Market may edge lower on weaker Asian markets

The market may edge lower today, 18 May 2007, tracking weaker global markets and on a surge in crude oil price. Domestic bourses have been closely following global markets in recent years. But data showing a surge in FII inflow on Thursday 17 May 2007 may cap downside. The key data today is the weekly inflation data. The important key Q4 results today are Tata Motors and Dr. Reddy’s Laboratories.

As per provisional data, FIIs were net buyers to the tune of Rs 518 crore on Thursday 17 May 2007, the day when Sensex had surged 172 points on the back of gain in index heavyweights. Domestic institutional investors were net buyers to the tune of Rs 634 crore on that day.

FIIs were net sellers to the tune of Rs 139.20 crore on Wednesday 16 May 2007 compared to their outflow of Rs 330.80 crore on Tuesday 15 May 2007. There has been lack of direction regarding FII investment this month. Their outflow this month till Wednesday 16 May 2007 totaled Rs 693 crore.

The wholesale price inflation rate is forecast at 5.30% for the 12 months to 5 May 2007, lower than an annual 5.66% a week before. The data will be released around 12:00 IST today, 18 May 2007. The annual inflation rate hit 6.69% on 27 January 2007, its highest in more than two years, but has moderated since as the central bank has tightened policy and the government cut duties on a range of items to rein in prices.

Weakness in major metal and mining shares pulled Asia-Pacific stocks lower on Friday, 18 May 2007. Key benchmark indices in Hong Kong, Australia, China, Japan, Singapore and South Korea were down by between 0.18% to 0.9%.

US stocks edged lower on Thursday 17 May 2007 as an upbeat report on business conditions in the mid-Atlantic region, coupled with data suggesting strength in the job market, signalled a reduced chance of interest-rate cuts. The Dow Jones industrial average declined 10.81 points, or 0.08%, to end at 13,476.72. The Standard & Poor's 500 Index dipped 1.39 points, or 0.09%, to finish at 1,512.75. The Nasdaq Composite Index shed 8.04 points, or 0.32%, to close at 2,539.38.

Brent crude oil prices surged more than $2 to a fresh 8-month high above $70 a barrel on Thursday 17 May 2007 as US refinery problems fanned concerns about potential gasoline supply bottlenecks just before the summer-driving season begins.