RTTNews - The Indian market may open flat with a positive bias after bellwether Infosys kick stared the earning season with a 17.2% year-over-year rise in its first quarter net profit, beating market expectations.
Analysts expect a marked improvement in the first quarter's performance of many companies, except developers, industrial metals, pharma companies, IT and other export-oriented sectors such as textiles, on the back of local demand and government's stimulus measures announced between last December and March.
More precisely, the earnings could be better than the last two quarters, though they be marginally lower or flat when compared with the year-ago period. However, on the direction of the market post-release of earnings announcements from blue-chip companies, analysts hold different views.
That said, global cues remain mixed. While the major U.S. averages showed modest gains on the back of rise in beaten-down technology and commodity shares overnight, Asian markets are now trading mixed.
Also, the release of May industrial output report could influence market movement for the day. The IIP index is expected to rise 1.4% in May, the same as lat month's provisional rise after three straight months of contraction.
Foreign institutional investors (FIIs) sold shares worth Rs.545.55 crore on a net basis on Thursday, while domestic institutional investors bought shares worth Rs.578.16 crore, provisional data released by the BSE showed. Meanwhile, FIIs bought shares worth Rs.775.50 crore and domestic mutual funds invested a net Rs.196.30 crore on Wednesday, according to market regulator SEBI.
Meanwhile, stocks on Wall Street moved in a choppy fashion on Thursday before closing modestly higher after a report from the Labor Department showed that weekly jobless claims fell below the 600,000 level for the first time since January. On the other hand, traders largely shrugged off May wholesale trade data from the Commerce Department, which showed that wholesale inventories fell by less than economists had been expecting. The Dow Jones Industrial Average ended up 0.1%, the Nasdaq rose 0.3% and the S&P 500 index added 0.4%.
Crude oil futures snapped a six-day losing streak amid bargain hunting on Thursday, as a drop in jobless benefit claims sparked hopes the economy could improve and gasoline futures staged a late supportive rally from an oversold condition. .After settling at $60.41 a barrel, up 27 cents in New York trading on Thursday, crude oil is now trading at $60.14, down 0.45% in Asian trading.
Likewise, the rupee recovered from an eight-week low on Thursday as the dollar and yen fell against the euro, but choppy trading in the domestic stock market restricted big gains. Rising from an early low of Rs.49.06, the rupee closed at Rs.48.72/73 against the dollar, up 0.3% from the previous close.
Stocks to Watch
Financials could be in the spotlight after the financial sector showed impressive gains on Wall Street overnight on the back of a positive broker comment on Goldman Sachs. IT stocks would also be in focus after Infosys reported a 5% drop in its sequential net profit for the first quarter in line with its rupee guidance earnings forecast .
State-run power firm NTPC overstated profit by Rs 938 crore in 2007-08, Bharat Electronics by Rs.61 crore and BEML by Rs.3.06 crore, but chances of Satyam-like frauds in PSUs are very remote, the Comptroller and Auditor General (CAG) of India said in a report to the parliament.
Praj Industries' net profit rose a modest 2.34% to Rs 25.33 crore in the quarter ended June compared to Rs 24.75 crore in the corresponding period last year.
Sterlite Industries' power generation arm, Sterlite Energy, plans to invest Rs 20,000 crore over the next one year to create additional capacity of 4,500 MW, reports suggest.
Larsen and Toubro' chairman and managing director AM Naik has sold shares 39,185 shares worth Rs 6.42 crore, representing a 0.01 percent stake in the company, L & T said in a filing to the stock exchanges.
Ranbaxy Laboratories said that it is voluntarily recalling a batch of its top-selling drug sotret isotretinoin used for skin treatment, after it failed a dissolution test to assess the efficacy, uniformity and stability of the dosage.
Idea Cellular received the shareholder nod to hive off its towers into a subsidiary.
On Thursday, the Indian market ended a volatile session flat despite gains in European stocks and U.S. index futures. Trading was volatile, as worries over progress of monsoon rains and fears of a possible downgrade of the nation's sovereign rating by international rating agencies led to intermittent profit taking.
After trading in a range of 13,879-13,644, the BSE Sensex finished at 13,757, down 12 points or 0.08%, but the S&P CNX Nifty ended at 4,081, up 2 points or a mere 0.05%. Sector-wise, while metal, healthcare and defensive FMCG stocks rose over 1% on an average, consumer durable, capital goods and IT stocks bore the brunt of the selling.
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