Wednesday, the Indian market may extend gains on the first day of the new financial year, in line with the firm trend in the other Asian markets this morning. Overseas markets, especially the U.S., is expected to continue to dictate the trends till the March quarter results start trickling in from the second week of April. However, the element of uncertainty on the political front, weak corporate outlook and heavy selling by foreign funds after huge purchases in the past few days may limit the gains. Currently, the major markets across the Asia-Pacific region are trading higher.
Overnight, U.S. stocks closed higher on the last day of the quarter, led by technology stocks and bank shares, as traders used the weakness in the two previous sessions as a buying opportunity. The gains were also helped by window dressing, or buying stocks that make quarter-end statements look good late in a quarter. Investors mostly shrugged off separate economic reports that showed weakness in home prices, consumer confidence and in a purchasing managers index.
The Indian ADRs closed mostly higher on Tuesday. ICICI Bank rose 4.81%, HDFC Bank soared 9.13%, Infosys advanced 2.94%, Satyam Computers gained 1.29% and Tata Motors climbed 8.35%. However, Wipro eased 0.14% and MTNL ended down 0.36%.
Crude oil closed higher on Tuesday amid choppy trading, tracking the gains on Wall Street. Light sweet crude for May delivery ended at $49.66 on the New York Mercantile Exchange, up $1.25 for the session.
The rupee closed Tuesday's session stronger at Rs. 50.73 against the dollar from its previous close of Rs. 51.17, helped by the weakening of the dollar against global currencies and the upswing in stocks. The currency market will remain closed on Wednesday as banks close their accounts for the financial year that ended on Tuesday.
The Indian market closed higher in a choppy session on Tuesday, posting its first quarterly rise since the December quarter of 2007, helped by fund buying on the last day of the financial year. Signs of recovery in the other Asian markets, the strong opening of the European markets and higher US index futures improved investor sentiment. The BSE Sensex closed at 9,708, up 140 points or 1.47% over the previous close. Likewise, the S&P CNX Nifty rose 43 points or 1.44% to settle at 3,021.
Domestic institutions, including mutual funds and insurance companies net bought shares worth Rs 1,039.07 crore on Tuesday while foreign institutional investors sold Indian shares worth Rs 583.65 crore, according to the provisional figures on NSE.
Fortis Healthcare could be in focus as it has emerged as the front-runner to acquire a substantial stake in the unlisted Wockhardt Hospitals. Fortis' promoters have reached a broad agreement with Wockhardt's founder Habil Khorakiwala on a possible deal to acquire up to 74% in the hospital chain for close to Rs 750 crore, valuing the business at over Rs 1,000 crore
The government plans to extend higher depreciation benefit of 50% on commercial vehicles by three months till June 2009. This is expected to help commercial vehicle makers such as Ashok Leyland, Tata Motors and Eicher Motors.
Six suitors, including billionaire investor Wilbur Ross, have inked non-disclosure pacts with Satyam Computer Services, a pre-requisite to do due diligence on the assets and liabilities of the beleaguered IT firm.
Realty major DLF may be in focus on news that the company plans to exit from wind energy business.
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