Market seen higher in choppy trade

Key benchmark indices are likely to head in opening trade today, 17 October 2008 as indicated by the SGX October 2008 Nifty futures which rose close to 50 points. Also reports of several measures by the Reserve Bank of India to enhance liquidity in equity markets may lift sentiment. Global cues were mixed as worries about a slowing global economy keep investors on the sidelines.

In what could be a major boost for the ailing market, the government has reportedly sought data from the Reserve Bank of India to consider a proposal to enhance the investment limit for bank exposure to equity markets. This will be part of several measures to boost domestic institutional participation in the markets at a time when foreign institutional investors (FIIs) are exiting. At present, a bank can invest up to 20% of net worth in a single company and up to 40% of net worth in a group.

US crude for November 2008 delivery rose $2.74 to $72.59 a barrel today, 17 October 2008 rebounding from a 15-month low below $70 yesterday, 16 October 2008 on a late rally on the Wall Street and growing expectations of an OPEC production cut.

Asian markets were trading mixed today, 17 October 2008. China's Shanghai Composite was up 0.65% or 12.47 points at 1,922.42, Japan's Nikkei rose 1.53% or 129.66 points at 8,588.11. However, Hong Kong's Hang Seng was down 0.80% or 121.66 points at 15,108.86, Singapore's Straits Times slipped 0.29% or 5.63 points at 1,945.57, South Korea's Seoul Composite fell 2.43% or 29.48 points at 1,184.3 and Taiwan's Taiwan Weighted plunged 2.69% or 136.29 points at 4,939.68.

US markets staged a comeback in a late-day rally in highly volatile trade on Thursday, 16 October 2008, as investors snapped up beaten-down shares the day after Wall Street's worst day since the 1987 crash. The Dow Industrials surged 401.35 points, or 4.68%, to 8,979.26. The S&P 500 index advanced 38.59 points, or 4.25%, to 946.43, and the Nasdaq composite index added 89.38 points, or 5.49%, to 1,717.71.

Back home, the BSE 30-share Sensex lost 227.63 points or 2.11% to 10,581.49 and the S&P CNX Nifty ended down 69.10 points or 2.07% to 3,269.30 on Thursday, 16 October 2008, on global recession worries and on Indian stock market regulator's decision to raise margins in the derivatives segment.

Foreign institutional investors (FIIs) were net sellers worth Rs 1160.63 crore while mutual funds bought shares worth Rs 737.77 crore on Thursday, 16 October 2008, according to provisional data on NSE. FIIs were net sellers of Rs 847.30 crore in the futures & options segment on Thursday, 16 October 2008.