Market may surge on strong global cues

Key benchmark indices are likely to see a strong start following Citigroup's bailout plan and the US President-elect Barack Obama promising to take extraordinary policy responses to save the world's largest economy from a major financial crisis. Sentiment across the globe improved after the US government said it is prepared to lend more than $7.4 trillion on behalf of American taxpayers to rescue the financial system. The SGX November 2008 Nifty futures were up 120 points.

However volatility may rise in the coming days ahead of the derivatives expiry for November 2008 series on Thursday, 27 November 2008. As per reports, rollover of Nifty positions from November 2008 to December 2008 series stood at 30%, as on Monday, 24 November 2008.

Asian markets surged today, 25 November 2008, after the US rescue of Citigroup bolstered badly needed confidence in the broader banking sector. China's Shanghai Composite was up 0.51% or 9.65 points at 1,906.71, Hong Kong's Hang Seng surged 4.57% or 569.13 points at 13,027.07, Japan's Nikkei gained 4.24% or 335.29 points at 8,246.08, Singapore's Straits Times advanced 3.74% or 60.66 points at 1,680.95, South Korea's Seoul Composite rose 4.38% or 42.53 points at 1,012.67 and Taiwan's Taiwan Weighted added 3.71% or 154.25 points at 4,314.79.

US markets posted the biggest two- day rally since 1987 on Monday, 24 November 2008 after the US government's rescue plan for Citigroup. That includes a direct $20 billion investment and $306 billion in asset guarantees. The Dow Jones Industrial Average jumped 396.97 points, or 4.93%, to 8,443.39. The S&P 500 index rose 51.78 points, or 6.47%, to 851.81, and the Nasdaq Composite index surged 87.67 points, or 6.33%, to 1,472.02.

As part of the new economic team, Obama named New York Federal Reserve President Tim Geithner as US Treasury Secretary and former Treasury Secretary Larry Summers as chief of the National Economic Council. Both men, particularly Geithner, are considered aggressive in using government tools to handle economic problems.

Back home, the two key benchmark indices the BSE Sensex and the S&P CNX Nifty witnessed a divergent trend in highly choppy trade on Monday, 24 November 2008. The BSE 30-share Sensex was down 12.09 points or 0.14%, to 8,903.12 and the S&P CNX Nifty gained 14.80 points or 0.55% to 2708.25.

Foreign institutional investors (FIIs) were net sellers worth Rs 560.83 crore while mutual funds bought shares worth Rs 224.90 crore on Monday, 24 November 2008, according to provisional data on NSE.

US light crude for January 2009 delivery fell 56 cents to $53.94 a barrel after a rebound in equity markets, having rebounded sharply from the 3- year low of $48.25 it hit on Friday, 21 November 2008.