Market may remain range bound

The market may remain range bound tracking flat global markets. Investors are unlikely to build major positions ahead of major local and global events scheduled later in the week. Another reason why market participants have turned cautious is because the Indian market had remained weak in the month of May over the past few years. It may be recalled that the market had witnessed a sharp fall last year during the period May-June 2006.

The key event to watch out for is the outcome of assembly polls in Uttar Pradesh (UP). Polling for the seventh and final phase of polls in Uttar Pradesh got over on Tuesday (May 8) and counting of votes is due on 11 May 2007, with results expected the same day. The UP vote is seen as a barometer of national political trends.

Asian shares were flat on Wednesday, halting a recent strong run. Caution ahead of the outcome of the Fed meeting and a rebound in oil prices kept a lid on Asian markets.

US stocks closed flat on Tuesday as investors locked in profits after five straight sessions of gains in blue chips, a day before the Federal Reserve's meeting on interest rate policy. The Dow Jones industrial average dipped 3.90 points, or 0.03 percent, to end at 13,309.07, after earlier falling as much as 75 points. The Standard & Poor's 500 Index slipped 1.76 points, or 0.12 percent, to finish at 1,507.72. But the Nasdaq Composite Index edged up 0.80 point, or 0.03 percent, to close at 2,571.75.

While no one expects a rate move by the US Federal Reserve, when it meets on Wednesday, investors are keenly awaiting the central bank's latest assessment of the world's biggest economy. The Bank of England is seen lifting rates to 5.5% on Thursday, a move that would put British interest rates above those in the United States for the first time since January 2006. The European Central bank (ECB) is expected to hold its rates steady at 3.75% on Thursday, but signal a hike in June.

A spate of merger and acquisition activity, as well as increasingly eye-popping takeover bids have helped propel many global indices to record highs in recent days, supporting the view that the bull market has to run further.

FIIs remained in buying mode on the bourses on Monday 7 May 2007. FIIs were net buyers to the tune of Rs 96.70 crore on Monday. But the inflow was lower than their inflow of Rs 212 crore on Friday (4 May). As per provisional data, FIIs were net sellers to the tune of Rs 205 crore on Tuesday 8 May 2007, the day when Sensex had lost 114 points. Domestic institutional investors were net sellers to the tune of Rs 124.54 crore on Tuesday.

Corporate results announced so far have been strong. The major Q4 result today is that of drug maker Lupin.

Oil prices rebounded to above $65 a barrel on Wednesday as new attacks on Nigeria's oil industry deepened supply losses, interrupting a six-session losing streak that had driven prices to their lowest level since March 26. London Brent crude was up 6 cents at $65.60 a barrel.