Market may move sideways

The current market sentiment is mainly driven by the earning estimations and movement in global indices. The mood of the market is expected to remain positive after Friday's solid gains and the gains in the US markets will also help the local indices advance further. However, subdued Asian indices in current trades may drag the market in early trades. Among the indices, the Nifty could test higher levels around 4550 and 4600 while on the downside the index has a strong support at 4450-4385 levels. The Sensex has a likely support at 15000 and may face resistance at 15450. Geomet, Indo Rama Synthics, Merck, Petronet LNG, Power Finance Corporation and TCS are expected to announce their numbers.

US indices gained marginally on Friday. While the Dow Jones gained by 46 points at 13907, the Nasdaq added 5 points to close at 2707.

Most of the Indian ADRs barring few ended in the red on the US bourses. Rediff tumbled nearly 4% and MTNL slipped 2.06% while Infosys, Satyam, Wipro, Dr Reddy's Lab and VSNL lost over 1-2% each. However, Tata Motors, ICICI Bank and HDFC Bank gained over1-2% each.

Crude oil prices in the global market extended their upward trend, with the Nymex light crude oil for August series jumping by $1.43 at $73.93 a barrel. In the commodity space, the Comex gold for August delivery moved down by $1 to settle at $662.10 a troy ounce.

Domestic bourses to track firm global markets

The market is likely to extend this week’s gains tracking firm global markets after the US Federal Reserve policy-setting meeting on Wednesday dropped an explicit reference to the possibility of taking rates higher in its statement, sparking talk the next move could be a cut. The Fed left interest rates unchanged at 5.25%. US interest-rate futures indicated a 48 percent chance of a rate cut by the end of June 2007, compared with 24 percent before the Fed's announcement.

The Dow Jones industrial average shot up 159.42 points, or 1.30 percent, to 12,447.52. The Standard & Poor's 500 Index jumped 24.1 points, or 1.71 percent, to 1,435.04. The Nasdaq Composite Index surged 47.71 points, or 1.98 percent, to 2,455.92.

Exporters led Asian stocks higher. Key benchmark indices in Hong Kong, Japan, South Korea, Singapore, China and Taiwan were up by between 0.4% to 2.1%.

Back home, it remains to be seen whether volumes accompany rise on the bourses. Volumes on the bourses have dropped over the past few days, partly due to advance tax payments. Daily volumes on BSE have dropped since the middle of March. It had hovered in 17.12 - 20.8 crore shares a day from 12 March to 21 March compared to 22.94 - 29.57 crore shares a day from 1 March to 9 March.

Foreign institutional investors (FIIs) turned buyers on Tuesday (20 March 2007), the day when the Sensex had risen 61 points tracking firm Asian markets. FIIs were net buyers to the tune of Rs 136.30 crore on Tuesday compared to a withdrawal of Rs 250 crore on Monday (19 March 2007). As per provisional figures, FIIs were net buyers to the tune of Rs 187.87 crore on Wednesday 21 March 2007, the day when Sensex had surged 240 points.

Volatility may rise over the next few days ahead of the expiry of the March 2007 derivative contracts next Thursday (29 March 2007). With the market scheduled to remain closed next Tuesday (27 March) for a public holiday, only five trading sessions are left before the expiry of the March 2007 contracts. The rollover has already started to April 2007 contracts from March 2007 contracts.

Nifty March 2007 futures settled at 3757 on Wednesday, a discount of 7.55 points over spot Nifty closing of 3764.55. Nifty April futures settled at 3752.80, a discount of 11.75 points over spot Nifty closing of 3764.55.

The next major trigger for the domestic bourses is Q4 March 2007 earnings, reports of which by corporates will start next month. Analysts expect Q4 results to be strong. Market men will closely watch what company managements have to say about the outlook for FY 2008.

The undercurrent on the bourses remains cautious due to high inflation and rising interest rates. Strong industrial production data released early last week makes a strong case for the Reserve Bank of India (RBI) to raise interest rates at its annual policy review for FY-2008 on 24 April 2007. Industrial output rose 10.9% in January 2007 from a year earlier. The wholesale price index rose 6.46% in the 12 months to 3 March 2007, up from the previous week's annual increase of 6.10% due to higher edible oil and naphtha prices.

The long-term India story remains intact. India’s long-term growth drivers are a favourable demography (large share of young population), robust domestic consumption and an acceleration in infrastructure creation

Domestic bourses may track recovery in Asian markets

The domestic bourses have been taking cue from global markets over the past few days. The market here may follow closely on the heels of a recovery witnessed across Asia. The Sensex had plunged 453.36 points (3.4%) on Wednesday (14 March 2007) as part of a global crash brought about by deepening US mortgage-lending crisis. Key Asian share indices had dived 2 - 3% on Wednesday.

All the Asian markets were trading in the green on today, tracking a recovery on Wall Street on Wednesday. A falling yen also encouraged investors to look for bargains and pick up shares in exporters. Key benchmark indices in Hong Kong, Japan, South Korea, Singapore, China and Taiwan were up between 0.9 - 1.7%.

