May derivatives expiry to swing the market

The market is expected to stay highly volatile throughout the day’s trading sessions, as derivative contracts for the May 2007 series expire today.

As per market data, the marketwide rollover stands at 63%, while the Nifty rollover is 59%.

Local markets, which have been tracking global markets closely, may show strength today, as Asian benchmarks were broadly trading with gains. Japanese Nikkei 225 index surged 1.10% or 193.15 points at 17,781.41 while Hong Kong's Hang Seng index advanced 0.96% or 194.48 points at 20,488.24. Taiwan's Taiwan Weighted (up 0.75% or 60.98 points at 8,208.32), South Korea's Seoul Composite (up 1.66% or 27.61 points at 1,690.33) also posted gains. However, Singapore's Straits Times lost 0.45% or 15.95 points at 3,511.13.

Cues from the US markets were also encouraging with the Wall Street rising and sending the Standard & Poor's 500 index to its first record close in more than seven years, as investors grew more confident that the Federal Reserve might cut interest rates in the second half of 2007. The Dow Jones industrials also reached a new high close.

The S&P 500, surpassed the record of 1,527.46, set 24 March 2000, at the peak of the dot-com boom, closing at 1,530.23, up 12.12 points, or 0.80%. The S&P 500, which crossed its closing record on May 21 and then retreated, remains below its all-time trading high of 1,552.87, also reached in March 2000.

The Dow Jones Industrial Average surged 111.74 points or 0.83% to 13,633.08, and also reached a new all time high of high of 13,636.09. The Nasdaq Composite index rose 20.53 points, or 0.80%, at 2,592.59.

Oil prices fell on Thursday ahead of the release of a U.S. government report expected to show U.S. crude and gasoline supplies rose last week. Light, sweet crude for July delivery dropped 13 cents to $63.36 a barrel in Asian electronic trading on the New York Mercantile Exchange, midmorning in Singapore. The contract on Wednesday rose 34 cents to settle at $63.49 a barrel.

July Brent crude lost 4 cents to $67.80 a barrel on the ICE Futures exchange in London, after tumbling 50 cents overnight to settle at $67.84 a barrel.