RTTNews - Wednesday, the Indian market is likely to open higher on the back of strong global cues after better-than-expected consumer data in the U.S. raised hopes on an economic rebound. The major U.S. averages snapped a four-day losing streak and came back strongly after a long weekend overnight and markets across the Asia-Pacific region are trading firm this morning.
Back home, reports about a further 100-150 basis points cut in lending rates by state-run banks within the next fortnight and hopes on disinvestments in the power sector are likely to keep sentiment upbeat.
Foreign institutional investors have made a net investment of Rs.17, 288 crore thus far in May. On Tuesday, FIIs sold shares worth Rs.200 crore, while domestic financial institutions sold shares worth Rs.138 crore, provisional data released by the stock exchanges showed.
Overnight, the major averages on Wall Street finished near their best levels of the day, as investors shrugged off disappointing housing price data and focused on the encouraging consumer confidence data. The Conference Board's reading on consumer confidence for May improved by far more than expected, reaching its highest level since September. The data generated some optimism about the outlook for consumer spending, which accounts for nearly two-thirds of economic activity. The Dow Jones Industrial Averaged rose 2.37%, the Nasdaq Composite advanced 3.45% and the S&P 500 index closed up 2.63%.
The Indian ADRs also closed mostly higher. HDFC Bank rallied 3.98%, Sterlite gained 3.2%, Infosys rose 2.56%, Reddy's Laboratories added 2.23%, MTNL moved up 2.08% and Wipro ended up 1.92%, but ICICI Bank fell 1.02% and Satyam closed down 0.93%.
Crude oil futures hit a fresh six-month high on Tuesday, bolstered by better-than-expected U.S. consumer confidence data and comments from OPEC kingpin Saudi Arabia that oil prices would hit $75 a barrel between the third and fourth quarters of this year. OPEC ministers meeting in Vienna are expected to leave output levels unchanged on expectations prices will continue to rise despite swollen stockpiles and slumping demand. After closing at $62.45 a barrel, up 78 cents in New York trading on Tuesday, crude oil is now trading at $62.39 a barrel, down 0.10% in Asian trading.
The rupee saw its sharpest fall since March 2 on Tuesday, weighed down by heavy demand for dollar from oil refiners and the dollar's surge against major world currencies. After moving in a wide range of Rs.47.40-47.93, the rupee closed at Rs.47.88/90 against the dollar, down 64 paise or 1.25% from its previous close.
The Indian market tumbled on Tuesday, as traders lacked positive catalysts to buy stocks after a sharp 15% rise last week. Weak cues from the Asian and the European markets, a lack of direction from Wall Street and caution ahead of the release of fourth quarter GDP numbers on Friday led to heavy profit taking. The BSE Sensex finished at 13,589, down 324 points or 2.33% from its previous close and the S&P CNX Nifty fell 121 points or 2.85% to 4,117. The broader market indexes, represented by smallcaps and midcaps, also gave up their early gains and ended sharply lower for the day after outperforming the frontline indexes in the preceding sessions.
Stocks to Watch
LIC Housing Finance proposed to issue further equity shares on a preferential basis or through the qualified institutional placement route.
For the quarter ended March, IT solutions provider NIIT Technologies reported a 58.41% decline in its net profit to Rs.22.69 crore from Rs.54.56 crore in the same quarter last year. NIIT said that it signed deals worth $46 million in the quarter ended March.
Aluminum producer NALCO lowered prices of its products by up to Rs.5, 000 a tonne or 5% to match a drop in global rates.
Power trading solutions company PTC India said on Tuesday that it raised Rs.500 crore by placing 6.66 crore shares to institutional investors at Rs.75 per share, representing 22.67 per cent of the company's post-issue share capital.
Outsourcer Tata Consultancy Services has chosen N Chandrasekharan, chief operating officer and executive director as the new CEO. He will replace the 64-year-old S. Ramadorai who has been with TCS since 1971 and has been its managing director and CEO since 1996.
Anil Ambani group firm Reliance Communications said on Tuesday that its shareholders have approved the de-merger of its optic fibre division to its infrastructure division Reliance Infratel.
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