Derivatives expiry for June 2008 series to keep markets choppy

Local equities are likely to edge higher in opening trade today tracking advances in global markets. steady fall in crude oil prices will boost the sentiment further. Volatility is likely to remain high today as derivatives contracts for June 2008 series expire. As per reports, the marketwide rollover of positions from June 2008 series to July 2008 series stood at 62.50% while that of Nifty was 63%, as on Wednesday, 25 June 2008.

The US Federal Reserve eased investors concerns about an aggressive interest rate hike. The Federal Reserve in its two-day which ended yesterday, 25 June 2008, meeting held its key interest rate steady at 2% and reduced expectations for a rate hike at its next meeting.

Asian markets were trading higher today, 26 June 2008. China's Shanghai Composite surged 0.78% or 22.52 points at 2,927.53, Japan's Nikkei advanced 0.43% or 59.43 points at 13,889.35, Hong Kong's Hang Seng rose 0.71% or 160.72 points at 22,795.88, Taiwan Weighted gained 0.31% or 24.29 points at 7,879.35, Straits Times was up 0.62% or 18.50 pointsat 3,005.12. and South Korea's Seoul Composite shot up 0.85% or 14.53 points at 1,732.32

US markets ended on a positive note yesterday, 25 June 2008 after some volatile action following the Fed's decision to keep interest rates unchanged. The Dow Jones industrial average advanced 4.40 points, or 0.04%, to 11,811.83. The Standard & Poor's 500 index gained 7.68 points, or 0.58%, to 1,321.97, and the Nasdaq composite index was up 32.98 points, or 1.39%, to 2,401.26.

Back home, equities staged a solid rebound yesterday, 25 June 2008 after touching fresh calendar 2008 lows in early trade. The initial jolt was caused by the Reserve Bank of India's move late evening yesterday, 24 June 2008, to hike the key lending rate in an aggressive attempt to combat over 11% inflation.

The 30-share BSE Sensex gained 113.49 points or 0.80% at 14,220.07 and the broader based S&P CNX Nifty surged 61.55 points or 1.47% at 4,252.65 on that day

As per provisional data, foreign funds sold shares worth a net Rs 363.71 crore while domestic mutual funds bought shares worth a net Rs 529.87 crore yesterday, 25 June 2008.

Foreign institutional investors (FIIs) were net buyers of Rs 110.71 crore in the futures & options segment yesterday, 25 June 2008. They were net buyers of index futures to the tune of Rs 1099.50 crore and sold index options worth Rs 720.12 crore. They were net sold of stock futures to the tune of Rs 282.69 crore and bought stock options worth Rs 14.02 crore.

Meanwhile, crude oil prices retreated after government inventory data showed a surprise increase in domestic crude supplies last week. On the New York Mercantile Exchange, August crude settled down $2.45, or 1.79%, at $134.55 a barrel yesterday, 25 June 2008.

The UPA-Left committee on the India-United States nuclear deal decided to convene another meeting to finalise its findings in the committee’s ninth meeting held yesterday, 25 June 2008.

Meanwhile the Prime Minister Manmohan Singh and Congress president Sonia Gandhi on Wednesday, 25 June 2008 night discussed the outcome of the meeting of the United Progressive Alliance-Left panel on the India-U.S. Nuclear Agreement. As per reports, the Congress president would consult allies before taking a decision on going ahead with the nuclear deal.

Meanwhile the Government's revenue collections from direct tax such as corporate and income tax continued the growth momentum and was up by 43.45% at Rs 49,411 crore during the April-June period (as of 21 June 2008) over the corresponding period last fiscal. The collection from corporate income tax stands at Rs 30,655 crore, growing by 39.81% over previous year, while the collection from personal income tax stood at Rs 18,756 crore showing a growth rate of 49.82% over previous year.