Monday, the Indian market is likely to open lower following mixed global cues amid the worsening global economic environment. Net selling by foreign funds and political uncertainty ahead of the impending elections in April-May may keep underlying sentiment cautious, but short covering ahead of public holidays on Tuesday and Wednesday on account of Id-e-Milad and Holi could help the market cut losses.
With foreign funds pulling out money from the emerging markets, the extent of support from domestic financial institutions may influence market movement for the day. On a net basis, foreign funds sold shares worth Rs.2, 681.57 crore thus far in March and Rs. 10,687.84 from the start of 2009, according to provisional figures released by the Bombay Stock Exchange.
After failing to sustain an early rally, stocks on Wall Street experienced substantial volatility over the course of the trading session on Friday. The major averages eventually ended the session mixed following a late-day recovery. Despite the mixed performance for the session, the major averages all closed sharply lower for the week. The Dow posted a weekly loss of 6.2 percent, while the Nasdaq and the S&P 500 fell 6.1 percent and 7 percent for the week, respectively. Currently, markets across the Asia-Pacific region are also trading mixed.
In the United States, unemployment rate in February had risen to the highest in 25 years. A report released by the US Labor Department showed that non-farm payroll employment fell by 651,000 jobs in February, with the decrease coming in roughly in line with economist estimates of a decrease of 650,000 jobs. In another development, the U.S. Senate put off a final vote on a $410 billion spending package until next week after Republicans demanded time to offer more amendments.
The British government confirmed Saturday that it will take a majority stake in Lloyds Banking Group. The measure takes the UK government a step closer to controlling the British banking system. The government already has a majority share of Royal Bank of Scotland and Northern Rock.
Back home, the Indian market slumped to a 3-year low last week, as grim economic data and heavy selling by foreign funds weighed on the market. A decline in India's exports for the fourth straight month and weak global cues also dampened investor sentiment. Meanwhile, investors gave little attention to rate cut announcements made by the RBI. The BSE Sensex closed at 8,326, down 566 points or 6.36% for the week and the S&P CNX Nifty index fell 143 points or 5.19% to 2620.
Source : RTT News