Weak Asian markets may trigger profit taking

The market is likely to edge lower tracking subdued to weak trend in key Asian markets. Caution is likely to prevail ahead of RBI’s policy review at 12:00 IST. Opinion is divided on whether RBI will raise short-term interest rates. The central bank will also set out its forecasts for the year, including inflation and growth.

The market had got a boost over the past few days on the back of strong Q4 results announced so far and also due to strong guidance for FY 2008 by IT majors Infosys and Satyam Computer. Healthy FII inflow aided the surge. The major Q4 result today is that of car major Maruti Udyog.

Volatility may rise in the near term ahead of expiry of April 2007 derivative contracts on Thursday (26 April).

UP election is a key political event to watch for in the near term. Monday (23 April) was the fourth of seven stages in the ongoing assembly election in Uttar Pradesh. The UP vote is seen as a barometer of national political trends.

FIIs have stepped up buying after Infosys gave a strong guidance for FY 2008 in dollar terms, putting to rest concerns about the impact of a slowdown in the US on India's IT sector. Their inflow for April 2007, till Friday (20 April 2007), aggregated Rs 5120 crore.

As per provisional data, FIIs were net sellers to the tune of Rs 142.49 crore on Monday 23 April. Domestic institutional investors were net buyers to the tune of Rs 258 crore on that day.

Asian stocks slipped on Tuesday as surging oil prices and the crisis in US mortgage lending raised fears of slowing spending in the region's top export market, hurting shares in firms dependent on US demand. Key benchmark indices in Hong Kong, Japan and Singapore were down by between 0.25% to 0.85%. Key benchmark indices in China, Taiwan and South Korea were up by between 0.14% to 0.39%.

US stocks fell on Monday after oil prices rose and a General Motors executive said the crisis in US mortgage lending hurt US auto sales this month, stirring concerns of an even wider economic impact. The Dow Jones industrial average was down 42.58 points, or 0.33 percent, at 12,919.40. The Standard & Poor's 500 Index was down 3.42 points, or 0.23 percent, at 1,480.93. The Nasdaq Composite Index was down 2.72 points, or 0.11 percent, at 2,523.67. Earlier during the day, the Dow industrials hit an intraday record high of 12,983.92.

The dollar sat not far from a two-year low against the euro, staying under pressure as traders awaited US housing data, due later in the day, which could offer clues on the direction of Federal Reserve interest rate policy.

Oil paused after leaping around 3 percent on Monday amid fears of disruption to Nigerian supplies after a weekend presidential election was condemned by monitors. London Brent crude currently seen as a better benchmark for world oil prices than US crude, fell 22 cents to $67.93 a barrel, after jumping $1.66 on Monday.