US stocks posted modest gains on Wednesday, as worries eased that losses for firms operating in the subprime mortgage sector -- which lends to borrowers with a weaker credit history -- might spill over into the wider economy and slow growth. The Dow Jones Industrial Average gained 57.44 points (0.48%), to settle at 12,133.40. The Nasdaq Composite Index advanced 21.17 points (0.9%), to 2,371.74.

FIIs pressed heavy sales on Wednesday, the day when the Sensex had plunged 453 points. As per provisional data, FIIs were net sellers to the tune of Rs 541 crore on that day. They were net sellers to the tune of Rs 84 crore on Tuesday (13 March 2007), the day when the benchmark Sensex had risen 80 points. A drop in FII volumes on Tuesday (as reflected in daily gross purchases and gross sales figures for the day).

FIIs were net sellers to the tune of Rs 1104 crore in index-based futures on Wednesday. They were net sellers to the tune of Rs 192 crore in individual stock futures on the same day. Nifty March 2007 futures settled at 3,599.55 on Wednesday, a steep discount of 41.55 points compared to the spot Nifty closing of 3,641.10.

Mutual funds continued sales of equities on Tuesday (13 March 2007). But their outflow of Rs 13.48 crore on Tuesday was much lower than Monday (12 March)’s Rs 146 crore. The outflow was still higher at Rs 384 crore on Friday (9 March 2007).

US oil rose 18 cents to $58.34 a barrel on Thursday, as drops in gasoline inventories in the world's top consumer raised concerns of a supply crunch ahead of the summer driving season.

Market may drift lower

A sharp fall in volumes was witnessed on Monday (12 March) when the market eked out small gains. Turnover on BSE’s cash segment declined to Rs 3416 crore from Friday (9 March)’s Rs 4339 crore. Turnover on NSE’s derivatives segment declined sharply to Rs 26751.37 crore from Friday’s Rs 34939.39 crore.

Key Asian markets were in the red today and the markets overall were mixed. Key benchmark indices in Hong, Japan, Singapore and South Korea were down by 0.3% each. Key benchmark indices in China, and Taiwan were up by between 0.1% to 0.7%.

US stocks advanced on Monday, helped by deal news, cheaper oil and positive broker comments on the chip sector. The Dow Jones industrial average was up 42.30 points, or 0.34 percent, to end at 12,318.62. The Standard & Poor's 500 Index was up 3.75 points, or 0.27 percent, to finish at 1,406.60. The Nasdaq Composite Index was up 14.74 points, or 0.62 percent, to close at 2,402.29.

Crude oil languished around $59 a barrel on Tuesday after dropping to a three-week low on Monday on warming US weather and comments from OPEC members that were taken as a signal the group would not cut output at a meeting this week in Vienna.

FIIs have resumed buying after substantial sales in late February-early March 2007. As per provisional data, FIIs were net buyers to the tune of Rs 131 crore on Monday (12 March). They were net buyers to the tune of Rs 395.70 crore on Friday (9 March 2007), the day when the Sensex had lost 164 points. FIIs were net buyers to the tune of Rs 115.80 crore on Thursday (8 March 2007), the day when the Sensex had surged 470 points.

FIIs were net buyers to the tune of Rs 865 crore in index-based futures on Monday. They were net buyers to the tune of Rs 49 crore in individual stock futures on that day. Nifty March futures settled at 3727.20 on Monday compared to spot Nifty closing of 3734.60.

Even as mutual funds are sitting on cash, thanks to collections from some of the recent new fund offers, they continue to press sales in equities. Mutual funds were net sellers to the tune of Rs 385 crore on Friday (9 March 2007), the day when Sensex had lost 164 points. They were net sellers to the tune of Rs 40 crore on Thursday (8 March 2007), the day when the Sensex had surged 470 points. They had pressed sales worth a net Rs 379.56 crore on Wednesday (7 March 2007), the day when the Sensex had lost 177 points in volatile trade

The data on industrial production released on MOnday showed industrial production rose 10.9% in January 2007 from a year earlier, lower than a revised annual growth of 12.5% in December 2006. Output in November 2006 was an annual 15.4%, the highest in more than a decade. Manufacturing production, which represents more than 75% of industrial output, rose 11.6% in January 2007 from a year earlier, compared with a provisional 11.9% annual growth in December 2006

There has been a lack of direction on the domestic bourses over the past few days. A recovery of 282 points on 6 March 2007, was followed by a decline of 117 points on 7 March 2007. A solid surge of 470 points on 8 March 2007, was witnessed the next day (on 8 March 2007) which was followed by a decline of 164 points on 9 March.

Earlier, a sell-off gripped bourses in late February-early March 2007 due to setback in global markets, and disappointing Union Budget 2007-08 on 28 February 2007. A sharp fall of nearly 9% in Chinese stocks on 27 February 2007, had spooked global bourses in late February-early March 2007.

