Monday, the Indian market is likely to open flat amid mixed global cues. Profit taking may weigh on sentiment and the mood is likely to remain cautious ahead of earnings announcement from top blue-chip companies this week. Political uncertainty on the outcome of month-long parliamentary elections may also lead to volatility. Traders also await the RBI's monetary policy review on Tuesday.
A section of analysts believe that it is time for consolidation and the gains may not be sustainable. However, news flow from overseas markets and buying from foreign funds may have a greater impact on market movement. On a net basis, FIIs have invested over Rs. 6,000 crore in the past five weeks, according to provisional data released by the Bombay Stock Exchange.
Currently, markets across the Asia-Pacific region are trading mixed. China's Shanghai Composite index and Hong Kong's Hang Seng index are up around 1.34% each, while Japan's Nikkei 225 index is down 0.96% and South Korea's KOSPI is losing 0.48%.
On Friday, stocks on Wall Street finished modestly higher after a relatively lackluster session. The major averages ended the day just above the unchanged line but still managed close higher for the sixth consecutive week.
While General Electric and Citigroup reported fairly encouraging quarterly earnings, the mood on Wall Street may remain cautious as earnings season will continue in full force this week, with Bank of America due to release its quarterly results on Monday. On the economic front, the Reuters/University of Michigan's consumer sentiment index for April rose to 61.9, a substantial increase from the previous reading. Analysts had expected the index to rise to 58.5 from 57.3 in March.
In Asian trading, crude oil is trading weak at $49.40 a barrel, down nearly 2% due to sluggish energy demand in the world's biggest economy after the US energy stockpiles showed a large build-up in inventories last week.
Last week, the Indian market extended its uptrend for the sixth week in a row led by firm global cues and consistent inflows from foreign funds. The BSE Sensex gained 219 points or 2.03% to 11,023 and the S&P CNX Nifty closed at 3,384, up 42 points or 1.26% for the week. Second-line stocks outperformed the benchmarks, with the BSE mid-cap index gaining 3.40% and the small-cap index adding 4.88%. The benchmark Sensex has climbed 35.08% thus far in 2009 since its low of 8,160 on March 9. The stock market was closed on Tuesday, 14 April, for Dr. Ambedkar Jayanti.
Stocks to Watch
Sugar stocks may see some profit taking after the government released additional non-levy sugar for April-June quarter to curb prices during election months of April and May.
ICICI Bank could see some activity on reports that the group is in for a major top-management restructuring, with two business heads Renuka Ramnath and Shikha Sharma likely to resign to their jobs.
MTNL may move on reports that it will launch its 3G services in Mumbai next month.
Shriram Transport Finance may see some activity following reports that the company is planning to issue non-convertible debentures for raising nearly Rs.700 crore.
Axis Bank, Escorts, Polaris, Sesa Goa and TCS could be in focus ahead of announcement of their earnings reports for the March quarter on Monday.
Stocks of fertilizer companies and others related to rural economy such as tractor manufacturers and consumer goods stocks may be in focus on reports that monsoon will be near normal this year. In the June-September 2009 season, monsoon will be 96% of the long-term average, according to the Indian Meteorological Department.
IT stocks could be in focus after Infosys CEO Kris Gopalakrishnan said the industry would recover by late 2009 or early next year.
Power Grid Corporation of India may move on reports that it will invest up to Rs.20, 000 crore during the XIth Five-Year Plan period to provide transmission system to four ultra mega power projects of 4,000 MW each.
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