Oct 10, 2008

Markets expected to open flat to down, but could witness a pullback later during the day.

29 Sep 2008 | 10:02
Markets expected to open flat to down, but could witness a pullback later during the day.

The Indian Market continued its downtrend on Friday, as the BSE Sensex closed at 13102.2, down by 3.3% over Thursday’s close. The Nifty opened down on account of negative global cues & remained weak through the day.
Towards the end it made an intra-day low of 3970.35 before closing at 3985.25, down by 3.1% over Thursday’s close. The NSE cash turnover stood at Rs. 10500 crores in comparison to Rs. 15311 crores on Thursday. The market breadth was negative on BSE with the advance-decline ratio of 1:5. Among the sectoral indices, only FMCG outperformed, increasing by 1%. However, the rest of the indices ended in the red with Realty, Metals & Banks falling the most by 6.3%, 4.8% & 4.3% respectively.

The US markets closed on a positive note on Friday on hopes that Congress would come up with a deal on the proposed package to rescue the beleaguered U.S. financial sector & contain fallout from the global credit crisis. Dow Jones & S&P 500 increased by 1.1% & 0.3% respectively. However, Nasdaq closed marginally down by 0.2%. The Indian ADRs ended weak with Infosys, Wipro & Satyam decreasing by 1.8%, 2.8% & 1.2% respectively. ICICI & HDFC Bank decreased by 9.1% & 4% respectively. Tata Communications decreased by 10.1%. Among the Latin American markets, the Mexican markets decreased by 0.2%, while Brazilian Market closed down by 2%. Among the Metal prices, Aluminium & Copper increased by 1.2% & 0.3% respectively, Zinc & Nickel increased by 1.5% & 1.7% respectively. The light crude oil for November decreased by 1.1% to settle at $106.9 a barrel. Today, the Asian Markets are trading weak with Hang Seng & Singapore trading down by 1.9% & 0.4%, while Kospi is trading down by 1.1%.

On Thursday, the FIIs were net sellers of Rs. 704 crores in the cash markets, while they were net sellers of Rs. 420 crores in the F&O Markets.
Mutual Funds were net buyers of Rs. 379 crores. As per the provisional figures, FIIs were net sellers of Rs. 643 crores in the cash market on Friday, while they were net buyers of Rs. 173 crores in the F&O markets.

Today, we expect the Markets to open flat to down initially. However, it could witness a pullback later, since the U.S. House of Representatives approved the nuclear agreement on Saturday. Also the $700 bn bailout package is close to getting finalized, which could improve the market sentiments.