Flat to negative start likely; Weekly inflation eyed

Headlines for the day:

Fotis may overcome Khazanah hurdle in Parkway buy

Essar Shipping plans $250 million FCCB issue

SAIL in talks with kobe for technology alliance



Events for the day:

Major corporate action

Aster Silicates IPO opens today
Weekly inflation to be announced today
F&O expiry for the month of June
For more events, log on to Sharekhan.com

Pre-market report

Global signals

European shares slipped on Wednesday (June 23, 2010) on renewed concerns over global growth after the US new home sales hit a record low, with commodities and banks falling as investors stayed clear of riskier stocks.

The US stocks mostly fell in a volatile session on Wednesday after the Federal Reserve downgraded its assessment of the economic recovery as it vowed to keep cheap money flowing.

The Asian markets were trading on a flat note after Fed’s move. SGX Nifty was trading 13.5 points lower.

Indian Indices

The world stocks zigzagged as the Fed renewed its vow to hold benchmark interest rates exceptionally low. The statement contained a cautionary note about volatile financial markets in light of Europe's recent debt problems.

This shows that Fed’s move was definitely hawkish as there is uncertainty about the outlook for the global economy.

Due to Fed’s unsupportive move, the Indian equities are likely to begin on a flat to negative note.

The domestic market may remain volatile ahead of the June F&O expiry today.

The investors will also keep an eye on weekly inflation numbers, which will be announced today. The banking stocks will be in focus on fears that the Reserve Bank of India may raise interest rates, if inflation continue to surge.

The oil & gas stocks will also be in focus ahead of its empowered group of ministers (EGoM) meet tomorrow (June 25, 2010).

Commodity cues

In the commodity space, Fed's decision to hold rates steady plus a government report showing rising crude inventory keeps oil prices under pressure, with the Nymex light crude oil for the August series declined by $1.50 per barrel. In the metals space, the Comex Gold for the June series down by $5.80 to a troy ounce and the Comex Silver for the June series was fell by $0.44 to a troy ounce.

Daily trend of FII/MF investment in equities

On June 23, 2010, the foreign institutional investors (FIIs) were the net buyers of the Indian stocks to the tune of Rs1,037.30 crore, whereas the domestic mutual, on June 22, 2010, were the net sellers of the stocks to the tune of Rs231.70 crore.