Market to extend losses

The market is likely extend Wednesday’s (22 October 2008)’ steep slide as weak Asian markets will offset relaxation of overseas borrowing norms for corporates. With sentiments edgy due to global financial sector crisis, expectation of a further fall in inflation may do little to stem the slide.

The Q2 results of Reliance Industries (RIL), India’s biggest private sector firm and oil refiner, due today, hold key at a time when there are concerns of fall in refining margins. Q2 earnings remains a mix bag so far. After trading hours on Wednesday, TCS reported fall in net profit in Q2 September 2008 over Q1 June 2008, due to hedging loses and provisions for doubtful debts.

Asian stocks fell to a 4-year low on growing fears a global recession would depress corporate earnings. Key benchmark indices in Hong Kong, Japan, South Korea, Singapore, China and Taiwan were down by between 2.6% to 9.2%.

According to the new rules notified by the Reserve Bank of India, external commercial borrowings up to $500 million per borrower per financial year would be permitted for rupee expenditure or foreign currency expenditure for permissible end uses under the automatic route. Indian companies can also pay higher interest rate of up to 500 basis points over the six-month libor on external commercial borrowing.

The government will today release data on inflation for the year through 11 October 2008. Inflation is seen falling further in line with the trend witnessed in recent weeks.

The domestic bourses tumbled on Wednesday on weak global markets and on cautious outlook by IT firm Wipro. The BSE 30-share Sensex lost 513.49 points or 4.81% to 10,169.90

weak global markets, cautious outlook by IT firm Wipro