A sharp fall in Asian indices in the ongoing trades may see the market resume on a weak note and could slip further during intra-day trades on sharp volatility.
Weakness across the global markets and rising global crude oil prices may drag down the local indices. Nervousness in the market is likely to continue following a slump in the overnight US market, escalating global crude oil prices and weak Asian indices in the morning trades. All the leading Asian indices like the Nikkie, the Hang Seng, the Straits Times, the Kosps index and the Jakarta index are down over 2-4% each. Although the domestic indices moved up sharply in the last couple of sessions, intra-day volatility remains the major concern. Among the local indices, the Nifty may slip to 3950 while on the upside it could test the 4040 level. The Sensex has a likely support at 13100 and could test higher levels at 13400.
US indices tumbled as the government's emergency rescue of AIG amplified fears about the stability of financial markets, as result the Dow Jones slumped 449 points to close at 10610 while the Nasdaq ended 109 points lower at 2099 on Wednesday.
All the Indian ADRs fell in tune with the broader market. Rediff led the slump and tumbled 8.16% followed by ICICI Bank down by 7.66%, Satyam, Infosys, Wipro, HDFC Bank and MTNL slipped over 5-6% each. Dr Reddy, Tata Motors, VSNL and Patni Computers dropped over 2-4% each.
Crude oil prices moved up sharply as Wall Street's precipitous decline sent investors scrambling to find other places to park their money. The Nymex light crude oil for September series rising by $6.01 at $97.16 a barrel. In the commodity space, the Comex gold for December delivery flared up by $70 to settle at $850.50 a troy ounce.
Daily trend of FIIs investment in equities
On September 16, 2008, FIIs were net sellers of stocks to the tune of Rs1241 crore (purchases worth Rs3,092 crore and sales of Rs4,333 crore).
