Market seen firm in lackluster trade

Key benchmark indices are likely to open firm tracking overnight gains in the US markets. However with no cues to look forward from Asian markets which are shut for trade on account of New Year celebrations, trade is expected to remain lackluster amid thin volumes.

Investors may take cues from inflation, a potential fuel price cut and an expected second economic stimulus package. Inflation data in the 12 months to 20 December 2008 will be released by noon today, 1 January 2008.

Profit booking after two-day gains pulled key benchmark indices lower on the last trading day of 2008. The BSE 30-share Sensex lost 68.85 points or 0.71% at 9647.31 and the S&P CNX Nifty lost 20.35 points or 0.68% at 2959.15 on Wednesday, 31 December 2008.

Back home, mutual funds bought shares worth Rs 373.96 crore while foreign institutional investors (FIIs) were net buyers worth Rs 81.85 crore on Wednesday, 31 December 2008, according to provisional data on NSE.

The BSE Sensex lost 10639.68 points or 52.44% in the calendar year 2008 from its close of 20,286.99 on 31 December 2007, ending Sensex's five-year bull run on global financial crisis. Nifty lost 3179.45 points or 51.79% in 2008.

The BSE Sensex saw a sustained bull run in the past five years gaining 47.10% in 2007, 46.7% in 2006, 42.3% in 2005, 13.1% in 2004, 73% in 2003 and 3.52% in 2002.

US stocks advanced on Wednesday, 31 December 2008 as the US Federal Reserve provided clarity on its plan to reduce mortgage costs and set a goal to buy $500 billion in mortgage-backed securities by mid-2009. The Dow Jones industrial average gained 108 points, or 1.25%, to 8,776.39. The NASDAQ composite increased 26.33 points, or 1.70%, to 1,577.03. The Standard & Poor`s 500 index climbed 12.61 points, or 1.42%, to 903.25.

Light, sweet crude for February delivery jumped $5.57 to $44.60 a barrel on the New York Mercantile Exchange on Wednesday, 31 December 2008.