Market to track global equities

Global markets are more likely to influence the domestic bourses. Volumes may take a hit in the truncated trading week as the market remains closed on Thursday, 30 October 2008, on account of Bhaubeez. On Tuesday, 28 October 2008, market will be open for just one hour from 18:15 IST to 19:15 IST for Muhurat trading to mark the beginning of the Samvat Year 2065.

Global stocks tumbled to a new five-year low, last week, as investors withdrew from equity markets on worries that global economic slowdown may hurt corporate profitability. UK’s Gross domestic product dropped 0.5% between July and September, the first contraction in 16 years, the Office for National Statistics said today, 24 October 2008 in London. The official definition of a recession is two consecutive quarters of negative growth.

Volatility is likely to remain high as derivative contracts for October 2008 series expire on Wednesday, 29 October 2008. As per reports, Nifty had seen 37% rollover of positions from October 2008 series to November 2007, by Thursday, 23 October 2008.

The market sentiment has been badly hit by a sustained selling by foreign institutional investors (FIIs). They have been pulling out their investments from India and other emerging markets to shore up resources to beat the global liquidity crunch. In India, FII were net sellers of Rs 11,736.10 crore in October 2008 so far, till 22 October 2008, with their outflow amounting to Rs 48,527.90 crore in calendar 2008.

On the other hand, mutual funds have been buying. Their net inflow in October 2008 totaled Rs 708.90 crore, this month, till 22 October 2008.

India Inc.’s report card for the September 2008 quarter so far shows a muted bottomline growth, partly due to a surge in interest cost. Aggregate results of 652 companies showed a 7.2% rise in net profit on 29% increase in net sales in Q2 September 2008 over Q2 September 2007. Interest cost jumped 35.7% in Q2 September 2008 over Q2 September 2007

Among the frontline companies State Bank of India, Tata Power Company, Mahindra & Mahindra, Cairn India, Oil & Natural Gas Corporation, Tata Motors and Unitech will announce their September 2008 quarterly results.

Among the others companies, GMR Infrastructure, Reliance Capital, Kotak Mahindra Bank, Bharat Petroleum Corporation, Jindal Steel & Power, National Aluminium Company, Bombay Dyeing, Glenmark Pharmaceuticals, will declare their September 2008 quarterly results