Thursday, the Indian market may open higher, in line with a positive trend in the other Asian markets this morning. The market may witness extreme volatility because of the expiry of April month derivative contracts. Stock-specific buying could be seen, but big gains are unlikely due to a truncated week. The market will remain closed for trading on Thursday because of polling in Maharashtra, and then again on Friday on account of World Labour Day.
On Wednesday, foreign funds sold shares worth Rs.256 crore on a net basis, while domestic financial institutions sold shares worth Rs.202 crore.
Currently, markets across the Asia-Pacific region are trading higher as investors started to look past the swine flu headlines. China's Shanghai Composite index is rising 1.07%, Hong Kong's Hang Seng index is up 2.10% and South Korea's KOSPI is gaining 2.22%. The Japanese market is closed for a national holiday.
After showing a lack of direction throughout the trading day, stocks on Wall Street ended modestly lower overnight, as traders digested mixed economic and corporate news combined with continued concerns that the swine flu outbreak may become a pandemic. Reports about the early results of stress test analysis of U.S. banks also added to investor jitters.
In economic news, a report released by the Conference Board showed that that the consumer confidence index jumped to 39.2 in April from an upwardly revised 26.9 in March. Economists had expected the index to increase to 29.7 from the 26.0 originally reported for the previous month. Separately, a report from Standard and Poor's showed that the S&P/Case-Shiller 20-City Composite Home Price Index fell at an annual rate of 18.6 percent in February, a modest deceleration from the 19.0 percent drop in prices that was reported for January.
The Dow Jones Industrial Average slipped 0.1%, the Nasdaq Composite edged down 0.33% and the S&P 500 index ended down 0.27%.
Meanwhile, the Indian ADRs fell sharply across the board. Among the major decliners, Sterlite Industries slumped 5.8%, Satyam Computers fell 3.8%, ICICI Bank declined 1.9%, Reddy's Laboratories lost 1.62% and HDFC Bank moved down 1.22%
For the second day in a row, the rupee closed weaker at Rs.50.51 against the dollar, weighed down by losses in the stock market and worries about the swine flu outbreak.
Dollar demand from oil refiners and other importers also weighed on the currency.
After opening lower on worries about swine-flu outbreak, crude oil futures for June delivery recouped most of its losses while finishing at $49.92 a barrel, down $0.22 in New York trading on Wednesday. In Asian trading, crude oil is now trading at $49.41 a barrel, down 1.02%.
On Tuesday, the Indian market fell sharply on profit taking, as investors squared their long positions ahead of the expiry of April series derivative contracts amid extremely negative global cues. Renewed concerns about the impact of swine flu outbreak on global trade and consumer confidence and reports that U.S. banks may have to raise more capital, also weighed on investor sentiment. The BSE Sensex closed at 11,002, down 370 points or 3.25% over the previous close and the S&P CNX Nifty fell 108 points or 3.10% to 3,362. Rate-sensitive realty and banking stocks were the worst hit. Metal and capital good stocks also corrected sharply on concerns about the impact of Swine flu on the global economy.
Stocks to Watch
Unitech could be in focus after the US-based foreign institutional investor Morgan Stanley bought an additional 5.1% stake in the company through qualified institutional placement.
Info Edge (India) may move after foreign fund Citigroup Global Markets Mauritius bought 4.49 lakh shares of the company at Rs.530 per share, through an open market transaction on the National Stock Exchange on Tuesday.
Aditya Birla Nuvo may move on reports that it has lined up a capital expenditure of 3.5 billion rupees for FY10. Hero Honda Motors may see some activity amid reports that it will invest Rs.100 crore in five years in its auto-part plant in Ghaziabad.
Reliance Industries could be in focus after it has signed the gas sale and purchase agreements with 11 power plants including Reliance Infrastructure. State Bank of India could move after it has cut interest rates on education loans for new borrowers.
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