RTTNews - Thursday, the Indian market may open modestly higher amid some intra-day recovery in Asian stocks this morning.
Net FII selling, caution ahead of the upcoming season and further profit taking before the release of May industrial output data on Friday may weigh on stocks. However, stock-specific buying after recent losses, reports about state-run NHPC hitting the market next month with its IPO and weak crude oil prices may offer some support.
Clearly, the market overreacted to the budget and as exaggerated fears pave way to rational thinking, the market may find some support in the near term.
Exports from the country contracted by a sharp 29% in June, dropping for the ninth month in a row, but the pace of export fall has hopefully begun to recede, commerce and industry minister Anand Sharma said in the Rajya Sabha on Wednesday.
Meanwhile, after swinging between gains and losses over the course of the trading session, the major U.S. averages ended little changed overnight, as traders were reluctant to make any significant moves ahead of the start of the earnings season. However, the IMF's revised forecast of the world economy expanding 2.5% in 2010 from 1.9% growth forecast earlier, helped pull the U.S. markets back from the lows of the day. The Dow Jones Industrial Average closed up 0.2% and the Nasdaq edged up 0.1%, while the S&P 500 closed 0.2% lower.
Crude oil futures plunged for a sixth straight session and reached its lowest level in seven weeks on Wednesday. Prices dropped on government data that revealed a larger-than-expected build in gasoline and distillate inventories last week. After settling at $60.14 a barrel, down $2.79 in New York trading on Wednesday, crude oil is now trading firm at $60.64, up 0.83% in Asian trading.
On the other hand, fears about the sustainability of portfolio inflows amid weakness in the stock markets across the Asia-Pacific region pulled the rupee down 0.9% to Rs.48.88/89 against the dollar on Wednesday. Firm U.S. dollar against regional currencies and increased demand for dollars from importers also weighed on the currency.
On Wednesday, continued pessimism over the Union Budget, weak global cues on worries over economic recovery and cautious undertone ahead of the upcoming earnings season dragged the Indian market sharply down, with the benchmarks Sensex and the Nifty losing around 3% each. The BSE small-cap and the mid-cap indexes tumbled around 3.7% each and the market breadth on the BSE was extremely negative, as decliners outnumbered gainers by 1980 to 563, with 59 stocks closing unchanged.
In corporate news, Mahindra & Mahindra plans to launch diesel-powered pick-up trucks in the United States to cash in on the opportunity created by the disinterest of global majors, reports suggest.
Substantial growth in other income and a healthy growth in interest income increased IndusInd Bank's net profit four and half times to Rs.86 crore for the June quarter from Rs.19 crore in the corresponding period last year. According to reports, the bank is expected to raise around $100 million through the qualified institutional route in the current quarter.
New models, discounts , easing retail finance and focus on semi-urban and rural markets helped car sales grew 8.3% in June, according to monthly data released by SIAM. Sales of motorcycles grew 16.23% and LCVs grew by about 10%, while sales of medium and heavy commercial vehicles fell 31% during the month.
Tata, JSW Steel, Essar Steel and Uttam Galva have evinced interest to acquire a majority stake in Ajmera Group's Shree Precoated Steel, reports suggest.
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