Stocks head towards a gap-down start

Headlines for the day:

US court battle jams Mahindra's gear

Tax code bill to retain most draft proposals

Rural Electricity Corporation to issue Rs3,000 crore infra bonds



Events for the day:

Major corporate action

Ex-date for dividend of BEML, Mundra Port and Special Economic Zone
Results: Jain Irrigation, Tulip IT Services, Reliance Capital
For more events and news, log on to Sharekhan.com

Updates on global events

The US nonfarm payrolls for the month ended July 2010 stood at (131,000) as compared to (221,000) seen in the previous month.

The US unemployment rate for the month ended July 2010 remained unchanged at 9.5%

Pre-market report

Global signals

The European markets fell to their lowest close in a week on Friday (August 06, 2010), below a key resistance level after US July non-farm payrolls were worse than expected.

The US stocks fell on Friday after the government data showed a larger-than-expected drop in July payrolls, giving investors a stark reminder that the economic recovery remains slow.

The Asian markets fell in their early trades on Monday (August 09, 2010), as sentiment was dampened by a poor US jobs report. SGX Nifty was trading 16 points lower, indicating towards a negative start on the Indian bourses.

Indian Indices

In the previous week, both the benchmark indices made fresh 2010 highs, as foreign institutional investors (FIIs) continued their buying spree. The Indian markets were moving upwards in the previous week, but it seems that the indices may still move within a range, due to lack of triggers back home.

The US economic data has been disappointing and may not provide any momentum for the further course to the Indian markets. However, the Indian markets are likely to open with a negative bias in today's session, tracking the weak path led by the global markets. The Indian indices are expected to trade range-bound.

The companies that will declare their results today are Jain Irrigation Systems, Tulip IT Services and Reliance Capital; the stocks will be closely eyed.

Commodity cues

Crude oil futures fell for a third consecutive day as weakness in the US job data hit the expectations for energy demand, as the crude oil futures for September delivery dipped by $1.31, to settle at $80.70 a barrel.

Daily trend of FII/MF investment in equities

The FIIs are bullish about the Indian economic growth and it is highly expected to increase their investment in the coming days. However, FIIs inflow has been slowed down in the previous session due to global concern on the economic recovery.