F&O expiry to add volatility

Firm global cues are likely to trigger a positive start on the Indian bourses. However, a rise in crude oil prices and profit booking after a seven-day rally may cap upside. Trading of S&P CNX Nifty futures on the Singapore stock exchange indicates a gain of 10.50 points at the opening bell. Volatility may remain high as derivative contracts for the near-month March 2011 series are set for expiry today, 31 March 2011. The near term major trigger for the market is Q4 March 2011 results which will start trickling in from about mid-April 2011.




On the macro front, the government will unveil data on some wholesale price indices for the year through 19 March 2011 viz. the food price index, the primary articles index and the fuel price index at about 12:00 IST.

Revival in foreign equity inflows, cooling of oil prices from recent 2-1/2-year highs and hopes for improved relations between India and Pakistan helped the barometer index BSE Sensex vault 1,451.13 points or 8.13% in seven trading days to 2-1/2-month closing high of 19,290.18 on Wednesday, 30 March 2011, from its close of 17,839.05 on 21 March 2011.

As per provisional figures, foreign funds bought shares worth Rs 739.61 crore and domestic funds sold shares worth Rs 615.34 crore on Wednesday, 30 March 2011.

There are hopes for improved relations between India and Pakistan after Pakistan early this week agreed to allow a team from India to travel to Pakistan to probe the 2008 Mumbai terrorist attacks. The two countries have also agreed to set up a hot line between their home secretaries' offices to allow real-time information sharing on terrorism. The foreign ministers of both nations are expected formally to restart peace talks by July 2011.

Asian stocks edged higher on Thursday as a jobs report boosted optimism in the US economy and Chinese companies posted earnings that beat analyst estimates. The key benchmark indices in Hong Kong, Taiwan, South Korea Singapore and Indonesia were up by between 0.03% to 0.29%. The key benchmark indices in China and Japan slipped 0.51% and 0.03%.

Telecommunications stocks led US stocks higher Wednesday, as optimism over deal activity added to confidence that jobs data would continue pointing toward a strengthening labor market. The Dow Jones Industrial Average gained 71.60 points, or 0.58%, to finish at 12350.61. The Standard & Poor's 500-stock index closed 8.82 higher, or 0.67%, at 1328.26 and the Nasdaq Composite gained 19.90, or 0.72%, to 2776.79.

The ADP Employer Services report on Wednesday showed companies hired 201,000 workers in March, marking the third time in four months that the nation added more than 200,000 jobs.

US crude futures were up 37 cents a barrel or 0.35% to $104.64 a barrel. India imports majority of its crude oil requirements and a surge in crude oil prices to 2-1/2-year highs recently has sparked inflation and interest rates worries. High oil prices have also raised concerns about higher oil subsidy bill for the government and its negative impact on the government's fiscal position.

Billionaire investor and international investment icon Warren Buffett who was in his maiden visit to India last week said that he hopes to spend some money in India. His firm Berkshire Hathaway is looking to park funds in large investment destinations and India fits the bill perfectly, he said. India, according to him, is not an emerging market but a very big country with a large number of significant businesses. He said that Berkshire Hathaway would look at possible acquisitions in India as and when there were opportunities.