BSE Sensex falls 140 points, Nifty sheds 37 pts in early trade on profit-booking

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Investors are cautious ahead of the Union Budget scheduled for this month-end. (Reuters) Investors are cautious ahead of the Union Budget scheduled for this month-end. (Reuters)
SummaryInvestors are cautious ahead of the Union Budget scheduled for this month-end.

by talk in global markets overnight that a hedge fund had been liquidating large positions in commodities, as well as worries the Federal Reserve could slow its bond buying programme.

* The US dollar held firm on Thursday, having enjoyed its biggest one-day gain in seven months against a currency basket as commodities and US equities slid on rumours of a hedge fund in trouble.

* Crude oil posted its biggest daily fall so far in 2013 on Wednesday, joining a sell-off in precious metals and copper as market rumours circulated that a hedge fund was forced to liquidate substantial commodity positions.

* U.S. Treasury debt prices rose on Wednesday, even after records of the Federal Reserve's January meeting showed policymakers discussed the slowing or stopping of Fed bond purchases that are aimed at reducing unemployment.

FACTORS TO WATCH

* The budget session of parliament begins with the President's speech at 1100 IST (0530 GMT), which coincides with the second day of a nationwide strike by trade unions angry with the government's inaction on price rise and alleged violation of labour laws.

* Sri Lanka central bank governor Ajith Nivard Cabraal, Colombo Stock Exchange Chairman Krishan Balendra, and Securities and Exchange Commission of Sri Lanka Chairman Nalaka Godahewa to be in Mumbai for an "Invest Sri Lanka" forum. They will give a media briefing at 12 pm (0630 GMT).

OVERNIGHT NEWS

* India's auction of quotas allowing foreign investors to buy bonds attracted solid demand, reflecting expectations that the central bank will cut interest rates and that the government will deliver a fiscally disciplined budget.

* Indian banks' advances continued to limp at the end of 10 months of the financial year 2012-13 compared with a year earlier, but bankers expect a late demand from corporates and loans to the farm sector to prop up growth before the year-end on March 31.

MAJOR DEALS/ACQUISITIONS

* Malaysia's AirAsia Bhd, Asia's largest budget carrier, plans to launch a regional airline in India in a venture with the Tata group, marking a return to aviation for India's biggest business house.

* The RBI said on Wednesday it accepted all 34 bids for 1.22 trillion rupees

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