The Budget left a lot to be desired. While there was no across-the-board cut in the 10% corporate surcharge as expected, the dividend distribution tax was raised to 15% from 12.5%. The Budget also raised direct/indirect taxes for cement, construction and IT sectors.

The next trigger for the domestic bourses may come from global bourses. US Federal Reserve holds a two-day meet on 20-21 March 2007 to decide US interest rates. The latest US job data helped eased expectations of a possible rate cut by the Federal Reserve.

Uptrend to continue

The market breadth was quite strong on Thursday 15 February, the day when Sensex had surged 346 points, registering its biggest single day point gain in a little over one month. This indicates that the rally has got strength.

However, volatility may heighten this week ahead of expiry of February 2007 derivatives contracts on 22 February 2007. On Thursday (15 February), Nifty February 2007 futures settled at 4160, at a premium of 13.80 points over spot Nifty closing of 4146.20. Nifty March 2007 futures settled at 4158.45, a premium of 12.25 over spot Nifty closing of 4146.20.

FIIs have resumed buying. FIIs were net buyers to the tune of Rs 210.50 crore on 14 February. FIIs had stepped up buying since February 2007 before the inflow slowed down. They turned net sellers on 13 February 2007. FII inflow was a robust Rs 2909.90 crore in five trading sessions from 2 February to 8 February. The strong inflow was triggered by an upgrade in India’s sovereign rating to investment grade by global rating agency S&P on 30 January 2007.

The near-term trend on the bourses will be driven by budget expectations. The focus of the market will be more on sectors, which are expected to benefit from the budget proposals.

There are also concerns that a short-term capital gains tax on sale of shares, which is currently at 10%, may be hiked. Another concern is that the securities transaction tax (STT) may also go up further. The previous budget had increased STT. The removal of a 10% corporate surcharge may be offset by removal of certain open-ended exemption.

Most Asian markets are closed for the Lunar New Year holidays. Taiwan and China are closed the entire week, while Hong Kong and Singapore are shut on Monday and Tuesday. South Korea and Malaysia are closed on Monday as are US markets.

The blue-chip Dow Jones industrial average edged up on Friday (16 February) to end at yet another record before a three-day holiday weekend. The Dow Jones industrial average rose 2.56 points, or 0.02 percent, to end at a record 12,767.57. The Standard & Poor's 500 Index slipped 1.27 points, or 0.09 percent, to finish at 1,455.54. The Nasdaq Composite Index dipped 0.79 of a point, or 0.03 percent, to close at 2,496.31.

In New York on Friday, oil futures prices jumped more than $1 to end above $59 a barrel as traders covered some short positions before the Presidents Day holiday on Monday, when NYMEX and US financial markets are closed. More unrest in OPEC member Nigeria also lifted oil prices.

Market may recover tracking firm Asian equities

The market may recover from Tuesday’s 168 points, fall tracking firm Asian markets and with data showing a surge in FII inflow. But volatility may prevail ahead of Thursday (25 January)’s expiry of January 2007 derivatives contracts.

FIIs stepped up buying on Monday 22 January. FIIs were net buyers to the tune of Rs 320 crore on 22 January compared to their Friday (19 January)’s inflow of Rs 76.80 crore. There has been sustained buying by FIIs over the past few days, which followed their substantial sales earlier this month. FIIs have been net buyers in seven out of the last eight trading sessions.

As per provisional data, FIIs were net buyers to the tune of Rs 127 crore on Tuesday 23 January, the day when Sensex had lost 168 points. FIIs were net buyers to the tune of Rs 30 crore in index-based futures on that day. They were net sellers to the tune of Rs 510 crore in individual stock futures on that day.

After trading hours on Tuesday, Tata Motors reported 11.5% growth in net profit in December 2006 quarter to Rs 513.17 crore from Rs 460.23 crore in December 2005 quarter. The key result today is that of housing finance major HDFC. Four brokerages expect a between 20.1% to 27.1% growth in HDFC’s Q3 net profit to between Rs 341.80 crore to Rs 361.70 crore compared to a net profit of Rs 284.52 crore in December 2005 quarter.

Asian stocks rose on Wednesday, with Japan's Nikkei nearing a 6-1/2-year high. A more than 4 percent surge in oil and rising gold and base metals prices boosted commodities-related stocks, sending Australia's resource-heavy main index to a record high and pushing Hong Kong's Hang Seng to a new peak.

US stocks gained on Tuesday as a spike in crude oil prices lifted shares of energy companies, including Exxon Mobil Corp., while strong profits from United Technologies Corp. gave investors a reason to buy aerospace stocks. The Dow Jones industrial average gained 56.64 points, or 0.45 percent, to end at 12,533.80. The Standard & Poor's 500 Index added 5.04 points, or 0.35 percent, to finish at 1,427.99. The Nasdaq Composite Index inched up just 0.34 of a point, or 0.01 percent, to 2,431.41

Oil dipped back below $55 a barrel, after racing nearly $2.50 higher on Tuesday as the United States announced plans to build up its emergency crude reserves and as colder weather pushed up demand in the world's top consumer. NYMEX crude for March delivery edged down 7 cents to $54.97 a barrel.

