RTTNews - The Indian market may open unchanged with a positive bias on Thursday amid mixed global cues. While the major U.S. averages ended modestly lower overnight on worries that rising interest rates could dampen consumer and business spending, the major markets across Asia-Pacific region are trading mostly higher this morning.
Trading is likely to remain volatile on alternate bouts of buying and selling. Concerns about rich valuations and fears that the upcoming budget may disappoint market men remain, but investors are hesitating to take profits in a big way due to consistent buying from foreign funds.
Foreign institutional investors (FIIs) bought stocks worth Rs.738.09 crore on a net basis on Wednesday and domestic institutional investors bought stocks worth Rs.589.88 crore, provisional data released by the Bombay Stock Exchange showed. Foreign funds made net investments of Rs.990.70 crore on Tuesday, market regulator SEBI data revealed. On a net basis, FIIs bought shares worth nearly $614 million in the current month till June 8 and invested $5 billion thus far in the calendar year.
On Wall Street, the Dow Jones Industrial Average closed down 0.27% overnight, weighed down by fears of inflation and the slow pace of economic recovery. The Nasdaq Composite moved down 0.38% and the S&P 500 index eased 0.35%. In economic news, a report from the Commerce Department showed that the U.S. trade deficit for the month of April came in modestly wider than in March, as the value of exports fell by more than the value of imports.
The Indian ADRs closed mixed. Satyam jumped 35.71%, HDFC Bank rallied 4.63%, Reddy's Laboratories advanced 3.44%, Sterlite rose 1.45% and ICICI Bank gained 0.22%, but Infosys edged down 0.67%, MTNL declined 0.43% and Wipro fell 1.41%
Crude oil futures finished above $71 a barrel on Wednesday, its highest level in almost eight months after data from the U.S. Energy Information Administration showed a decline in crude oil and gasoline inventories last week. Prices have gained almost 5% since last Friday's settlement, and more than doubled since last winter's low $30 per barrel. In Asian trading, crude oil is now trading at$71.93 a barrel, up 0.84%.
The rupee ended stronger at Rs.47.24/25 against the dollar on Wednesday, helped by dollar weakness in overseas markets and strong FII buying in Indian equities.
The Indian market continued its surge on Wednesday, boosted by expectations of a market friendly budget after Prime Minister Manmohan Singh spoke about 8-9 percent growth and promised more spending on infrastructure and public services. The finance minister Pranab Mukherjee also said the impact of stimulus steps might turn around the economy in the near-term and the government would provide a conducive atmosphere for growth by focusing on public spending.
The benchmark for the Indian market, the BSE Sensex surged to an almost 12-month high of 15,581 before paring some of its gains to finish at 15,467, up 340 points or 2.25% from its previous close. Likewise, the S&P CNX Nifty rose 104 points or 2.29% to 4,655. The broader market underperformed the large-caps, as profit taking continued in small-caps and mid-caps.
Satyam Computers could be in focus ahead of a board meet on Thursday to firm up a cost-cutting plan that could cover retrenchment of non-billable employees.
Telecom stocks may be in focus on reports that a Cabinet note detailing all issues associated with the 3G auctions is ready and a decision on conducting auctions will be taken by the Union Cabinet within two weeks.
Public sector banks could move after chiefs of various state-run banks assured the finance minister that they would take a decision on interest rate cuts in the coming weeks.
Tata Tea may see some activity after it reported a 55% drop in its consolidated net profit for the FY09.
Larsen & Toubro could be in the spotlight as it reportedly plans to exit the cement business by selling its 11.5% stake in UltraTech Cement to institutional investors.
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