Market may open lower tracking weak Chinese stocks

The key benchmark indices may open lower tracking weakness in Chinese stocks. The investors may also take home some cash after recent surge in indices. However, slight improvement in progress of India's annual monsoon may provide support to market.

Volatility ruled the roost on Thursday 27 August 2009 as the key benchmark indices notched up small gains as traders rolled over positions in the derivatives segment from August 2009 series to September 2009 series. The market rose for the sixth straight day in a row. The BSE 30-share Sensex was up 11.22 points or 0.07% to 15,781.07 on Thursday. The market has surged in the past six days supported by positive global cues. The BSE Sensex has risen 971.43 points or 6.55% to 15,781.07 on Thursday, 27 August 2009 from 14,809.64 on 19 August 2009.

As per provisional data, foreign funds on 27 August 2009, sold shares worth a net Rs 41.47 crore. Domestic funds bought shares worth a net Rs 29.22 crore

India's monsoon rains were 5 % below average in the week to 26 August 2009, coming in close to normal for the second successive week after a prolonged dry spell, the Meteorological Department said on Thursday. Rainfall since 1 June to 26 August was 25 % below normal, improving slightly from a deficit of 26 % a week earlier. More than two-thirds of the people live in villages and 60% of the farm land depends on the annual rains.

India's deficient monsoons may affect the inflation outlook more than growth prospects, the Reserve Bank said on Thursday, adding that prolonged expansionary fiscal and monetary policies threatened to push up prices and eventually crimp growth.

Asian stocks were mixed today. The key benchmark indices in China, Hong Kong and Singapore fell by between 0.23% to 2.55%. The key benchmark indices in Taiwan and South Korea rose by between 0.32% to 1.56%.

Japan's Nikkei rose 0.54% even as Japan's unemployment rate rose to a record 5.7 % in July 2009 and deflation worsened, dealing a blow to Prime Minister Taro Aso on the eve of an election that polls indicate his ruling Liberal Democratic Party will lose.

The US markets closed with modest gains on Thursday, 27 August 2009 helped by a late rally among bank stocks as well as higher oil prices.

The Dow rose 37.11 points, or 0.4%, to close at 9,580.63. The S&P 500 index rose 2.86 points, or 0.3%, to 1,030.98, while the Nasdaq Composite Index rose 3.30 points, or 0.2%, to 2,027.73.

In economic news, preliminary second quarter GDP report showed a better-than-expected 1% annualized decline. Consumer spending during the second quarter also topped expectations by contracting 1%.

Initial jobless claims came in at 5,70,000, which is down 10,000 from the previous week and essentially in-line with expectations. Meanwhile, continuing claims came in at 6.13 million, below expectations and down more than 100,000 from the previous week.