Market may drift lower

Profit booking may take place after Monday’s 322-point surge in the Sensex. Market men say the undertone remains cautious. Caution on the bourses is due to concerns that rising interest rates will slow economic growth. Late last month, RBI had announced a surprise rate hike. Nevertheless, a poll carried by a newspaper on Monday showed that corporate chieftains are bullish on business prospects for the current financial year (FY 2008), rising interest rates notwithstanding. That in turn aided Sensex’s rally on Monday. The rally was also part of a global rally triggered by strong US job data.

Asian markets were mixed on Tuesday (10 April). Key benchmark indices in China, Japan, South Korea and Taiwan were down by between 0.3% to 0.5%. Key benchmark indices in Hong Kong and Singapore were up by between 0.01% to 0.4%

Bank of Japan (BoJ)’s two-day policy meeting concludes today. The BoJ is seen keeping the overnight call rate unchanged at 0.5% at the meeting. Investors will look for clues about the BoJ's view on prices, as well as the health of the economy, in comments from BoJ Governor Toshihiko Fukui at a post-meeting news conference.

US stocks closed flat on Monday (9 April) as news that billionaire investor Warren Buffett had bought stakes in the railroad sector and strong jobs data offset worries about earnings and subprime loans. The Dow Jones industrial average rose 8.94 points, or 0.07 percent, to end at 12,569.14. The Standard & Poor's 500 Index gained 0.85 of a point, or 0.06 percent, to finish at 1,444.61. But the Nasdaq Composite Index dipped 2.16 points, or 0.09 percent, to close at 2,469.18.

US crude oil for May delivery fell $2.77 to settle at $61.51 a barrel on Monday on some profit-taking after Iran's release last week of captured British sailors and marines.

FIIs resumed buying of equities on Thursday 5 April. FIIs bought shares worth a net Rs 567.50 crore on Thursday. Earlier, FIIs were net sellers for three days in a row from Monday 2 April to Wednesday 4 April. As per provisional data, FIIs were net buyers to the tune of Rs 493 crore on Monday 9 April, the day when Sensex had surged 322 points in global rally.

FIIs were net buyers to the tune of Rs 430 crore in index-based futures on Monday. They were net buyers to the tune of Rs 181 crore in individual stock futures on that day.

Infosys’ FY 2008 guidance is the next major trigger for the market. The rupee’s sharp surge in late-March 2007 - early April 2007, and mixed reports from the US economy, have raised concerns that the FY 2008 guidance by Infosys Technologies may turn out conservative. Infosys unveils full year guidance at the beginning of the financial year along with Q4 March results, due on 13 April 2007.