The market may remain subdued in the run up to the Union Budget 2007-08 to be read in Parliament next Wednesday (28 February 2007). The budget session of the Parliament begins today.

Cautioun on the bourses is evident in that the market-breadth has turned weak, whenever the key indices have corrected, over the past few days. Concerns that the government may raise short-term capital gains tax on sale of shares from the current 10% have gained currency. The securities transaction tax (STT) may also go up further. The STT was raised in the previous budget. The removal of 10% corporate surcharge may be offset by removal of certain open-ended exemptions.

Market men expect the finance ministry to give a big impetus to agriculture and infrastructure in the budget.

FIIs turned net sellers on Wednesday (21 February 2007). FIIs were net sellers to the tune of Rs 40.20 crore on Wednesday. Their inflow has been strong this month. Their cumulative inflow in February 2007 has reached Rs 4175 crore. The strong inflow has been triggered by an upgrade in India's sovereign rating to investment grade by global rating agency, Standard & Poor's, on 30 January 2007.

As per provisional data, FIIs were net sellers to the tune of Rs 435 crore on Thursday (22 February 2007), the day when the Sensex lost 167 points. FIIs were net sellers to the tune of Rs 348 crore in index-based futures on the same day. They were net sellers to the tune of Rs 104 crore in individual stock futures. Nifty March futures settled at 4066.65 on Thursday, a premium of 26.65 points over the spot Nifty closing of 4040.

Revised market lots in NSEs derivatives segment become applicable today. The lot size of the Nifty contract has been cut to 50 from 100. This may boost volumes in the derivatives segment.

Asian markets edged lower on profit-taking on Friday (23 February 2007) . Key benchmark indices in Hong Kong, Singapore and South Korea were down between 0.01 - 0.7%. Japans Nikkei was up 0.1%.

US blue-chip stocks declined on Thursday, as a jump in oil prices added to worries about inflation, but a rally in chipmakers' stocks helped the Nasdaq advance late in the session to end at a six-year high.

The Dow Jones industrial average fell 52.39 points, or 0.41%, to end at 12,686.02, with only eight of the 30 stocks in the Dow finishing higher. The Standard & Poor's 500 Index dipped 1.25 points, or 0.09%, to finish at 1,456.38. The Nasdaq Composite Index rose 6.52 points, or 0.26%, to 2,524.94, its highest close since 15 February 2001. Earlier, the Nasdaq hit a six-year intraday high at 2,531.42.

US crude shed 9 cents to 60.86 a barrel after jumping 88 cents overnight to its highest level since 2 January 2007 after US data showed a surprisingly big fall in distillate stocks, compounded by a rash of refinery problems in the world's top consumer. Worries over another escalation in the dispute over Iran's nuclear programme added to concerns over global supply.

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