Tuesday, the Indian market is likely to extend gains from the previous session on the back of strong global cues. However, the market might show volatility ahead of the expiry of March series derivatives contract on Thursday. U.S. stocks closed sharply higher on Monday following the federal government's plan to mop up toxic assets from banks' balance sheets and the Asian markets are currently trading higher.
The Indian market closed sharply higher on Monday amid strong global cues in anticipation of the U.S. government's plan to buy as much as $1 trillion in troubled mortgages and related assets from financial institutions. Additionally, investors bought stocks across the board on hopes of further monetary action by the RBI and on signs of a revival in capital inflows after FIIs bought shares worth Rs.800 crore on a net basis last week. The BSE Sensex gained 457 points or 5.10% to settle at 9,424, and the S&P CNX Nifty rose 133 points or 4.73% to close at 2,940.
The turnover in the Bombay Stock Exchange totaled Rs. 3,718.74 crore and that in the National Stock Exchange totaled Rs. 10,295.48 crore.
FIIs were gross buyer of equities worth Rs 1,466.95 crore on Monday, whereas they sold equities worth Rs 1,090.72 crore resulting in a net buy of Rs 376.23 crore, according to the provisional data available with the Bombay Stock Exchange website. On Friday, FIIs were net buyers of Indian shares worth Rs 49.40 crore, the latest data available with the market regulator Securities and Exchange Board of India showed.
The rupee strengthened for a fourth straight session on Monday, ending 20 paise higher to the U.S. dollar at 50.46/50.47 compared to Friday's close at 50.66/50.68 against the dollar on the back of stock gains and dollar weakness overseas.
In the U.S., stocks closed sharply higher on Monday following the announcement of the Obama administration's plan to purchase up to 1 trillion worth of toxic assets from banks as well as on a better-than-expected existing home sales report.
Crude oil prices surged higher on Monday as the Obama administration's latest plan to help struggling banks boosted the markets and improved the prospects for energy demand. Light sweet crude for May delivery rallied to close at $53.80 per barrel on the New York Mercantile Exchange, up $1.73 for the session.
Indian ADRs ended higher in the regular session on Monday. In the technology sector, Infosys surged 6.68%, Wipro climbed 19.55% and Satyam gained 4.49%. Automaker Tata Motors rose 13.33%. Among banks, HDFC Bank soared 23.42% and ICICI Bank gained 15.95%. In the telecom space, Mahanagar Telephone Nigam climbed 16.45%.
Stocks to Watch
Tata Tea might be in the spotlight after reports that the tea manufacturer will consolidate its beverage business into a single entity to simplify operations.
The UB Group intends to enter the tourism industry by promoting its Four Seasons winery at Baramati in Maharashtra as a lifestyle destination. The company plans to invest 1 billion rupees in the venture over the next few years.
Shares of oil marketing companies are likely to be in the limelight after the government issued oil bonds worth Rs 10,000 crore to them to compensate for their under-recoveries on the sale of petroleum products during the current financial year.
DLF Assets, owned by the promoters of real estate firm DLF Ltd, is in talks with banks and financial institutions to raise about Rs 2,500 crore as debt to pay back its parent firm.
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