Market seen extending Monday's fall, RBI monetary policy eyed

Key benchmark indices are likely to extend Monday's fall on weak global cues. The SGX Nifty futures for April 2009 series lost 61.50 points in Singapore. The Reserve Bank of India's monetary policy meeting scheduled today, 21 April 2009, to review interest rates will be closely watched. Also companies that will be announcing their March 2009 quarterly results will see action.

With inflation slowing to around 20- year low in the first week of April 2009, analysts opine the central bank may cut interest rates further to boost slowing economy. The central bank's comments on the economic outlook, direction of interest rates and credit growth target will be closely watched by the market.

The central bank has cut its main short-term lending rate or repo rate by 400 basis points to 5% in five moves since October 2008.

Wholesale prices rose 0.18% in the week to 4 April 2009 from a year earlier after rising 0.26% the previous week, government data showed Thursday, 16 April 2009.

Hero Honda Motors, Rolta India, Seamec, Praj Industries, Spice Communications and UltraTech Cement among others will declare their March 2009 quarterly results today, 21 April 2009.

Also political uncertainty, with polling for India's 15th Lok Sabha underway, may lead to volatile swings on the bourses. The month-long parliamentary elections that began on 16 April 2009 will conclude on 13 May 2009 with results due on 16 May 2009. Poll estimates point to a fractured mandate.

Bank of America's concern took its toll on the Asian markets as well. Key benchmark indices in Hong Kong, China, Taiwan, Singapore, South Korea and Japan were down by between 0.50% and 3.44%.

US markets corrected sharply after Bank of America's rise in troubled loans reignited fears of the banking industry and the economy. The Dow Jones industrial average fell 289.60 points or 3.56%, Standard & Poor's 500 Index declined 37.21 points or 4.28% and Nasdaq Composite index declined 64.86 points or 3.88%.

Back home, profit booking is likely to continue after a recent solid rally, which saw the BSE 30-share Sensex surging 35.08% or 2862.69 points to 11,023.09 on 17 April 2009 from a 3-year closing low of 8,160.40 on 9 March 2009.

Key benchmark indices took a breather on Monday, 20 April 2009 on profit booking after a recent solid surge. Weak global cues also played the spoilsport. The BSE 30-share Sensex fell 43.59 points or 0.4% to 10,979.50 and the S&P CNX Nifty was down 7.30 points or 0.22% to 3,377.10, in what was a highly choppy trading session.

However the market sentiment remains firm due to sustained buying by foreign funds after heavy outflows in the first two months of calendar 2009. According to provisional data on NSE, foreign institutional investors (FIIs) were net buyers worth Rs 348.05 crore while domestic institutional investors funds bought shares worth Rs 108.90 crore on Monday, 20 April 2009.

FII inflow in April 2009 totaled Rs 4,277.10 crore (till 17 April 2009) cutting their outflow in calendar year 2009 to Rs 2,394.60 crore.