Market may drift lower

Reports that top companies and leading private sector lenders have reported a dip in advance tax payments in Q3 December 2008 may trigger profit taking after a recent solid surge in share prices. A subdued trend in Asian stocks may be another trigger for profit taking.

A fiscal stimulus package by the government, rate cuts by the central bank and buying by foreign funds has boosted the bourses in the past few days. From a recent low of 8,739.24 on 2 December 2008, the BSE Sensex jumped 1,093.15 points or 12.5% in the past eight trading sessions to 9,832.39 on Monday, 15 December 2008.

Barring mainly government-owned banks, private sector lenders and some of India’s largest companies have reported dips in advance tax payments for the October to December 2008 quarter.

Asian stocks fell on Tuesday, 16 December 2008, led by raw- materials companies and consumer-electronics makers, as the deepening global recession stifles the outlook for earnings.

US stocks fell on Monday, 15 December 2008, as New York state manufacturing data pointed to tumbling demand and more signs of economic weakness. The Dow Jones industrial average shed 65.15 points, or 0.75%, to end at 8,564.53. The Standard & Poor's 500 Index fell 11.16 points, or 1.27%, to 868.57. The Nasdaq Composite Index dropped 32.38 points, or 2% to 1,508.34.

Investors worried about potential heavy losses ahead of results from Goldman Sachs and Morgan Stanley after Merrill Lynch downgraded JPMorgan and forecast a fourth-quarter loss for the bank.