Market likely to open slightly lower on mixed global cues

Domestic indices are geared for a slightly lower start on mixed cues from global shores. The SGX Nifty futures for August 2009 expiry was down 9.5 points in Singapore. However, revival in monsoon rains, crucial for India's domestic demand driven economy may lift sentiments. On the flip side the sustained selling by foreign funds may weigh on the bourses. Meanwhile the likely progress of the ongoing gas dispute between the Ambani brothers may also influence markets.

Asian markets were trading mixed today, 21 August 2009. Key benchmark indices in China, South Korea and Taiwan were up by between 0.24% and 0.73%. However indices in Japan, Honk Kong, and Singapore were down by between 0.52% and 1.54%

US markets extended their winning streak for a third straight day on Thursday, 20 August 2009 after some positive economic data, including an encouraging report on manufacturing. The jump in the manufacturing index supported gains in the US market. The Dow Jones industrials gained 70.89 points, or 0.8%, to 9,350.05. The S&P 500 index added 10.91 points, or 1.1%, to 1,007.37, while the Nasdaq Composite Index gained 19.98 points, or 1%, to 1,989.22.

In economic data, the Philadelphia Federal Reserve branch said its gauge of manufacturing activity in the region rose to 4.2 in August 2009 from minus 7.5 in July 2009.

Leading indicators rose 0.6% in July 2009, inline with expectations, according to a report from the conference board. But not so encouraging numbers on the jobs front. Initial jobless claims for the week ending august 15 rose by 15,000, the final figure coming in at 576,000. Continuing claims made a slight advance to 6.24 million.

As per the provisional figures on NSE, foreign funds sold shares worth Rs 438.19 crore and domestic funds bought shares worth Rs 489.42 crore on Tuesday, 20 August 2009.

Foreign funds have resorted to selling after sustained inflows for five prior months. FII outflow in August 2009 totaled Rs 396.30 crore (till 19 August 2009). They had bought equities worth Rs 11,625.20 crore in July 2009. FII inflow in calendar year 2009 totaled Rs 35,773.40 crore.

Meanwhile, in a move that will streamline the rights issue process, the Securities and Exchange Board of India (Sebi) on Thursday, 20 August 2009 rationalised the disclosure requirements for rights issues. A rights issue is further issuance of capital by listed entities to existing shareholders.

Sebi has reduced the time period for finalisation of the basis of allotments in rights issues to 15 days from 42 days. The guidelines will be applicable for all rights issues where offer documents have been filed on or after the circular.

The cumulative rainfall deficit in the country has reportedly narrowed to 27% during the period from 1 June 2009 to 18 August 2009 from 29% during the period from 1 June 2009 to 12 August 2009. Annual monsoon rains, running between June to September, are the main source of irrigation for farms and are crucial for Asia's third-largest economy as more than two-thirds of the people live in villages and 60% of the farm land depends on the annual rains.

Meanwhile, the government will speak in one voice on the Krishna-Godavari gas row, Law Minister M Veerappa Moily said on Thursday, 20 August 2009 after the ministerial panel set up to coordinate the government's position on the issue met for the second consecutive day late Thursday night. A statement in this regard is expected to be issued today, 21 August 2009.

Prime Minister Manmohan Singh had formed the panel to coordinate the government's legal stand over two overlapping disputes - supply of gas by Mukesh Ambani-headed Reliance Industries (RIL) to Anil Ambani's Reliance Natural Resources Limited (RNRL), being heard in the Supreme Court, and between Reliance Industries and state-run power utility NTPC, which is being adjudicated in the Bombay High Court.