Firm global cues, easing inflation may trigger positive start

A steady decline in inflation for the fifth successive week and firm global markets will lift sentiment in early trade today, 31 October 2008, as trading resumes after a holiday. Derivative contracts for October 2008 series expired on Wednesday, 29 October 2008, with rollovers more or less similar to previous series. US light crude for December 2008 delivery fell over $2 today, 31 October 2008.

Inflation inched towards single digit with fifth successive week of decline. The wholesale price index (WPI)-based year-on-year inflation dropped to 10.68% in the week ended 18 October from 11.07% in the previous week. Following the steady decline in headline inflation, economists expect inflation to enter single digit domain by end-November 2008.

Derivative contracts for October 2008 series expired on Wednesday, 29 October 2008, with rollovers more or less similar to previous series. As per reports, marketwide rollover of positions was 76% while that of Nifty stood at 62% from October 2008 series to November 2007, by Tuesday, 28 October 2008. Marketwide rollover was 76% while Nifty rollover stood at 63% from September 2008 series to October 2008 series.

India Inc.’s report card for the September 2008 quarter so far shows a muted bottomline growth, due to ballooning interest cost. Aggregate results of 1322 companies showed a 1.8% fall in net profit on 29.90% increase in net sales in Q2 September 2008 over Q2 September 2007. Interest cost jumped 30.90% in Q2 September 2008 over Q2 September 2007.

Among the frontline companies - Bharti Airtel, Hindalco Industries, Tata Motors, DLF, Ranbaxy Laboratories, and Reliance Communications will declare their September 2008 quarterly results today, 31 October 2008.

Asian stocks were trading mixed today, 31 October 2008. China's Shanghai Composite was down 0.21% or 3.77 points at 1,759.82, Hong Kong's Hang Seng plunged 3.59% or 514.63 points at 13,815.22, Japan's Nikkei fell 2.72% or 245.64 points at 8,784.12, and Singapore's Straits Times was down 0.10% or 1.74 points at 1,800.17. However, South Korea's Seoul Composite advanced 0.21% or 2.32 points at 1,087.04 and Taiwan's Taiwan Weighted gained 1.58% or 73.78 points at 4,757.42.

US stocks climbed on Thursday, 30 October 2008 as investors snapped up shares trading near their lowest levels in five years on optimism that aggressive rate cuts by global central banks, including the Federal Reserve, will help cushion a worldwide economic downturn. The Dow Jones industrial average gained 189.73 points, or 2.11%, to 9,180.69. The S&P 500 index advanced 24 points, or 2.58%, to 954.09, while the Nasdaq Composite index surged 41.31 points, or 2.49%, to 1,698.52.

Global markets have rallied after the US Federal Reserve cut its main policy rate to 1% on Wednesday, 29 October 2008 to stave off the credit crunch. China cut rates earlier on Wednesday, 29 October 2008 with Taiwan and Hong Kong following up with rate cuts on Thursday, 30 October 2008.

Back home, the BSE 30-share Sensex gained 36.43 points or 0.4% to 9.044.51 and the S&P CNX Nifty rose 12.45 points or 0.46% to 2,697.05, in volatile trade on Wednesday, 29 October 2008.

Foreign institutional investors (FIIs) were net sellers worth Rs 1306.35 crore while mutual funds bought shares worth Rs 739.66 crore on Wednesday, 29 October 2008, according to provisional data on NSE.

FIIs were net buyers of Rs 2,197.07 crore in the futures & options segment on Wednesday, 29 October 2008. They were net buyers of index futures to the tune of Rs 1,340.41 crore and bought index options worth Rs 253.84 crore. They were net buyers of stock futures to the tune of Rs 606.07 crore while sold stock options worth Rs 3.25 crore.

US light crude for December 2008 delivery fell $1.46 to $64.50 a barrel today 31 October 2008 after weak U.S. economic data refocused attention on falling demand