Market to take direction from prominent Q3 results

A number of top firms are announcing Q3 results today. These include State Bank of India, Tata Motors, Grasim, Bharti Airtel, Cipla and Indian Hotels. The market will take direction from how these prominent results shape in.

FIIs were net buyers to the tune of Rs 77 crore on Friday 19 January, the day when Sensex had lost 35 points. FIIs have resumed buying after their heavy inflows earlier during the month which had triggered a sharp market fall. FIIs were net buyers in 6 out of 7 trading session from 11 January to 19 January. As per provisional data, FIIs were net buyers to the tune of Rs 218 crore on Monday 22 January, the day when Sensex had risen 27 points.

FIIs were net buyers to the tune of Rs 288 crore in index-based futures on 22 January. They were net sellers to the tune of Rs 85 crore in individual stock futures on that day.

Volatility may remain high on the bourses in the run up to the expiry of January 2007 derivatives contracts on Thursday (25 January 2007).

Meanwhile, the centre late on Monday cut customs duty on key inputs with immediate effect. The customs duty on portland cement was cut to zero from 12.5 percent; ferro-alloys stainless steel and other alloy steel to 5 percent from 7.5 percent; calcined alumina to 5 percent from 7.5 percent; pipes and tubes of aluminium, copper and zinc to 7.5 percent from 12.5 percent.

Other cuts included: project imports to 7.5 percent from 12.5 percent; specified capital goods and their parts to 7.5 percent from 12.5 percent. The reduced customs duty of 7.5% has been extended on project import to airport development and metro rail projects. A government statement said the step had been taken with a view to reduce the cost of manufacturing and infrastructure development.

Asian stocks fell on Tuesday, led by Japanese technology shares on worries about the earnings outlook for the sector. They came under pressure also due to slide in their US peers on Monday. Key benchmark indices in Hong Kong, Japan, and Singapore were down by between 0.05% to 0.4%. Key indices in South Korea and Taiwan bucked the trend and were up slightly.

US stocks slid on Monday as investors sold off shares of technology firms on worries about their earnings outlook, while a brokerage downgrade hurt shares of aircraft maker Boeing Company, pushing the blue-chip Dow average down to record its steepest one-day drop in two months. The Dow Jones fell 88.37 points, or 0.70 percent, to end at 12,477.16. The Standard & Poor's 500 Index declined 7.55 points, or 0.53 percent, to finish at 1,422.95. The Nasdaq Composite Index lost 20.24 points, or 0.83 percent, to close at 2,431.07.

Oil eased, continuing the previous day's decline amid robust stockpiles in consumer nations. Crude had spiked on Friday on colder weather in the US northeast, the world's top market for heating oil, but on Monday resumed a sell-off that has seen prices fall around 16 percent since the start of the year. NYMEX crude for March delivery was down 11 cents at $52.47 a barrel on Tuesday.

Look at the Results Calendar

RIL, Ranbaxy results to set the tone

Major December quarter results scheduled today are Reliance Industries (RIL) and Ranbaxy Laboratories. Due to RIL’s substantial weightage in key indices, the Sensex and Nifty, RIL results will impact the market trend today. The other big results for the day are Reliance Energy, UltraTech Cement and Siemens.

Three brokerages expect between 7.2 - 27% growth in RIL’s Q3 net profit, between Rs 1904.20 crore and Rs 2255.80 crore, compared to a net profit of Rs 1776 crore in Q3 December 2005. The three brokerages expect between 21.1 - 46.1% growth in RIL’s Q3 sales, between Rs 22000 crore and Rs 26542 crore, compared to sales of Rs 18168 crore in Q3 December 2005.

According to analysts, though RIL’s refining margins will be lower in the December 2006 quarter, the shut down of the refinery in Q3 December 2005 offset a fall in refining margins of the company. RIL had a 40-day refinery shutdown in Q3 December 2005. They also reckon that performance of RIL’s petrochemicals division will be strong due to higher margins and strong volume growth aided by capacity expansion at this division.

Ranbaxy is expected to report a surge in net profit in December 2006 quarter. Ranbaxy's performance will be boosted in the December 2006 quarter mainly by a 180-day exclusivity of generic Zocor 80mg and the acquisition of Terapia. In March 2006, Ranbaxy acquired Romanian company Terapia. Foreign brokerage CLSA Securities expects a strong 161.7% growth in Ranbaxy’s consolidated net profit, to Rs 179.50 crore in December 2006 quarter from Rs 68.60 crore in December 2005 quarter.

FII inflow was Rs 101.30 crore on Tuesday (16 January), the day when the Sensex shed 15 points. FIIs were net buyers in three out of four trading sessions, from 11 January 2007 to 16 January 2007.

