Thursday, the Indian market is likely to open higher on the back of strong global cues after stocks on Wall Street gained for the second consecutive day overnight on unexpected positive economic data, fueling expectations that the worst for the global economy might have been over.

However, the market may show volatility as analysts expect some profit taking ahead of the three-day weekend after two consecutive sessions of rise. The market will remain closed on Friday because of a festival holiday.

Currently, markets across the Asia-Pacific region are trading sharply higher after economic reports in the U.S. improved investor sentiment. Australia's All Ordinaries index is rising 2.70%, China's Shanghai Composite index is up 1.12%, Hong Kong's Hang Seng index is jumping 4.11%, Japan's Nikkei 225 index is adding 3.01% and South Korea's KOSPI is moving up 3.03%.

After seeing some initial weakness, stocks on Wall Street showed a substantial turnaround over the course of the trading day on Wednesday, ending the day sharply higher. Investors shrugged off a dismal non-farm private employment report and instead turned their focus to better-than-expected reports on pending home sales, construction spending, and manufacturing activity. The Dow Jones Industrial Average rose 2.01%, the Nasdaq Composite gained 1.51% and the S&P 500 index moved up 1.66%.

However, the Indian ADRs closed mixed. While MTNL and Reddy's Laboratories ended in the red, the others closed firm. Among the major gainers, Satyam Computers jumped 8.28%, ICICI Bank soared 8.05%, Wipro advanced 2.53% and HDFC Bank added 2.38%.

Crude oil fell more than $1 a barrel on Wednesday after an US Energy Information Administration data revealed a build in crude oil stockpiles from last week. U.S. commercial crude oil inventories increased for a 23rd time in 27 weeks by 2.84 million barrels to 359.4 million barrels in the week ended March 27, 2009. In Asian trading, the commodity is trading at $49 a barrel, up 1.26%.

After being in the red for a major part of the day, the Indian market finished Wednesday's session sharply higher on strong buying by domestic financial institutional investors after a better-than-expected domestic manufacturing data sparked hopes that the worst may be over for the Indian economy. After hitting a low of 44.4 in December, the ABN AMRO Bank's purchasing managers' index (PMI), a key barometer based on a survey of 500 companies, rose to 49.50 in March from 47.0 in February.

The BSE Sensex, which opened at 9,746, rose 193 points or 1.99% to close at 9,902. Similarly, the S&P CNX Nifty of the National Stock Exchange gained 1.47% per cent from its last close to close at 3,065. The BSE mid-cap index gained 1.88% and the small-cap index added 2.87%.

Stocks to Watch

Auto stocks such as Maruti Suzuki, Hero Honda and TVS Motor may rise after they have reported better-than-expected sales of cars and motorcycles for March, marking a positive performance for the third month in a row.

Wockhardt could be in focus on reports that it is evaluating the possible sale of its headquarters, Wockhardt Towers, to service a part of Rs.3, 700 crore debt it has taken from various financial institutions and banks.

Bajaj Hindusthan may see some activity after the company's board approved a proposal to issue 14.5 million convertible warrants to promoters.

Cement stocks, namely ACC, Grasim, UltraTech and Ambuja Cements may see some buying interest following reports that they raised prices of cement by Rs.3-7 per 50-kg bag across the country from Wednesday.

Piramal Healthcare may come under selling pressure amid reports that it is planning to shut one of its drug units in the UK to help control costs.

BGR Energy Systems may be in focus after it has entered into a 20-year licence agreement with an US- based firm for manufacturing and marketing of steam boilers in the Indian market.

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