Market may open higher

Key benchmark indices are likely to open firm on a likely second round of government stimulus package to pump prime the ailing economy and on expectations of a further fall of key policy rates with the inflation rate dropping to a nine-month low. However volatility may rise ahead of the December series F&O contracts expiry on Wednesday, 24 December 2008.

Global cues were mixed despite the US President George W Bush announcing a baiout for US automakers on Friday with $17.4 billion in emergency loans to stave off a collapse that would have cost hundreds of thousands of jobs. But Bush attached a string of conditions to the 3-year loans and set an end-March deadline for General Motors Corp and Chrysler LLC to prove they can restructure enough to ensure their survival or have the loans called back.

Asian markets were trading mixed today, 22 December 2008. China's Shanghai Composite was down 1.14% or 22.93 points at 1,995.53, Hong Kong's Hang Seng slipped 0.85% or 129.05 points at 14,998.46, Singapore's Straits Times fell 0.19% or 3.44 points at 1,792.03, Taiwan's Taiwan Weighted declined 0.54% or 25.35 points at 4,669.17. However, Japan's Nikkei gained 1.42% or 121.90 points at 8,710.42 and South Korea's Seoul Composite was up 0.82% or 9.73 points at 1,190.70.

US markets pared early gains driven by the $17.5 billion auto bailout plan to settle on a mixed note on Friday, 19 December 2008. The Dow Jones Industrial Average slipped 25.88 points, or 0.30% to 8,579.11. But the Standard & Poor's 500 Index rose 2.60 points, or 0.29% to 887.88 and the Nasdaq Composite Index added 11.95 points, or 0.77% to 1,564.32.

Back home, as per reports, rollover of Nifty positions from December 2008 series to January 2009 series stood at 31% as of Friday, 19 December 2008.

Also there is a possibility of dip in trading volumes due to a likely decline in foreign institutional participation on account of the Christmas and New Year celebrations. In that case, domestic institutions are expected to play a key role in determining the market direction. Market remains closed on Thursday, 25 December 2008 on account of Christmas.

Key benchmark indices rebounded from day's low in late trade on Friday, 19 December 2008, triggered by expectations of a second government stimulus package for the economy and on hopes of further cut in interest rates by the central bank. The BSE 30-share Sensex rose 23.48 points, or 0.23%, to 10,099.91 and the S&P CNX Nifty was up 16.75 points, or 0.55%, to 3,077.50, on that day.

Foreign institutional investors (FIIs) were net buyers worth Rs 378.43 crore while mutual funds bought shares worth Rs 410.85 crore on Friday, 19 December 2008, according to provisional data on NSE.