As per provisional data, FIIs were net buyers to the tune of Rs 11.87 crore on Wednesday (17 January), the day when the Sensex rose 17 points. They were net sellers to the tune of Rs 50 crore in index-based futures that day and net sellers to the tune of Rs 127 crore in individual stock futures.

Mutual funds are in buying mode. They were net buyers to the tune of Rs 72 crore on 16 January. Their net inflow was a substantial Rs 637 crore on 12 January and Rs 103.51 crore on 15 January.

Asian shares were in the green on Thursday. Key benchmark indices in Hong Kong, Japan, South Korea, Singapore and Taiwan were up between 0.04 - 0.4%.

Tech shares led US stocks lower on Wednesday, after Intel, the world's largest microchip maker, said late on Tuesday that quarterly profit fell 40% and gross margins will not improve. The Dow Jones industrial average slipped 5.44 points, or 0.04%, to end at 12,577.15. The Standard & Poor's 500 Index dipped 1.28 points, or 0.09%, to close at 1,430.62. The Nasdaq Composite Index fell 18.36 points, or 0.74%, to finish at 2,479.42.

Oil futures rebounded late in New York on Wednesday to end more than a dollar higher, off a 20-month low, as colder weather arriving in the Northeast helped lend support ahead of inventory data due out Thursday. US crude futures settled $1.03 higher at $52.24 a barrel, after slipping as low as $50.28, the lowest level since 25 May 2005.

Market may move sideways

However, the bias remains positive as the FII and MFs continue to remain net buyers in the last couple of days. On the downside, the Nifty has likely supports at 4045 while the Sensex could witness support at 14040 and resistance at 14200.

US indices finished in the red on Wednesday, with the Dow Jones losing five points to close at 12577 while the Nasdaq slipping by 18 points at 2479 respectively.

Indian floats fared better on the US bourses. MTNL moved up 3.27%, Wipro advanced 3.86% and Satyam gained 2.91% while Dr Reddy's Lab, ICICI Bank and Rediff gained over 1% each. Among the losers HDFC Bank and VSNL were down over 1% each.

FII sales may weigh on bourses

The optimism arising from a recovery in Asian markets may be offset by provisional data showing heavy FII sales in the cash and futures markets on Monday (8 January), when the Sensex went into a tailspin. The post-listing performance of oil explorer, Cairn India, will also dictate the trend during the session.

As per provisional data, FIIs were net sellers to the tune of Rs 788 crore on 8 January. They were net sellers to the tune of Rs 799 crore in index-based futures and Rs 326 crore in individual stock futures on the same day. Net inflow from FIIs was Rs 0.90 crore on Friday (5 January), the day when the Sensex had lost 11 points.

Meanwhile, the Authority for Advance Ruling on income tax on Monday (8 January) ruled that the income of two foreign institutional investors – Fidelity Advisory and Mathew International – will be taxed in India as capital gains and not as business income. FIIs, which have the option to approach the Supreme Court (SC), contended that their business income cannot be taxed as they did not have a permanent establishment (PE) in India.

On Tuesday (9 January), stock markets in Asia recovered from Monday's sell-off, with gains of as much as 1%.

US stocks advanced on Monday, led by tech shares, as brokerage upgrades on bellwether companies such as International Business Machines Corp boosted investor optimism. The Dow Jones industrial average was up 25.48 points, or 0.21%, at 12,423.49. The Standard & Poor's 500 Index was up 3.13 points, or 0.22%, at 1,412.84. The Nasdaq Composite Index was up 3.95 points, or 0.16%, at 2,438.20.

US crude oil fell below $56 a barrel as winter weather remained unusually warm in the United States.

Market may trade higher

The market may resume positive due to marginal overnight gains in the US indices and a fall in the global crude oil prices. Among the Asian indices, Nikkei has raised around 0.69% while Kospi, Straits Times and Jakarta are trading with steady gains, However, Hang Seng remained unchanged . Among the local indices, the Nifty could face resistance around 3960 and has a likely support at 3904 while the the Sensex has a likely resistance at 13855 and support at 13600.

US indices posted modest gains on Monday, thanks to a slide in the crude oil prices. While the Dow Jones added 25 points to 12423, the Nasdaq moved up 4 points to close at 2438.

Indian ADR's largely ended on a mixed note on the US bourses. MTNL advanced 5.81% while, ICICI Bank, Patni Computers and VSNL gained nearly 1-3% each. However, Rediff tumbled over 1.12%, while Satyam, Infosys, Wipro, Dr Reddy and HDFC Bank closed with marginal losses. Tata Motors ended unchanged.

In the crude oil front, the Nymex light crude oil for february series lost 22 cents to close at $56.09 per barrel. The bullion Comex gold for February delivery gained $2.50 to settle at $609.40 a troy ounce.

