Market may open flat

Trading of CNX Nifty futures on the Singapore stock exchange indicates that the Nifty could fall 2 points at the opening bell. Asian stocks rose on Friday after US jobless claims unexpectedly fell and Japan's inflation accelerated to the fastest pace since 2008.

Wipro will be included in 50-unit CNX Nifty index today, 27 September 2013. The IT major replaces Reliance Infrastructure in Nifty.

Central banks risk sparking new crises by keeping their loose policy in place for too long, Reserve Bank of India's (RBI) head said on Thursday. Central bankers were heroes for restoring financial stability during the financial crisis, but it was not clear they could be called the same for restoring economic growth, Raghuram Rajan, the governor of RBI, said. There is a danger of bubbles forming around the globe, due to easy monetary policy implemented to steer the world back into a more robust growth path. We seem to be in a situation where we are doomed to inflate bubbles elsewhere, Rajan said, adding he was not sure how effective a tool low interest rates would be. We should wonder whether lower and lower interest rates are in fact part of the problem, I say I don't know, he added. Rajan, a University of Chicago professor before becoming the governor of the Reserve Bank of India, where he took office earlier this month, was attending an event to receive the Deutsche Bank Prize in financial economics on Thursday.

When they (central banks) say they are the only game in town, they become the only game in town, Rajan said, in a speech at the award ceremony. We need to think of the dangers of over stimulation. We need to think of the sustainability of growth created by stimulus measures, he continued. While admitting that he did not have the answer, Rajan pushed for more thinking on whether fiscal policy might work better than interest rates to get growth back to a sustainable path. It (interest rate tool) is very, very blunt targeted fiscal policy may be better, he said, but added that getting right fiscal policies in place could be difficult. Turning to cross-border capital flows, he said that especially emerging markets were often the losers as flows turned around very quickly. We need to solve this problem (of capital flows) and we need to take a more practical view of this, Rajan said, without going into details.

In absence of any major cues, key benchmark indices managed to register small gains on Thursday, 26 September 2013. The S&P BSE Sensex rose 37.61 points or 0.19% to settle at 19,893.85 on that day, its highest closing level since 24 September 2013.

Foreign institutional investors (FIIs) bought shares worth a net Rs 172.15 crore on Thursday, 26 September 2013, as per provisional data from the stock exchanges.

Asian stocks rose on Friday after US jobless claims unexpectedly fell and Japan's inflation accelerated to the fastest pace since 2008. Key benchmark indices in China, Hong Kong, Taiwan, Indonesia, Singapore and South Korea rose 0.13% to 0.7%. Japan's Nikkei Average fell 0.26%.

Japan's inflation accelerated to the fastest pace since 2008 in August on higher energy costs, underscoring pressure on Prime Minister Shinzo Abe to drive wage increases as he seeks to end 15 years of deflation. Consumer prices excluding fresh food increased 0.8% from a year earlier, the statistics bureau said today in Tokyo.

US stocks rose on Thursday, halting the longest slump this year for the Standard & Poor's 500 Index, as an unexpected drop in jobless claims overshadowed concern that a budget impasse could hurt economic growth.

A Labor Department report showed the number of Americans filing applications for unemployment benefits unexpectedly fell last week, indicating further progress in the labor market. First-time claims for unemployment benefits in the US dropped by 5,000 to 305,000 last week. The economy expanded at faster pace in the second quarter from the previous three months, with gross domestic product rising at a 2.5% annualized rate, the Commerce Department said. A separate report added to signs that rising mortgage rates may have slowed housing market momentum. Fewer Americans signed contracts in August to buy previously owned homes, figures from the National Association of Realtors showed.

Investors are also weighing whether lawmakers can avoid a looming government shutdown. House Speaker John Boehner, an Ohio Republican said he doesn't expect his chamber to pass a stopgap spending bill expected from the Senate. He also said he does not expect a government shutdown to happen. The Senate likely will not vote on its version of the bill until this weekend, leaving the House just one full workday to act before spending authority for the federal government expires on Oct. 1. The House and Senate are at odds over language that withdraws funding for the 2010 health-care law.

The Federal Open Market Committee (FOMC) holds a two-day policy meeting on 29-30 October 2013. On 18 September 2013, the Fed surprised economists and investors with its decision to delay scaling back its stimulus amid concerns about the strength of the economic recovery.

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