Developments at Wall street will dictate market direction

Mumbai, Aug 12 (UNI) Further developments in the US subprime mortgage woes would be the single most important factor that would dictate the direction of not only local indices here, but also that of other global and Asian bourses, experts here said.

The 30-share Bombay Stock Exchange (BSE) Sensex last week lost 270.15 points or 1.78 points to settle at 14,868.25, while the National Stock Exchange (NSE) S&P CNX Nifty lost 68.20 points or 1.5 per cent to settle weaker at 4, 333.35 last week.

''Indian market is likely to track closely the movements on Wall Street as it did last week. The Nifty August 2007 futures continues to trade at discount as compared to spot closing, indicating that the undertone remains cautious. On Friday it settled at 4,303, a discount of 30.35 points as compared to spot closing of 4,333.35,'' market analysts pointed out adding that Foreign Institutional Investors (FIIs), who are considered key drivers of the recent rally, have turned sellers as they sold net equity worth nearly Rs 1, 492.70 for this month, till August 9.

The BSE has revised free-float adjustment factor of four constituents of the BSE Sensex. It has raised the free-float adjustment factor of Maruti Udyog to 0.45 per cent from 0.4 per cent. It has cut free-float adjustment factor of Bajaj Auto to 0.65 per cent from 0.7 per cent and that of Hindalco to 0.7 per cent from 0.75 per cent. It has cut free float adjustment factor of Ambuja Cements to 0.65 per cent from 0.7 per cent. The revised free float factors would come into effect from tomorrow.

''Free float adjustment factor is used for calculating a scrip's weightage in Sensex. The free float of a listed security is the proportion of shares available for purchase in the market by investors. In principle, it is the part of shares not held by strategic shareholders or promoters,'' experts explained.

''Crude oil prices have been hovering around the USD 70 a barrel amid concerns over the US economy. Any sharp rise in oil price may dampen the sentiment further,'' market participants cautioned.

Besides, Sobha Developers, Helios and Matheson Information Technology, Seamec, Sadbhav Engineering and Rain Calcining will declare their June 2007 quarter results in the coming week.

UNI