Market may extend gains

The market may extend gains on expectations of good Q3 December 2007 results. However, concerns over slower global growth and record high crude oil prices may cap gains. Inflow from foreign institutional investors (FIIs) hold key.

FIIs bought shares worth Rs 5579.10 crore in the month of December 2007. FIIs had sold shares worth Rs 5,849.90 crore in the month of November 2007. FII inflow in calendar year 2007 totaled Rs 71,486.50 crore as compared to Rs 36,539.70 crore in 2006.

Mutual funds were net buyers of shares worth Rs 3203 crore in the month of December 2007.

The 30-share BSE Sensex rose 479.94 points or 2.38% to 20,686.89, a record closing high, in the week ended 4 January 2008. The S&P CNX Nifty gained 135.70 points or 2.21% to 6274.30, a record closing high, in the week.

IT bellwether Infosys Technologies will announce results on 11 January 2008.

Small-cap and mid-cap stocks may continue their rally on momentum buying, as indicated by strong market breadth in the past few days. The BSE Small-Cap index surged 982.82 points or 7.62% to 13,884.11 in the week. The BSE Mid-Cap index rose 538.49 points or 5.62% to 10,113.06 in the week.

Of late, global markets have come under selling pressure on concerns that credit market crisis may intensify further. Any major sell-off there may cast its shadow here as well. The influential US non-farm payrolls data for December 2007 which is due on Friday, 4 January 2008, will set the tone for global markets.

Crude oil closed lower on Thursday, 3 January 2008 after hitting another record high of $100.09 earlier in the session. Light sweet crude for February delivery finished at $99.18, down 44 cents on the NYMEX.

Inflation based on the wholesale price index (WPI) moved up to 3.50% for the week ended 22 December 2007, as compared with 3.45% in the week ended 15 December 2007, primarily due to the increase in prices of manufactured goods and fuel items.

While addressing a press conference in Chandigarh leader of opposition L K Advani, on 30 December 2007, stated that the Bharatiya Janata Party (BJP) was on a comeback trail. Advani added BJP's victories in Gujarat and Himachal Pradesh assembly elections would change India's political scene.