Markets likely to weaken at start

Headlines for the day:

Bank of Rajasthan to merge with ICICI Bank

Japan steel maker's plan to buy stake in JSW comes close

Steel firms prepare to ease prices on market signals

Events for the day:

Major corporate action

Mandhana Industries to be list today
Ex-date for dividend of Sterlite Industries
Results: Rural Electrification Corporation
For more events, log on to Sharekhan.com

Pre-market report

Global signals

The European shares rose on Tuesday, snapping two consecutive days of falls as sovereign debt fears waned after Greece received funds from the European Union to repay its immediate debt.

The US stocks sank on Tuesday, driven lower as the strengthening of financial regulation from Wall Street to Frankfurt crushed banking stocks, adding to worries about the sustainability of the global economic recovery.

In today's trade, the Asian markets were trading in red, following the Wall Street losses. At the time of writing this report, SGX Nifty was trading 77 points lower.

Indian markets

The Greece gets their first $18 billion bailout package from European Union to rescue it from the debt default, these relieved some fears in the Euro-zone, which led to positive closing in the European markets. The drop in US stocks came as the euro fell to a four-year low against the dollar on continued fear that European authorities wouldn't be able to contain the region's fiscal and debt problems. The Asian markets were lower after Wall Street dropped on Germany's decision to ban naked short selling in certain financial instruments, with the resulting drop in the euro weighing on exporters around the region. Following the negative cues set by the Asian markets, the Indian indices are set to have a gap-down start.

The scrip specific action can be seen from companies like Rural Electrification Corporation , who will be reporting its results today, and some movements in Bank of Rajasthan and ICICI Bank as they are set to merge. Also there is a new listing on the bourses today, Mandhana Industries, a vertically integrated textile and garment manufacturing company. Its issue price has been fixed at Rs130 per share, at higher end of price band of Rs120-130.

In terms of events, the latest gross domestic product data will be out on May 31, 2010. Monsoon’s progress will also have some bearing on market mood in the near term.

Commodity cues

In the commodity space, the crude oil prices slipped to a 7 month low Tuesday as the dollar neared a new four-year high against the euro, with the Nymex light crude oil for the June series decreased by $0.67 per barrel, whereas in the metals space, the Comex Gold for the June series dipped by $13.40 and the Comex Silver for the June series was up by $0.02 to a troy ounce respectively.

Daily trend of FII/MF investment in equities

On May 18, 2010, the foreign Institutional Investors (FIIs) were the net sellers of the Indian stocks to the tune of Rs1,031.60 crore, whereas the domestic mutual funds, on May 14, 2010, were the net sellers of the stocks to the tune of Rs205.50 crore.