Market seen upbeat, domestic institutional activity may rise

Key benchmark indices are likely to extend two day gains on positive global cues. Domestic institutions may turn active today to boost yearly net asset values.

However trading may turn remain lacklustre with high volatility amid the ongoing holiday season and festivities across the world, which is likely to impact trading volumes at the bourses. Mutual funds bought shares worth Rs 375.65 crore while foreign institutional investors (FIIs) were net buyers worth Rs 214.95 crore on Tuesday, 30 December 2008, according to provisional data on NSE.

Interest rate sensitive sectors led the rally on the bourses for the second running day on Tuesday, 30 December 2008 on hopes of further cut in interest rates by the central bank and on a likely second government stimulus package for the economy. The BSE 30-share Sensex advanced 182.64 points or 1.92% at 9716.16 and the S&P CNX Nifty advanced 57.30 points or 1.96% at 2979.50.

Most Asian markets were trading higher today, 31 December 2008 as higher metals prices boosted commodities' companies. Hong Kong's Hang Seng rose 0.84% or 19.97 points at 14,355.47, Singapore's Straits Times was up 0.21% or 3.66 points at 1,774.31, and Taiwan's Taiwan Weighted advanced 0.14% or 6.33 points at 4,595.37. However, China's Shanghai Composite was down 0.85% or 15.60 points at 1,817.31.

US stocks ended higher on Tuesday, 30 December 2008 after the government expanded its bailout of the auto industry, bolstering hopes that lawmakers would continue to take steps to minimise the severity of the year-long recession. The Dow Jones Industrial Average rose 184.46 points, or 2.17%, at 8,668.39. The Standard & Poor's 500 Index gained 21.22 points, or 2.44%, at 890.64 and the Nasdaq Composite Index advanced 40.38 points, or 2.67%, at 1,550.70.

US crude fell 28 cents to $38.75 a barrel, while London Brent dropped 20 cents to $39.95 today, 31 December 2008 with a rapid reversal in the economic outlook having brought it crashing back from a mid-year record high.