Wednesday, the Indian market may open lower in line with a weak trend in the rest of the Asian markets after disappointing retail sales data and a weak producer prices report sent stocks lower on Wall Street overnight.
IT bellwether Infosys will announce its 4th quarter results on Wednesday before the stock market opens for trading. More than the company earnings, investors will closely watch its revenue guidance for the financial year 2009-10 and its comments on the business outlook for the software sector.
According to reports, Infosys' net profit has declined 1.71% to Rs 1, 613 crore and revenue fell 2.61% to Rs.5, 635 crore for the March quarter compared to the corresponding period last year.
While the market may face resistance after a seven-day rally, the extent of buying by FII's could influence market movement for the day. On Monday, these funds bought shares worth Rs.580.49 crore on a net basis.
After ending the previous session mixed, stocks on Wall Street saw substantial weakness during trading on Tuesday, as traders reacted to disappointing retail sales data and largely shrugged off some optimistic comments from President Obama and Federal Reserve Chairman Bernanke. A report from the Commerce Department showed that retail sales fell 1.1 percent in March following an upwardly revised 0.3 percent increase in February. The decrease came as a surprise to economists, who had expected sales to increase by 0.3 percent.
While better-than-expected financial results from Goldman Sachs restricted losses on Wall Street overnight, results from the other two top banks, JP Morgan on Thursday and Citigroup on Friday, will be watched to gauge the impact of the recent changes in accounting on profits.
The major averages all closed firmly in negative territory, although off their worst levels of the day. The Dow Jones Industrial Average fell 1.71%, the Nasdaq Composite drifted down 1.67% and the S&P 500 index closed down 2.01%.
The Indian ADRs also fell sharply with the exception of MTNL. Satyam Computers plunged 11.11%, ICICI Bank tumbled 4.07%, Sterlite Industries fell 3.5%, Wipro declined 3.54% and Infosys moved down 2.44%, but MTNL closed up 1.75%.
In Asian trading, crude oil is currently up 0.08% at $49.45 a barrel in electronic trading. Light sweet crude for May delivery dropped $0.64 to $49.41 a barrel on Tuesday amid choppy trading, as traders await the weekly inventory report from the Energy Information Administration later in the day.
The Indian market closed Monday's session higher on the back of strong gains in metals and banking stocks, as positive news flow from overseas, consistent buying by foreign funds over the past few weeks and the strengthening of the rupee to its highest level in 6 weeks against the US dollar helped the market rebound sharply from its days lows.
The BSE Sensex finished at 10,967, up 163 points or 1.51% over the previous close and the S&P CNX Nifty rose 41 points or 1.21% to 3,383. Second-line stocks witnessed a sharp rally, outperforming the benchmarks. While the broad-based BSE 500 index rose nearly 2%, the mid-cap index advanced 3.17% and the small-cap index rallied 3.92%. The two stock exchanges and the forex market were closed on Tuesday for 'Babasaheb Ambedkar Jayanti'.
Stocks to Watch
Bharti Airtel could be in focus after Vodafone Essar beat Bharthi in monthly subscriber additions for the first time in February.
Polaris Software Lab could move on reports that it plans to enter 40 new markets across the globe in the next five years.
Sterlite Industries could be in the spotlight after Grupo Mexico has put in a USD 1.3 billion counter bid for the bankrupt US mining company - ASARCO. Earlier, Sterlite Industries had offered USD 1.7 billion for ASARCO. Sterlite's offer comprised USD 1.1 billion in cash and USD 600 million in notes to take over the ailing Arizona-based miner.
Pantaloon Retail may move after the company decided to spin off its fashion and retail divisions into wholly owned subsidiaries.
Bhushan Steel may see some activity on reports that it is in talks Japan's Sumitomo Metal Industries to build a steel plant in India.
Britannia Industries could be in focus on reports that French food giant Groupe Danone has sold its 50 percent interest in ABI Holdings (held through Britannia Brands) to Wadia Group, in an attempt to resolve a dispute over the intellectual property of Tiger brand of biscuits.
GHCL may see some activity after it has bought back foreign currency convertible bonds (FCCBs) worth $11 million from overseas investors at a 60% discount funded through internal accruals.
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