Market may hit fresh 32 month highs in early trade

The market is slated to hit more than 32 month highs in early trade tracking firm Asian stocks after US stocks posted strong closing on Friday, 24 September 2010.The Trading of S&P CNX Nifty futures on the Singapore stock exchange indicated that the Nifty could gain 44.50 points at the opening bell.



Asian stock markets kicked off a new week of trading on Monday in good spirits, encouraged by an improvement in U.S. economic indicators and higher metal prices. The key benchmark indices in China, Hong Kong, Japan, Indonesia, South Korea, Singapore and Taiwan rose by between 0.47% to 1.51%.

U.S. stocks notched their fourth week of gains on Friday 24 September 2010 as investors used a rise in business spending to revive the September rally after three days of losses. Economic data gave a mixed picture, but traders latched on to a rise in August business spending as the latest sign the recovery is on firmer ground. That seemed to trump a lackluster report on new home sales in August. The Dow Jones industrial average was up 197.84 points, or 1.86% at 10,860.26. The Standard & Poor's 500 Index finished up 23.82 points, or 2.12% at 1,148.65. The Nasdaq Composite Index was up 54.14 points, or 2.33% at 2,381.22.

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, 23 September 2010 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 1149.80 crore on Thursday, 2Friday, 24 September 2010. Domestic institutional investors dumped shares worth Rs 879.83 crore on that day.

FII inflow in September 2010 totaled Rs 18,649.23 crore (till 24 September 2010). FIIs had bought equities worth Rs 11687.50 crore in August 2010. FII inflow in the calendar year 2010 totaled Rs 38144.33 crore (till 24 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.

Cumulative rainfall in the country during 1 June to 22 September was 4% above normal, IMD data showed. 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. 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 snapped last two days losses on Friday, 25 September 2010 as the recent strong foreign fund inflows kept the sentiment upbeat. The BSE 30-share Sensex was up 184.17 points or 0.93% to 20045.18.