Market may lose further ground on weak Asian bourses

Weak Asian markets and data showing that FIIs were net sellers in both and futures segment on Thursday (4 January 2007) may pull the market down further today. Sensex had lost 143 points on Thursday on account of profit taking in pivotals. As per provisional data FIIs were net sellers to the tune of Rs 231 crore on that day. They were net sellers to the tune of a substantial Rs 698 crore in index-based futures on that day. They net bought index based options to the tune of Rs 520 crore. They were net sellers to the tune of Rs 22 crore in individual stock futures.

The next major trigger for the market is Q3 December 2006 results. While strong Q3 results are already factored in share prices, market players will be closely watching what the company managements have to say about outlook for Q4 March 2007 and FY 2008 (year ending 31 March 2008). Infosys kickstarts Q3 earnings season on 11 January.

After Q3 results, the market will be eyeing the Union Budget 2007-08. A build up of long positions is likely on expectations of favourable policy announcements in the budget, according to dealers.

Asian markets were in the red on Friday (5 January). Key benchmark indices in Hong Kong, Japan, South Korea, Singapore and Taiwan were down by between 0.11% to 1.8%. There are talks that Japanese interest rates could rise this month.

US stocks rose on Thursday, driving the Nasdaq up more than 1 percent, as technology and biotech stocks gained after positive analyst comments and a drop in oil prices below $56 a barrel increased optimism about corporate profits. The Dow Jones industrial average gained 6.17 points, or 0.05 percent, to end at 12,480.69. The Standard & Poor's 500 Index added 1.74 points, or 0.12 percent, to finish at 1,418.34. The Nasdaq Composite Index climbed 30.27 points, or 1.25 percent, to close at 2,453.43.

US crude dropped sharply on Thursday after weekly oil inventory data showed a larger-than-expected rise in US gasoline stockpiles, extending a loss in crude futures from the previous session to cause its biggest two-day percentage loss in more than two years. US crude oil for February delivery fell $2.73, or 4.7 percent, to settle at $55.59 a barrel.

Upmove may continue

The market crossed the psychological 14000 level in yesterday's trades and is likely to take further lead as buying interest continues in large-caps and several other sectoral counters. Gains in overnight US markets and in the Asian indices there was mix trend in current trades may augur well for the markets. Among the key local indices, the Nifty could test higher levels around 4050 and has supports at 3985 and 3960. The Sensex has a likely support at 13900 and may face resistance at 14035.

US indices post the marginal gains on Wednesday. While the Dow Jones scaled above the 12470 levels to close at 12475, 11 points up, the Nasdaq ended 8 points higher at 2423.

Indian floats, too, were upbeat on strong domestic and US markets. Except Dr Reddys, HDFC Bank, Rediff and Patni Computers, other Indian ADRs ended at higher levels. Tata Motors led the upmove and surged 6.17% while VSNL gained 5.47%, MTNL advanced 4.4% and Infosys, Satyam, Wipro and ICICI Bank gained over 1-2% each.

The Nymex light crude oil for February series declined by $2.73 cents at $58.32 per barrel. In the commodity space, the Comex gold for February delivery tumbled up $8.20 to settle at $629.80 a troy ounce

Rally may continue

The smooth expiry of the December futures and strong buying interest in heavyweights could further strengthen the market. However, caution should be maintained as intra-day volatility cannot be ruled out. The Nifty is likely to face resistance at 4050 on the upside and while the Nifty has a support at 3960 on the downside. The Sensex has a likely support at 13900 and resistance at 13980 levels.

Indian floats had a mixed run on the US bourses. MTNL lost 1.55% and ICICI Bank moved down 1.67% while, Infosys, Satyam, Wipro, Dr Reddy's, Tata Motors and HDFC Bank were down around 1% each. Among the gainers VSNL rose 2.4%, while Rediff and Patni Computers ended with postive note.

Cautiousness may prevail due to sustained FII sales

The market may edge lower with data showing sustained FII sales. As per provisional data, FIIs were net sellers to the tune of Rs 1022.55 crore on Thursday 28 December, the day when Sensex had lost 13 points. FIIs were net sellers to the tune of Rs 368 crore on Wednesday 27 December, the day when Sensex had surged 151 points.

There have been persistent FII sales in equities since the middle of this month. In December 2006 so far (till 27 December) FIIs have offloaded shares worth Rs 2617.70 crore. This includes a huge outflow of Rs 2,814 crore in a single trading session on 4 December because FIIs reported money that they had received from shares they tendered in the sponsored ADR issue of Infosys.

FIIs were net sellers to the tune of Rs 231 crore in index-based futures on 28 December. They were net buyers to the tune of Rs 321 crore in individual stock futures on that day.

Mutual funds, meanwhile, are on a buying spree on the bourses. Mutual funds bought shares worth a massive Rs 1772 crore in five trading sessions from 20 December to 27 December. Mutual funds, it appears, are putting excess cash to use. Mutual funds’ cash level in November 2006 was at Rs.9000 crores. Of this, Rs 7,500 crore lied with existing mutual funds. The NFOs (new fund offers) cash level was at Rs 1,700 crore. Recently, Reliance Mutual Fund raised about Rs 2100 crore from an equity scheme targeted for investment in small-cap and mid-cap shares.

