.51, and the Nasdaq Composite index surged 100.25 points, or 4.78%, to 2,199.10.

Back home, short covering in index heavyweights towards the fag end of the session helped key benchmark indices post small gains on Thursday, 18 September 2008 after a dismal start. The BSE 30-share Sensex rose 52.70 points or 0.4%, to close at 13,315.60 and the S&P CNX Nifty rose 29.90 points or 0.75% at 4038.15.

The BSE Sensex had lost 1682.07 points or 11.25% in seven consecutive trading sessions from a recent high of 14,944.97 on 8 September 2008 to 13,262.90 on Wednesday, 17 September 2008.

Foreign institutional investors (FIIs) were net equity sellers worth Rs 1201.64 crore while mutual funds bought shares worth Rs 1192.20 crore on Thursday, 18 September 2008, according to provisional data on NSE.

FIIs were net buyers of Rs 995.58 crore in the futures & options segment on Thursday, 18 September 2008. They were net buyers of index futures to the tune of Rs 511.58 crore and bought index options worth Rs 461.71 crore. They were net buyers of stock futures to the tune of Rs 44.20 crore and sold stock options worth Rs 21.91 crore.