The market may open on a firm note following reports that the centre and states have agreed to phase out central sales tax (CST) over the next four years. According to the agreement, CST, currently levied at 4% will be cut by one percentage point every year over the next four years.
According to derivatives dealers, the derivative segment gives bullish signals and the uptrend on the bourses may continue in the near term.
The next major trigger for the market is Q3 December 2006 results. While strong Q3 results are already factored in share prices, market players will be closely watching what the company managements have to say about outlook for Q4 March 2007 and FY 2008 (year ending 31 March 2008). Infosys kickstarts Q3 earnings season on 11 January.
After Q3 results, the market will be eyeing the Union Budget 2007-08. A build up of long positions is likely on expectations of favourable policy announcements in the budget, according to dealers.
As per provisional data, FIIs were net buyers to the tune of Rs 168 crore on Wednesday 3 January, the day when Sensex had gained 73 points and settled above 14,000 level for the first time. They were net buyers to the tune of Rs 128 crore in index-based futures and they net bought Rs 43 crore of individual stock futures on that day.
Asian markets were mixed on Thursday (4 January 2007). Key benchmark indices in Japan, and Taiwan were up by between 0.4% to 0.7%. Key benchmark indices in Hong Kong, South Korea and Singapore were down by between 0.08% to 1.2%.
US stocks ended little changed in their 2007 debut session on Wednesday, as minutes from the Federal Reserve's latest meeting renewed concerns about the strength of the economy and corporate profits and halted an early rally. The Dow Jones industrial average rose 11.37 points, or 0.09 percent, to end at 12,474.52. The Standard & Poor's 500 Index slipped 1.67 points, or 0.12 percent, to finish at 1,416.63. The Nasdaq Composite Index advanced 7.87 points, or 0.33 percent, to close at 2,423.16.
Oil price declined sharply on Wednesday. US crude oil for February delivery fell $2.73, or 4.5 percent, to settle at $58.32 a barrel.