Market seen opening lower on global cues

Weak global markets on the back of poor economic data may take its toll on key benchmark indices in opening trade. High volatility may not be ruled out either. However buying from domestic institutional investors may cushion sharp fall.

Asian markets were trading
lower today, 30 January 2009 as a record crash in Japanese production and lower profit forecasts fueled anxiety among investors that the global recession is expanding. Hong Kong's Hang Seng plunged 1.20% or 157.71 points at 12,996.72, Japan's Nikkei slipped 3.35% or 276.19 points at 7,975.05, Singapore's Straits Times declined 1.24% or 21.99 points at 1,744.73 and South Korea's Seoul Composite was down 0.51% or 5.99 points at 1,160.57.

US stocks slumped on Thursday, 29 January 2009, after weaker than expected jobless claims, new home sales and manufactured goods` orders and amid concerns over company earnings. The Dow Jones industrial average declined 226.44 points, or 2.70%, to end at 8,149.01. The Standard & Poor`s 500 index slipped 28.95 points, or 3.31%, to settle at 845. The Nasdaq Composite index fell 50.50 points, or 3.24%, to 1,507.84.

Poor economic data took its toll on global markets. US initial jobless claims surged to a record, rising by 3,000 last week to 588,000. Also the US Durable-goods orders edged lower for the fifth consecutive month; declining 2.6% in December 2008. US new-home sales fell to an all-time low; tumbling 14.7% to 331,000 annual rate, the slowest pace on record. Japan's factory output slumped 9.6% in December 2009.

Back home, Sun Pharmaceuticals, Titan Industries, Mundra Port & Special Economic Zone, Colgate Palmolive India among others will declare their December 2008 quarterly results today, 30 January 2009. Meanwhile, aggregate results of 1415 companies showed 26.90% fall in net profit on 14.60% increase in sales in Q3 December 2008 over Q3 December 2007. The street was already anticipating poor Q3 December 2008 earnings from Indian Inc on high input costs, the credit crunch and high interest rates, coupled with the burden of piled-up inventories.

Volatility was high as futures & options contracts for January 2009 series expired on Thursday, 29 January 2009. Rollover of positions was more or less in line with that in the previous series. As per reports, rollover of Nifty positions from January 2009 series to February 2009 series was 66%, from 66.50% during previous series. Marketwide rollover of positions was 75%, from 76% earlier.

Key benchmark indices ended slightly lower on Thursday, 29 January 2009 snapping two-day gains, in what was a highly volatile trade. The BSE 30-share Sensex was down 21.19 points, or 0.23%, to 9,236.28 and the S&P CNX Nifty fell 25.55 points, or 0.9%, to 2,823.95, on that day.

Foreign institutional investors (FIIs) are in selling mode after an inflow of Rs 1319.10 crore in December 2008. Their outflow in January 2009 totaled Rs 4508.80 crore (till 28 January 2009).

According to provisional data on NSE, FIIs were net sellers worth Rs 84.64 crore while mutual funds bought shares worth Rs 580.11 crore on Thursday, 29 January 2009.