The market may move in a narrow range today tracking similar trend in Asian markets. The market had settled on a subdued note on Tuesday 15 May 2007 tracking negative cues from global markets. Sensex had lost 36.53 points or 0.26% to settle at 13,929.33.
A strong rebound on the domestic bourses had materialized, last month as the initial Q4 March 2007 results were strong and Infosys issued a strong guidance for FY 2008 on 13 April 2007. From 12,455.37 on 2 April 2007, the Sensex had surged 1,773.51 points (14.2%) to 14,228.88 on 26 April 2007. It has since then turned volatile.
Asian markets were mostly in the green on Wednesday, 16 May 2007, but their gains were muted as investors digested a mixed bag of US data. Key benchmark indices in Hong Kong, China, Singapore, South Korea and Taiwan were up by between 0.03% to 0.8%.
The Dow industrials rose to a record high close on Tuesday, 15 May 2007, as signs of stabilizing inflation raised the prospect of lower interest rates, boosting the outlook for business investment. But the Dow ended well off its highs of the day and the S&P 500 index and the Nasdaq declined as disappointing results from some retailers and a report showing US home builder confidence fell in May raised concerns about consumer spending. The Dow rose 37.06 points, or 0.28 percent, to end at 13,383.84, a record close. The Dow also hit a record intraday high of 13,481.60.
The Standard & Poor's 500 Index was down 1.96 points, or 0.13 percent, at 1,501.19. The Nasdaq Composite Index was down 21.15 points, or 0.83 percent, at 2,525.29.
Over the next few months, the progress of the June-September monsoon will hold the key to the direction of the domestic bourses. The Indian meteorological department on Monday, 14 May 2007, forecast annual monsoon rains would arrive in Kerala on 24 May 2007. The weather office said last month that this year's monsoon rains were likely to be 95% of the long-term average, with a five per cent margin of error. The annual monsoon is vital for India's economic health as it provides the main source of water for agriculture, which generates more than a fifth of gross domestic product (GDP).
Some important March 2007 quarter results are scheduled this week and the market will take its cue from these results. Bajaj Auto and Tata Steel report Q4 results on Thursday, 17 May 2007. The board of Bajaj Auto will also consider proposal to split the company into two. Tata Motors and Dr Reddy's Laboratories unveil Q4 results on Friday, 18 May 2007.
FIIs resumed buying of equities on Monday 14 May 2007 but the quantum of their inflow was small. FIIs were net buyers to the tune of Rs 60.50 crore on 14 May compared to an outflow of Rs 336.20 crore on Friday 11 May 2007. FIIs have been net buyers since last month, but there have been bouts of outflows from them since the past few days. Their outflow for May 2007, till 15 May 2007, totaled Rs 222.70 crore. FIIs had made heavy purchases in April 2007, aiding the market stage a solid rebound from lower level. Their inflow in April 2007 totaled Rs 6679.20 crore.
As per provisional data, FIIs were net sellers to the tune of Rs 284 crore on Tuesday, 15 May 2007, the day when Sensex had lost 36.53 points. Domestic institutions were net sellers to the tune of Rs 60 crore on that day.