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Wall Street closed in the red overnight and the Asian markets were lower in early trade today, on concerns about the pace of economic recovery due to spiralling crude prices
The Indian share market is likely to see a tepid opening on unsupportive global cues. Markets in the US closed marginally lower on Wednesday concerns that the ongoing tensions in West Asia will hamper the economic recovery. Stocks of heavy industries, commodity-related industries and technology companies ended lower. Markets in Asia were in the red on global concerns and news that the Japanese economy fell at an annualised rate of 1.3% in the December quarter. The SGX Nifty was 22 points lower at 5,510 compared to its previous close of 5,532.
Back home, food inflation for the week ended 26th February will be released around noon today, giving some direction to the market later in the day. Food inflation for the week ended 19th February eased by a percentage point to 10.39%, mainly on a decline in vegetable and cereal prices.
The domestic market opened in positive terrain on Wednesday supported by strong Asian markets and on weaker oil prices. But choppy trade followed with the indices moving into the red in mid-morning trade. Feeble recovery attempts were thwarted by selling pressure, with the indices consolidating the gains of the last few trading sessions and ending almost flat.
The Sensex opened with a gap up of 83 points at 18,523 and the Nifty opened 22 points up at 5,542, on weaker oil prices. They hit intra-day highs early in the trading session, but soon witnessed a falling trend. The intra-day highs of the Sensex and Nifty were 18,583 and 5,563. By noon the indices hit their intra-day lows of 18,304 and 5,477, respectively. The market rose later in the day. By the end of the session the Sensex was up 30 points at 18,470, while the Nifty was 10 points up at 5,531.
Markets in the US closed marginally lower overnight as concerns that ongoing tensions in West Asia will impact economic growth weighed on investors’ sentiments. Crude remains the focal point as any spike in prices would have a cascading effect on the economy, analysts opined. Stocks of heavy industries, commodity-related industries and technology companies ended lower.
In economic news, wholesale inventories rose a more-than-expected 1.1% to a seasonally adjusted $436.88 billion in January, its highest level since November 2008.
The Dow shed 1.29 points (0.01%) to close at 12,213.09. The S&P 500 fell 1.80 points (0.14%) to end at 1,320.02 and the Nasdaq declined 14.05 points (0.51%) to close at 2,751.72.
Rising crude prices and a weak outlook of the Japanese economy in the December 2010 quarter led Asian markets lower in early trade on Thursday. Libyan forces carried out attacks on oil facilities in the country threatening supplies, which may hurt prices.
In economic news, Japan’s gross domestic product fell at an annualized 1.3% rate in the December quarter, more than the 1.1% contraction reported last month. The December quarter decline was more than analysts’ forecasts. Besides, the Bank of Korea raised the benchmark seven-day repurchase rate to 3% from 2.75%, for the second time this year after inflation exceeded its target ceiling for two consecutive months.
The Shanghai Composite declined 0.90%, the Hang Seng fell 0.33%, the Jakarta Composite was down 0.52%, the KLSE Composite fell 0.49%, the Nikkei 225 tanked 1.09%, the Straits Times shaved off 0.54%, the Seoul Composite declined 0.97% and the Taiwan Weighted was 0.93% lower in early trade.
Back home, finance minister Pranab Mukherjee yesterday gave an assurance that he will look into the demand of various industrial associations seeking withdrawal of the excise duty on bicycles, hosiery, blankets, garments, sewing machines and other industrial products.