Sensex to test 14000

The market is likely to edge higher and it may test the psychologically important 14000 level tracking firm global markets. After Friday (20 April)’s 278 points surge to 13897.41, Sensex is just about 100 points away from 14000 level. However, volatility may rise ahead of expiry of April 2007 derivatives contracts on Thursday (26 April). FII inflow remains strong.

FIIs stepped up buying after Infosys gave a strong guidance for FY 2008 in dollar terms, putting to rest concerns about the impact of a slowdown in the US on India's IT sector. Their net inflow in three trading sessions, between 16 April and 18 April, aggregated Rs 2076.90 crore. However, foreign funds pulled out a net Rs 73.40 crore on 19 April. Their inflow for April 2007, till Thursday 19 April 2007, totaled Rs 4371 crore.

As per provisional data, FIIs were net buyers to the tune of Rs 622.51 crore on Friday 20 April, the day when Sensex had surged 278 points on the back of strong guidance for FY 2008 by IT bigwig Satyam Computer and on firm global markets. Domestic institutional investors were net buyers to the tune of Rs 130 crore on Friday.

The Reserve Bank of India is expected to hold interest rates steady at its policy review on Tuesday (24 April). The central bank will also set out its forecasts for the year, including inflation and growth.

Monday (23 April) is the fourth of seven stages in the ongoing assembly election in Uttar Pradesh. The vote is seen as a barometer of national political trends. Some opinion polls show the opposition Bharatiya Janata Party could emerge second in the race, adding further to the woes of the ruling Congress which is battling rising prices.

Asian shares rose on Monday (23 April), with benchmark indexes in South Korea and China hitting records, after stronger-than-expected US corporate earnings boosted optimism about the outlook for the region's top export market. China's benchmark index roared up 1.7 percent, racing past its previous all-time high, as inflation worries receded.

US stocks jumped on Friday (20 April), with the Dow closing at a record high after coming within 35 points of 13,000, as Google Inc. and Caterpillar Inc. joined the list of companies reporting stronger-than-expected quarterly results. The Dow Jones industrial average rose 153.35 points, or 1.20 percent, to end at 12,961.98, its third straight record close. The Standard & Poor's 500 Index > was up 13.62 points, or 0.93 percent, at 1,484.35. The Nasdaq Composite Index was up 21.04 points, or 0.84 percent, at 2,526.39.

The dollar sat near a two-year low against the euro, staying weak on the view the Federal Reserve may cut US interest rates at least once this year, while rates in the euro zone are expected to climb.

Oil prices were steady after weekend elections in OPEC member Nigeria were condemned by monitors but did not appear to have worsened disruption to the country's crude exports. London's Brent crude edged up 5 cents to $66.54, pausing after gaining 55 cents on Friday.