Fresh selling after a firm start pulled the market in the red in mid-morning trade. Global cues were positive. The market breadth was positive. Caution may prevail ahead of the release of inflation figure for the year through 24 May 2008 at 12:00 IST today. Inflation had surged to a 4-year high at 8.10% in the year through 17 May 2008. Also a revision of provisional inflation data for earlier period will be watch closely.

Crude oil climbed close to $6 on Thursday, 5 June 2008, to more than $127 per barrel as funds shifted back into oil when the dollar fell against the euro following a signal from the European Central Bank that it may raise interest rates. The crude contract climbed another 0.3% in Asian trading today.

At 11:28 IST, the 30-share BSE Sensex was down 26.06 points or 0.17% at 15,743.66. It opened 144.69 points higher at 15,914.41 and struck a high of 15,970.70 in early trade. At the days high, Sensex gained 200.98 points. Sensex lost 52.53 points at days low of 15,717.49 touched in mid-morning trade.

The broader based S&P; CNX Nifty was down 9.05 points or 0.19% at 4,667.90

The market breadth was positive on BSE with 1261 shares advancing as compared to 902 that declined. 58 remained unchanged.

The BSE Mid-Cap index rose 0.33% to 6,421.32 and the BSE Small-Cap index gained 0.52% to 7,775.72. Both these indices outperformed the Sensex.

The total turnover on BSE amounted to Rs 1537 crore by 11:30 IST as compared to Rs 839 crore by 10:30 IST.

Among the 30-member Sensex pack, 19 declined while the rest gained.

Mahindra & Mahindra, the countrys largest tractor company in terms of sales, advanced 1.96% to Rs 573.80 on thin volumes of 5542 shares. It was the top gainer from Sensex pack.

Most IT pivotals gained. Satyam Computer Services (up 0.90% to Rs 516.80), TCS (up 0.59% to Rs 988.50), and Infosys Technologies (up 0.57% to Rs 1991), edged higher from the Sensex pack.

However Indias third largest software services exporter Wipro lost 2.01% to Rs 517.80 on 1.23 lkh shares. It was the top loser from Sensex pack.

Indias largest private sector company in terms of market capitalisation and oil refiner Reliance Industries (RIL) slipped 0.30% to Rs 2241 on 5.82 lakh shares. The stock had surged to an intra-day high of Rs 2299 in opening trade.

Banking shares were mixed ahead of inflation data. ICICI Bank (up 1% to Rs 789.05) and HDFC Bank (up 0.40% to Rs 1248) advanced.

However Indias largest stare-run bank in terms of net profit State Bank of India declined 1.20% to Rs 1337.05. The bank signed an agreement with Societe Generale Securities Services, a division of Societe Generale Group, to form a joint venture company for providing custody services.

Oil & Natural Gas Corporation (down 1.59% to Rs 938), NTPC (down 1.40% to Rs 164.40), and Hindustan Unilever (down 1.37% to Rs 234.60), were the other losers from Sensex pack.

Reliance Industries was the top traded counter on BSE with turnover of Rs 141.64 crore followed by Anus Labs (Rs 86.11 crore), Cairn India (Rs 73.49 crore), Gokul Refoils (Rs 58.21 crore), and Indiabulls Real Estate (Rs 51.51 crore), in that order.

Among the side counters, HOV Services (up 20% to Rs 100.40), Josts Engineering (up 12.06% to Rs 314.90), and Indiabulls Real Estate (up 13.85% to Rs 461.60), surged.

Zandu Pharmaceutical Works was down 1.68% to Rs 10170 ahead of its board today to consider a preferential allotment of shares to the promoters.

Suzlon Energy gained 3.80% to Rs 278.80 after the company said it has signed an agreement with Areva for the acquisition of Areva's total stake of approximately 30% in REpower Systems AG, Germany. The acquisition will consolidate Suzlon Energys total holding in REpower to approximately 66%.

Spicejet surged 14.65% to Rs 35.90 on reports the Anil Dhirubhai Ambani Group has begun talks to buy the low-cost carrier. Vijay Mallya-promoted Kingfisher Airlines and the country`s largest private sector carrier Jet Airways are also said to be in fray for picking up a stake in SpiceJet.

Cairn India surged 8.05% to Rs 285.20 after the company said it has received an exploration license from the Sri Lankan government to explore oil and natural gas in the Mannar Basin. The company made this announcement after trading hours on Thursday, 5 June 2008.

BGR Energy Systems gained 1.05% to Rs 308.40 after the company said its oil & gas division has bagged a contract worth $9.29 million for manufacture of 70 oil product storage tanks for Aumara oil products depot in Iraq.

Analysts opine that higher inflationary expectations following the recent fuel price hike have given rise to fears of a cash reserve ratio (CRR) or interest rate hike by the Reserve Bank of India, which is a negative for markets. Reserve Bank of India governor YV Reddy yesterday, 5 June 2008 hinted at a possible increase in CRR in an attempt to curb inflationary expectations

Most Asian markets were trading higher today, 6 June 2008. Japan's Nikkei (up 1.29% at 14,526.71), Hang Seng (up 1.06% at 24,511.24), Taiwan's Taiwan Weighted (up 0.08% at 8,745.35), Singapore's Straits Times (up 0.67% at 3,165.10), advanced. However, China's Shanghai Composite declined 0.17% at 3,345.90.

US markets rallied yesterday, 5 June 2008 on stronger-than-expected May 2008 sales by Wal-Mart and other retailers and a surprising fall in weekly jobless claims, spurring optimism about the economy's health. The Dow Jones industrial average gained 213.97 points, or 1.73%, to 12,604.45. The S&P; 500 index advanced 26.85 points, or 1.95%, to 1,404.05, and the Nasdaq Composite index surged 46.80 points, or 1.87%, to 2,549.94

The European Central Bank said yesteday, 5 June 2008, it would keep key lending rates unchanged at 4%. The bank, however, anticipates inflation to be more persistent than previously anticipated. Also the Bank of England kept its benchmark interest rate unchanged at 5% yesterday, 5 June 2008.

Back home, frenzied buying coupled with short covering after three straight days of fall triggered a solid rally yesterday, 5 June 2008. The 30-share BSE Sensex jumped 254.93 points or 1.64% at 15,769.72 and the broader based S&P; CNX Nifty was up 91.35 points or 1.99% to 4,676.95, on that day.

As per provisional data, foreign funds sold shares worth a net Rs 1418.34 crore yesterday, 5 June 2008. Domestic funds bought shares worth a net Rs 570.03 crore on that day.

Foreign institutional investors (FIIs) were net buyers of Rs 1054.43 crore in the futures & options segment yesterday, 5 June 2008. They were net buyers of index futures to the tune of Rs 1035.25 crore and bought index options worth Rs 405.81 crore. They were net sellers of stock futures to the tune of Rs 402.85 crore and bought stock options worth Rs 16.22 crore.

Meanwhile, market regulator Securities and Exchange Board of India (Sebi) yesterday, 5 June 2008, ruled out relaxing curbs imposed last year on participatory notes (PNs), a derivative tool that enables unregistered foreign investors to invest in Indian stock markets. In October 2007, Sebi had imposed restrictions on Foreign Institutional Investors (FIIs) to issue PNs and asked FIIs and their sub-accounts not to issue fresh PNs against underlying derivatives and wind up their existing position in 18 months.

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