Monday, the Indian market is likely to open lower on the back of weak global cues. Currently, markets across the Asia-Pacific region are trading lower following negative cues from the U.S. markets on Friday. On Friday, the Dow Jones Industrial Average lost 1.9%, the Nasdaq Composite shed 2.6% and the S&P 500 index moved down 2% as investors resorted to profit taking.
Back home, while some marketmen expect the rally to continue this week, profit-booking following a spectacular rally over the past two weeks could be the order of the day. Considering that the market has risen around 23 percent from its earlier lows in March, many analysts warn of a sharp fall in the benchmark indexes.
With the market lacking any kind of positive catalysts on the domestic front, traders look forward to positive news flow from overseas shores. Investors would also have to gear up for a weak quarterly earnings season in April.
The market may show volatility on alternate bouts of buying and selling. As domestic mutual funds are reportedly in no hurry to cut cash levels ahead of the general election in April-May, the extent of FII buying may influence market movement. Global cues, especially from the European markets may also influence investor sentiment.
In Asian trading, crude oil is currently trading at $51.37 a barrel, down nearly 2% as a bleak near-term energy demand outlook prompted investors to take profit after a recent rally. Light sweet crude for May delivery closed at $52.34 per barrel on the New York Mercantile Exchange on Friday, down $1.96 a barrel.
Last week, the Indian market closed with strong gains on the back of firm global cues as a spate of encouraging economic data from the U.S. kept the global market mood upbeat. A steep fall in the inflation rate, raising hopes of a further easing of the monetary policy, and heavy purchases by foreign funds all through the week, also boosted sentiment. The BSE Sensex closed at 10,048, up 1,082 points or 12.06% for the week, while the S&P CNX Nifty rose 302 points or 10.74% to 3,109.In the year 2009 thus far, the Indian market has delivered a return of 4.2 percent.
Reliance Industries could be focus as it is set to begin gas production from the Krishna Godavari basin in the next 1-2 days.
Jet Airways may see some activity on reports that it has already leased out nine aircrafts since December and is planning to lease out more aircrafts in the coming months to cut more capacity.
Fertilizer companies such as Nagarjuna, Tata Chemicals, Chambal, Indo Gulf and Gujarat Narmada Valley could move after they have signed gas supply and purchase agreements with Reliance Industries.
State Bank of India may be in focus after the bank hinted at further interest rate cuts in the next few months on the back of lower-than-expected credit growth.
Financial Technologies could see some activity on reports that the London Stock Exchange is in talks with the company to buy a stake in its stock exchange arm MCX-SX.
DLF could be in focus following reports that it has agreed to refund the advance payments to those buyers who have submitted their exit letters from its luxurious Garden City residential project in Chennai.
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