Markets set to begin lower; Oil cos in focus

Headlines for the day:

Alstom close to deal with BHEL, nuclear power.

GMR wins deal to build, run new Maldives airport.

SBI eyes big surge in home loans



Events for the day:

Major corporate action

EGoM meet on fuel price today
Ex-date for dividend of Albert David
Results: Bharat Electronics
For more events, log on to Sharekhan.com

Pre-market report

Global signals

European shares hit a two-week closing low in choppy trade on Thursday (June 24, 2010), with banks among the top decliners on heightened concerns over a the US financial reform bill and worries over the global economic recovery.

The S&P 500 fell for the fourth straight day on Thursday as fresh signs of consumer weakness and worries about stringent financial regulation provoked investors to unload positions.

The Asian markets were trading lower on Friday (June 25, 2010), weighed by Wall Street's losses. SGX Nifty was trading 24.50 points lower.

Indian Indices

The persistent worries over the outlook for the global economic recovery are weighing on the world markets. The sentiments across the globe dampened after the Federal Reserve kept interest rate at record low on tougher economic climate. The global markets fell over the concerns about the euro zone's debt problems, which is yet to be solved.

The Indian markets have been following the path led by its global peers. The fall in the world markets may push the domestic markets to weaken at start.

The inflation for the week ended June 12, 2010 rose to 16.90% may also weigh on the domestic markets, as investors will be worried about the Reserve Bank of India cutting interest rates. This may bring the banking stocks in limelight.

The empowered group of ministers (EGoM) will meet again today to decide on the pricing of petrol, diesel, kerosene and cooking gas. These meetings have happened in the past too, but the group has not succeeded in taking any decision on deregulating fuel prices.

The petroleum ministry has proposed to increase the price of petrol by Rs3 a litre and diesel by Rs2 a litre. It has also suggested to raise retail prices of kerosene by Rs6 a litre and cooking gas by Rs100 per cylinder.

There is still no consensus among the members of EGoM on oil price hike. It is believed that the Congress brass is ready for a petro-price hike considering the under recovery of the oil marketing companies, key allies of the party like Mamata Banerjee’s Trinamool Congress and Sharad Pawar’s Nationalist Congress Party are strongly opposed to a fuel price rise.

So it is a great event to watch out for today, whether we will see any price hike or again it will get postponed due to political issues.

Foreign institutional investors (FIIs) who had flown to safety last month in the wake of uncertainties surrounding Greece and its impact on the global economy have already put in June, raising chances of market stability at higher levels. The local investors have not been supporting the markets.

The recovery in monsoons have also been supporting the markets.

Commodity cues

In the commodity space, oil prices pared early losses and posted modest gains, with the Nymex light crude oil for the August series rose by $0.16 per barrel. In the metals space, the Comex Gold for the June series rose by $11.40 to a troy ounce and the Comex Silver for the June series was rose by $0.28 to a troy ounce.

Daily trend of FII/MF investment in equities

On June 24, 2010, the FIIs were the net buyers of the Indian stocks to the tune of Rs369.70 crore, whereas the domestic mutual, on June 23, 2010, were the net sellers of the stocks to the tune of Rs667.30 crore.