Asian Economic News
Indian Market May Drift Lower
11/4/2009 11:08 PM ET
(RTTNews) -
The Indian market may open lower on Thursday amid weak Asian cues. After a sharp uptrend yesterday on account of short covering, investors are likely to take profits on their gains.
Additionally, with the U.S. Federal Reserve policy statement not containing any big surprises, there are no immediate triggers to sustain the positive momentum. Analysts expect a further 10-15% downside from current levels in the short-term.
On the economic front, foreign direct investment flows into the country dipped by 54% to $1.16 billion in September from $2.5 billion in the year-ago month, Commerce and Industry Minister Anand Sharma said.
Currently, Asian stocks are trading mostly lower as investors stayed on the sidelines ahead of the release of key data on U.S. jobs. The Dow futures are now trading down by 41 points.
On Wall Street, stocks ended on a mixed note for a second straight session on Wednesday following the release of a pair of rather lukewarm economic reports. The Institute for Supply Management said that activity in the service sector grew for the second consecutive month in October, but the pace of growth unexpectedly slowed compared to the previous month.
Separately, a report on private sector employment showed that the pace of job losses continued to decrease in October, while non-farm private employment fell by 203,000, higher than a loss of 198,000 jobs that economists had expected.
Meanwhile, the Fed left its target rate unchanged in a range from zero to a quarter percent and reiterated its assessment that "exceptionally" low rates will continue for an "extended period." The major averages saw notable downside in late day trading, pushing the tech-heavy Nasdaq into negative territory. However, the Dow ended up 0.3% and the S&P 500 rose 0.1%.
Crude oil price settled higher at $80.40 a barrel, up 80 cents on Wednesday after the U.S Energy Information Administration reported a drop in weekly inventories. The dollar's weakness against the euro also bolstered the appeal of commodities as a hedge against inflation. In Asian trading on Thursday, crude oil is now trading weak at $79.84 a barrel.
The rupee rose by 35 paise to 47.05/06 against the U.S dollar on Wednesday, buoyed by rising stocks and a week dollar.
In corporate news, the Reliance gas dispute case in the Supreme Court took another dramatic turn on Wednesday with Justice R.V. Raveendran, one of the three judges on the Bench, withdrawing from the hearing, on the ground that his daughter was employed in a firm advising the Mukesh Ambani group on other projects. A new Bench will hear the case afresh from Thursday.
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