The market oscillated in a narrow range in early afternoon trade after the latest data showed Wholesale Price Index (WPI)-based annual rate of inflation rose to 8.24% for the week ended 24 May 2008 over 8.10% in the previous week. The rate of inflation in the same period during the corresponding week in the previous year stood at 5.15%.

Fresh selling after a firm start had pulled the market in the red in mid-morning trade. Global cues were positive. The market breadth was positive. The government also revised the annual inflation rate for the week ended 29 March 2008 to 7.75% as compared to 7.41% reported earlier.

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 12:28 IST, the 30-share BSE Sensex was down 16.76 points or 0.11% at 15,752.39. Sensex lost 68.42 points at days low of 15,701.31 touched in mid-morning trade. Sensex 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.

The broader based S&P; CNX Nifty was down 0.75 points or 0.01% at 4,676.05

The market breadth was positive on BSE with 1282 shares advancing as compared to 1124 that declined. 79 remained unchanged.

The BSE Mid-Cap index rose 0.09% to 6,406.26 and the BSE Small-Cap index gained 0.28% to 7,757.27. Both these indices outperformed the Sensex.

Sectoral indices on BSE displayed mixed trend. The BSE Auto (up 0.14% at 4,227.73), BSE Health Care index (up 0.10% at 4,350.09), BSE Realty index (up 1.32% at 6,409.30), and BSE Consumer Durables index (up 0.38% to 4,047.03), BSE Power (up 0.70% to 2,727.51), BSE Bankex (up 0.12% at 7,357.56), BSE Capital Goods (up 0.42% at 12,162.63), BSE TecK index (up 0.17% to 3,531.57), gained.

The BSE Oil & Gas index (down 0.22% to 10,039.90), BSE Metal (down 0.07% to 15,703.48), BSE FMCG index (down 0.83% to 2,406.03), BSE PSU index (down 0.58% to 6,680.38), declined.

The total turnover on BSE amounted to Rs 2351 crore by 12:30 IST as compared to Rs 1537 crore by 11:30 IST.

Among the 30-member Sensex pack, 18 declined while the rest gained.

Mahindra & Mahindra, the countrys largest tractor company in terms of sales, advanced 4.31% to Rs 587 on 31,866 shares. It was the top gainer from Sensex pack.

Most IT pivotals gained. Satyam Computer Services (up 0.06% to Rs 512.50), TCS (up 0.38% to Rs 986.50), and Infosys Technologies (up 0.63% to Rs 1991.45), edged higher.

However Indias third largest software services exporter Wipro lost 1.79% to Rs 518.10 on 1.56 lakh 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) recovered from days low of Rs 2212 and was now up 0.15% to Rs 2251.05 on 9.07 lakh shares. The stock had surged to an intra-day high of Rs 2299 in opening trade.

Interest rate sensitive banking shares were mixed post inflation data. ICICI Bank (up 0.61% to Rs 786) 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 0.65% to Rs 1345.20. 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.

Hindalco Industries (down 1.59% to Rs 179.20), Tata Steel (down 1.20% to Rs 830.90), and Hindustan Unilever (down 1.62% to Rs 234), edged lower from the Sensex pack.

Reliance Industries was the top traded counter on BSE with turnover of Rs 205.80 crore followed by Anus Labs (Rs 104.30 crore), Gokul Refoils (Rs 90.19 crore), Cairn India (Rs 85.10 crore), and Reliance Capital (Rs 80.22 crore), in that order.

HOV Services jumped 20% at Rs 100.40 after it received an offer of approximately $202 million to purchase 100% of its wholly owned subsidiary HOV Services, LLC and its Hong Kong unit The offer is from a company controlled by some of company's promoters and shareholders.

Sanguine Media surged 4.24% to Rs 25.80 on fixing 23 June 2008 as the record date for rights issue of equity shares in the ratio of 1:1, at a price of Rs 23 each.

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 1.03% at 14,489.44), Hang Seng (up 0.79% at 24,445.89), Taiwan's Taiwan Weighted (up 0.08% at 8,745.35), Singapore's Straits Times (up 0.26% at 3,151.94), advanced. However, China's Shanghai Composite declined 0.56% at 3,332.77.

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 yesterday, 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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