Market seen range-bound on mixed global cues; inflation data eyed

Market is expected to remain range-bound on mixed global cues from global shores. However high intra-day volatility may not be ruled out as inflation data for the year through 7 February 2009 will be announced during the day. The SGX Nifty futures for February 2009 series was down 3 points in Singapore.

Inflation based on the whole sale price index rose 4.39% the year through 31 January 2009, much lower than previous week's annual rise of 5.07%, government data released on 12 February had showed.

On Wednesday, 18 February 2009, the Reserve Bank of India (RBI) governor D Subbarao said the impact of the global recession on India was sharper than expected. His comments stoked speculation of more interest rates cuts to shield the domestic economy from the global financial sector crisis and recession in key global economies.

Market men see a bigger role for RBI to shield the domestic economy from the global financial sector crisis and recession in key global economies in the coming months as election code will be in force by the end of the month which means that there cannon be any policy action from the government.

Asian markets were trading mixed today, 19 February 2009, as investors remained wary due to deepening recession worries in the United States and Japan. China's Shanghai Composite gained 0.51% or 11.16 points at 2,221.03 and Japan's Nikkei rose 0.50% or 37.93 points at 7,572.37. Hong Kong's Hang Seng declined 0.82% or 106.89 points at 12,909.11, Singapore's Straits Times fell 1.23% or 20.38 points at 1,630.68, South Korea's Seoul Composite slipped 0.76% or 8.48 pointgs at 1,104.71 and Taiwan's Taiwan Weighted was down 0.53% or 24.04 points at 4,474.33.

The S&P 500 and Nasdaq edged lower on Wednesday, 18 February 2009 after bleak housing data overwhelmed President Barack Obama's $275 billion plan to prop up the housing market. The Dow eked out a slight gain.

Adding to the somber mood, the Federal Reserve slashed its economic forecast for 2009, and several companies, including Deere & Co, posted dismal results. The Dow Jones industrial average was up 3.03 points, or 0.04%, to 7,555.63 while the Standard & Poor's 500 Index was down 0.75 points, or 0.10%, to 788.42 and the Nasdaq Composite Index slipped 2.69 points, or 0.18%, to 1,467.97.

Back home, key benchmark indices saw divergent trend in what was a highly volatile trading session, influenced by trend in global markets. While the 30-share BSE Sensex fell, the broader based S&P CNX Nifty rose powered by gains in non-Sensex stocks. The BSE 30-share Sensex fell 19.82 points or 0.22%, to 9,015.18 and the broader based S&P CNX Nifty rose 5.65 points or 0.20% at 2776.15.

According to provisional data on NSE, FIIs were net sellers worth Rs 288.45 crore while mutual funds bought shares worth Rs 102.34 crore on Wednesday, 18 February 2009.