The near term trigger for the bourses is Q3 December 2006 results. Market men expect December 2006 quarter to be another strong quarter in terms of earnings growth. Strong advance tax payments corroborate the view that Q3 results would be strong. Cement companies and oil firms have paid substantially higher advance tax in the third installment of 15 December 2006. State Bank of India, Tata Steel, Reliance Industries (RIL), Hindalco, L&T, and Cipla have paid substantially higher advance tax in the third installment. The Q3 results would start trickling in from 11 January 2007.

Asian markets were mostly in the green on Friday (29 December). Key benchmark indices in Japan, Singapore and Taiwan were up by between 0.01% to 0.7%.

US stocks finished marginally lower on Thursday as investors sold off recent outperforming stocks to lock in some profits ahead of the year-end. The Dow Jones industrial average declined 9.05 points, or 0.07 percent, to end at 12,501.52. The Standard & Poor's 500 Index dipped 2.11 points, or 0.15 percent, to finish at 1,424.73. The Nasdaq Composite Index dropped 5.65 points, or 0.23 percent, to close at 2,425.57.

Oil prices eased toward $60 on Friday, reversing gains posted on a steeper than expected fall in US crude stocks as exceptionally mild winter weather led the market toward its first annual loss since 2001. US light crude futures fell 11 cents to $60.32 a barrel by 0251 GMT, keeping just above the one-month low of $60.05 hit on Thursday. Brent rose 8 cents to $60.60.

Market may gain further

Following overnight gains in the US market and firm Asian indices in opening trades, the market is likely to trade in positive territory on the back of firm buying in frontline stocks. While the Nifty could test the 4000 level on the upside, the Sensex has a likely resistance at 13910 and support at 13740.

US indices on Wednesday rallied sharply, with the Dow Jones closing firm above the level at 12511, up 103 points, while the Nasdaq moving up by 18 points to close at 2431.

Rediff ended weak out of 11 floats trading on the US bourses. Tata Motors gained 4.83% followed by MTNL advanced 3.51%, Satyam moved up 3.21% and HDFC Bank up by 3.03%. While, ICICI Bank, Wipro, Dr Reddy's, and Infosys gained over 1-2% each. Patni Computers however gained marginally.

In the crude oil front, the Nymex light crude oil for February series lost 76 cents to close at $60.34 per barrel. The Comex gold for february delivery gained $3.40 to settle at $630.30 respectively.

Buying may continue

After surging above the 13700 mark yesterday the market could notch up further gains owing to bullish sentiment. Also overnight gains in the US market and a strong Asian indices in early trades could weigh positively on the sentiment. Tech stocks may witness strong buying in the domestic market on healthy upsurge in tech ADRs on the US bourses. The benchmark indices, the Nifty could test 3900 and 3940 levels on the upside, while the Sensex has a likely support at 13620 and may face resistance at 13750.

US indices posted modest gains on Tuesday, thanks to a slide in the crude oil prices. While the Dow Jones added 64 points to 12408, the Nasdaq moved up 12 points to close at 2414.

All the Indian ADRs ended in the green. Satyam Compuetrs led the Indian ADR pack with gains of 4.52% followed by Patni Computers flared up by 3.58%, Wipro & Tata Motors (up 3.54%) and ICICI Bank (up 3.25%) while, MTNL, VSNL, Rediff and HDFC Bank gained over 1% each. However, Dr Reddy remained unchanged.

Crude oil prices in the international market declined, with the Nymex US light crude oil for February delivery falling $1.21 to close at $61.10 a barrel. In the commodity segment, the Comex gold for February delivery advanced $4.60 to settle at $626.90 an ounce.

Market may remain on tenterhooks

The market may remain edgy due to a mixed trend across the Asian markets, and lack of cues from the US market, which remained closed on account of Christmas yesterday. China and Hong Kong markets were up 2.12% and 0.51%, respectively, while Japan’s Nikkei had lost 0.07%. Even Singapore’s Straits Times was 0.05% in the red, whereas, South Korea’s Seoul Composite had dropped 0.51%.

A lower closing of the US market on 22 December 2006 (Friday) will also keep the market here on tenterhooks. The Dow Jones had closed at 12,343.22, down 0.63%, while the S&P 500 and the Nasdaq had lost 0.53% and 0.61% to close at 1,410.76 and 2,401.18 respectively that day.

However, the market may derive some inspiration from the fact that FIIs were net buyers of equities worth Rs 264.80 crore on the Indian bourses,on 22 December 2006 (Friday). This was a result of purchases worth Rs 1,666.50 crore and offloading to the tune of Rs 1,401.70 crore in the Indian equities market. The country’s premier index, the BSE Sensex, had climbed a steep 87 points on Friday, closing at 13,471.74. NSE’s S&P CNX Nifty rose 37.65 points, to end at 3,871.15, the same day.

