Indian Market Likely To Extend Rally On Liquidity Flows

By @ibtimes on

RTTNews - Monday, the Indian market may open flat with a positive bias amid mixed global cues, with investors turning cautious and going for some profit taking.

However, higher funds flow from foreign institutional investors and a return of risk appetite on the back of better-than-expected June quarter earnings suggest that the rally would continue for some more time. Stocks with better earnings visibility and the sectors which have underperformed over the past two weeks are likely to be in focus.

Foreign portfolio investors bought shares worth Rs 11,066.30 crore ($2.28 billion) in July alone. The total FII investment thus far in 2009 has crossed $ 7 billion. On the negative side, delayed monsoon and drought situations in the northern part of the country could weigh on investor sentiment, leading to some volatility and intermittent profit taking.

On Friday, Wall Street ended on a mixed note. While the Dow Jones Industrial Average ended up 0.19%, the tech-heavy Nasdaq edged down 0.29% and the S&P 500 index rose 0.07%. The GDP report from the commerce department revealed that the U.S. economy continued to shrink by a slower than expected margin, but trader sentiment was hit to an extent as consumer consumption came in far lower than expected.

The Indian ADRs also closed mixed. Infosys advanced nearly 2%, HDFC Bank rose 1.68% and ICICI Bank and Wipro gained around 0.9% each, but MTNL tumbled 3.66%, Reddy's Laboratories slipped 0.59% and Satyam Computers fell 2.33%.

Crude oil jumped nearly 4% to close at a four-week high of $69.45 a barrel on Friday after a better-than-expected U.S. gross domestic product report boosted the outlook for energy demand. Because of encouraging developments in the oil market, crude oil prices will reach $80 per barrel by the end of this year, the oil ministry website, SHANA, reported on Sunday quoting Iran's OPEC governor. In Asian trading on Monday, light sweet crude for September delivery steadied at near $70 a barrel.

In corporate news, Bharti Airtel is expected to make an update soon on its alliance with South Africa's MTN after a deadline on exclusive talks for a $23 billion merger between the two companies expired on July 31.

Reliance Communication reported an 8.3% year-over-year rise in its June-quarter net profit, surprising analysts who had predicted a decline.

TVS Motor's net profit for the three months ended June soared 157% to Rs.18.11 crore from Rs.7.02 crore in the year-ago period.

Financial Technologies, the joint promoter of the Multi Commodity Stock Exchange (MX-SX) is likely to divest a 52% stake by September-end to comply with regulatory requirements, reports suggest.

The early results of the ultra-deep oil explorations in the Kerala-Konkan basin by ONGC will be available in 100 days, the company chairman and managing director R.S. Sharma told reporters on Sunday.

On a consolidated basis, Suzlon Energy reported a net loss of Rs.462 crore for the first quarter ended June, compared to a Rs.52-crore in the year-ago period.

Jaiprakash Associates, the flagship company of the diversified industrial conglomerate Jaypee Group, signed an agreement with state-owned Assam Mineral Development Corporation for setting up a 2- million tonnes per annum capacity cement plant.

Tata Motors will deliver up to 60,000 units of the Nano by July next year until the main facility in Gujarat goes on stream, chairman Ratan Tata said in the company's annual report for 2008-09.

Last week, the benchmark indexes, the Sensex and the Nifty closed at new 52-week highs on the back of fresh buying by foreign funds and better- than-expected corporate results, even as worries over the monsoon and concerns surrounding China restricted big gains. The Reserve Bank of India (RBI) kept its policy interest rates unchanged during its review meeting last week, but signaled that interest rates could move up in the medium term. While the BSE Sensex moved up 291 points or 2% to end at 15,670 last week, the S&P CNX Nifty rose 68 points or 1.5% to 4,636.

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