Market may fall for the third straight day on weak economic data in the US

The market may fall for the third straight day on weak Asian stocks after a jump in US jobless claims. Trading of S&P CNX Nifty futures on the Singapore stock exchange indicated that the Nifty could fall 4 points at the opening bell.



Meanwhile, the Supreme Court on Thursday ordered the Allahabad High Court to delay a potentially explosive verdict on whether Hindus or Muslims own land around the demolished Babri mosque in Ayodhya. Hindu mobs demolished the mosque in the town of Ayodhya in 1992, claiming it was built on the birthplace of their god-king Rama. The demolition triggered the worst religious riots since partition in 1947, and some 2,000 people died. The Supreme Court prevented the lower court from delivering the judgement on Friday, 24 September 2010 as originally slated and it is now unclear when the verdict will come. The top court will now hear an appeal for a stay on the verdict on 28 September 2010, filed by a person who said the matter could be settled out of court.

Asian stock markets fell led by Japanese stocks on Friday after a jump in U.S. unemployment claims. The key benchmark indices in Hong Kong, Japan, Singapore and Taiwan fell by between 0.06% to 1.25%. But the key benchmark indices in Indonesia and South Kroea rose by between 0.25% to 1.04%. Chinese markets remains shut today for a holiday.

U.S. stocks fell on Thursday after a weak reading on the labor market dropped stocks through a key technical level. The Dow Jones industrial average ended down 76.89 points, or 0.72% at 10,662.42. The Standard & Poor's 500 Index finished down 9.45 points, or 0.83% at 1,124.83. The Nasdaq Composite Index fell 7.47 points, or 0.32% at 2,327.08. Jobless claims unexpectedly rose in the latest week, a sign the labor market still faces headwinds. Existing-home sales rose in August, but from depressed levels.

Back home, the food price index rose 15.46% while the fuel price index climbed 11.48% in the year to 11 September 2010, government data on Thursday showed. In the prior week, annual food and fuel inflation stood at 15.10% and 11.48% respectively.

The primary articles index was up 16.80% in the latest week compared with an annual rise of 16.22% in the previous week, which was the first reading of a new series of data with a different base year of 2004-05, new components and weightings. The wholesale price index the most widely watched gauge of prices in India rose 8.5% in August.

Foreign institutional investors (FIIs) are in a buying spree in India. As per provisional figures, foreign institutional investors (FIIs) bought shares worth a net Rs 534.45 crore on Thursday, 23 September 2010. Domestic institutional investors dumped shares worth Rs 645.69 crore on that day.

FII inflow in September 2010 totaled Rs 17,499.43 crore (till 23 September 2010). FIIs had bought equities worth Rs 11687.50 crore in August 2010. FII inflow in the calendar year 2010 totaled Rs 36994.53 crore (till 23 September 2010).

At a mid-term policy review on Thursday, 16 September 2010, the Reserve Bank of India (RBI) signaled that it may be nearing a pause in its current tightening cycle. The central bank said its rate and liquidity actions since October 2009 have been driven by two considerations -- normalisation of the monetary policy stance as the crisis abated and inflation management. The Reserve Bank of India believes that the tightening that has been carried out over this period has taken the monetary situation close to normal, it said. Consequently, the role of normalisation as a motivation for further actions is likely to be less important, the RBI said.

The RBI on Thursday, 16 September 2010 raised its repo rate, or benchmark lending rate, by a quarter point to 6%, at a mid-term monetary policy review. The central bank also hiked the reverse repo rate, or the rate at which it borrows funds, by half a point to 5%. Both these changes will take place with immediate effect.

The monsoon rains were 44% above normal in the week to 22 September, the weather office said on Thursday. Monsoon is important for India as about 60% of the country's farmlands are rain-fed and more than half of the workforce is employed in the agriculture sector.

The key benchmark indices skidded for the second straight day on Thursday tracking subdued European markets after data suggested weak economic activity in that region. The BSE 30-share Sensex was down 80.71 points or 0.4% to 19,861.01 on that day.