Volatility is expected to remain high ahead of the expiry of December futures contracts on 28 December 2006 (Thursday). Participation by FIIs is also expected to remain low as most fund managers would have proceeded on a Christmas vacation, which will last the New Year.

Market may remain volatile

The market continues to see volatility ahead of the expiry of December 2006 derivatives contracts. According to dealers, an early rollover/squaring up is happening in derivatives contracts this time as foreign fund managers will be on Christmas and New Year holiday. December 2006 derivatives contracts expire next Thursday (28 December).

FIIs pressed substantial sales for the second day in a row on Wednesday (20 December). Their net outflow was Rs 365.10 crore on 20 December compared to an outflow of Rs 673.40 crore on 19 December. The outflow in two trading sessions between 19 December and 20 December aggregated Rs 1038.50 crore.

But the provisional data pertaining on Thursday (21 December)’s trade showed that FIIs were net buyers to the tune of Rs 254 crore on that day. They were net sellers to the tune of Rs 301 crore in index-based futures. They were net buyers to the tune of Rs 52 crore in individual stock futures.

Mutual funds stepped up buying on 20 December. They bought shares worth a net Rs 460 crore on that day.

As foreign fund managers will be on a holiday for Christmas and the New Year, operators and mutual funds will dictate the activity on the bourses till the year-end, according to dealers.

The near term trigger for domestic bourses is Q3 December 2006 results. Market men expect December 2006 quarter to be another strong quarter in terms of earnings growth. Strong advance tax payments corroborate the view that Q3 results would be strong. Cement companies and oil firms have paid substantially higher advance tax in the third installment of 15 December 2006. State Bank of India, Tata Steel, Reliance Industries (RIL), Hindalco, L&T, and Cipla have paid substantially higher advance tax in the third installment. The Q3 results would start trickling in from about 12 January 2007.

Technical analysts feel that the Nifty has a strong support at 3,700 and Sensex at 12,800-12,900.

Finance Minister P Chidambaram on Thursday said the country's economy would grow at nearly 9 percent this year and that it can grow at that rate or higher for several years in future.

Asian markets were mostly in the green on Thursday. Key benchmark indices in Hong Kong, Singapore, South Korea and Taiwan were up by between 0.07% to 0.5%.

US stocks dropped on Thursday as concerns that economic growth could be slowing faster than expected dented optimism about corporate profits. Reports that showed a contraction in regional business activity and a downward revision in GDP data overshadowed a fresh flurry of corporate takeovers. The Dow Jones industrial average was down 42.62 points, or 0.34 percent, to end at 12,421.25. The Standard & Poor's 500 Index was down 5.22 points, or 0.37 percent, to finish at 1,418.31. The Nasdaq Composite Index was down 11.76 points, or 0.48 percent, to close at 2,415.85.

US crude was steady at $62.66 a barrel in early Asian trade. It had declined sharply on unusually mild temperatures in the United States.

Market to remain volatile

Rollover/squaring up of positions in derivatives segment has triggered high volatility on the bourses recently. Volatility was immense on Wednesday. The total turnover on NSE’s derivatives segment surged to Rs 46081 crore on that day, the highest turnover this month.

According to dealers, an early rollover/squaring up is happening in derivatives contracts this time as foreign fund managers will be on Christmas and New Year holiday. December 2006 derivatives contracts expire next Thursday (28 December).

As per provisional data, FIIs were net sellers to the tune of Rs 354 crore on Wednesday, 20 December. They were net buyers to the tune of Rs 270 crore in index based futures and Rs 152 crore in individual stock futures on that day.

Strong economic data and reports showing robust advance tax payment by leading corporates may provide support to the market at lower level. Cement companies and oil firms have paid substantially higher advance tax in the third installment of 15 December 2006. State Bank of India, Tata Steel, Reliance Industries (RIL), Hindalco, L&T, and Cipla have paid substantially higher advance tax in the third installment.

FDI inflow in India touched $6.1 billion in first 7 months April-October 2006 period compared to an inflow of $2.6 billion in the same period last year. India’s exports during the 8 months April-November 2006 rose 39% to $79.59 billion.

Asian markets were mixed on Thursday. Key benchmark indices in Japan, Singapore and Taiwan were up by between 0.04% to 0.2%. Key benchmark indices in Hong Kong and South Korea were down by between 0.07% to 0.18%.

US stocks edged lower on Wednesday in light trading as a disappointing outlook from FedEx Corp. pulled down transport stocks and offset the positive influence of the latest round of proposed takeovers. The Dow Jones industrial average dipped 7.45 points, or 0.06 percent, to end at 12,463.87, while the Standard & Poor's 500 Index edged down 2.02 points, or 0.14 percent, to finish at 1,423.53. The Nasdaq Composite Index fell 1.94 points, or 0.08 percent, to close at 2,427.61.

Oil slid 45 cents to $63.27 after jumping to a three-month high above $64 a barrel on Wednesday, spurred by a steep drop in US crude inventories