Market may open firm on positive Asian equities

Strong start in Asian indices on hopes for US plans to further help a strained financial system may spill over Indian bourses in opening trade. The SGX Nifty futures for March 2009 series jumped 42.50 points in Singapore. However volatility may remain high ahead of the expiry of March 2009 derivatives contracts for March 2009 series on Thursday, 26 March 2009.

Meanwhile in a move that could boost turnover market regulator Security and Exchange Board of India (Sebi) plans to introduce new derivative products like lower-value contracts on individual stocks in the domestic derivative market in a bid to encourage retail investors in the option and future market. The derivatives market review committee has recommended mini contract that would be fourth or a tenth in size of a normal derivative contract besides some measures to increase participation and liquidity in the market. Sebi's panel also recommend increase in tenure of longer-term options up to three years to attract more investors and bring transparency in the system.

The Sebi's derivatives market review committee's report released on Friday has also recommended making margining systems simpler. The committee has recommended that the margining system be made more straightforward through the introduction of portfolio-based and cross-margining systems.

Asian markets were trading higher today, 23 March 2009 on optimism that the US government stimulus efforts will revive lending and ease the global economic slump. Key benchmark indices in China, Hang Seng, Japan, Singapore, South Korea and Taiwan were up by between 1.24% and 3.01%.

US stocks declined on Friday, 20 March 2009 as the Federal Reserve's plan to rekindle consumer and small business lending fell short of expectations and General Electric was hit by analysts' bearish comments. The Dow Jones Industrial Average slipped 122.42 points, or 1.65%, to 7,278.38. The Standard & Poor's 500 Index shed 15.50 points, or 1.98%, to 768.54 and the Nasdaq Composite Index lost 26.21 points, or 1.77%, to 1,457.27.

According to provisional data on NSE, Foreign institutional investors (FIIs) were net sellers worth Rs 149.18 crore while mutual funds sold shares worth Rs 94.03 crore on Friday, 20 March 2009.