RTTNews - The Indian market may open higher on Friday on the back of fairly positive overseas cues. Trading may remain range bound on alternate bouts of short covering and extended profit taking ahead of the weekend.
A modest rebound on Wall Street overnight led by some encouraging economic reports may lead to some stock-specific buying in the domestic market, but a sharp recovery if any, largely hinges on whether FIIs resume their purchases.
FIIs remained net sellers for the fourth straight day on Thursday, as they offloaded shares worth Rs.584.87 crore on a net basis. On Wednesday, they sold shares worth Rs.226.60 crore, market regulator SEBI data showed.
Meanwhile, in a series of measures affecting market participants, the SEBI on Thursday abolished the entry load on investment in mutual funds, allowed clients to pay the upfront commission separately to the distributor directly, approved the concept of anchor investor in public issues and decided to do away with some of the disclosure requirements related to the rights issues.
After trading in a range for most of the session, the major U.S. averages finished largely on the upside Thursday, helped by a series of encouraging economic reports. While a report from the Philadelphia Federal Reserve showed that the pace of contraction in the mid-Atlantic region's manufacturing slowed by much more than economists had been anticipating, another report from the Conference Board showed that its leading indicators index rose 1.2 percent in May, more than what economists had expected.
Additionally, according to the Labor Department, weekly jobless showed the first drop in continuing claims since the week ended January 3rd.. While the tech-heavy Nasdaq ended nearly flat, the Dow Jones Industrial Average and the S&P 500 index rose 0.69% and 0.84% respectively.
The Indian ADRs closed mixed. MTNL slumped 6.71%, ICICI Bank tumbled 3.02%, Strerlite fell 1.21% and Wipro ended down 0.43%, but Infosys edged up 0.14%, Reddy's Laboratories rose 1.26% and HDFC Bank added 2.68%
Crude oil futures moved slightly higher on Thursday, as reassuring economic data boosted hopes of a speedier economic recovery. News that Royal Dutch Shell had halted some oil production in Nigeria following an attack by militants on its pipelines in Bayelsa state in the Niger Delta also offered some support. After settling at $71.37, a barrel, up 34 cents or 0.48% in New York trading on Thursday, crude oil was last trading at $71.45 a barrel, up 0.11% in Asian trading.
The rupee dropped further by six paise to Rs.48.19/20 against the dollar on Thursday on renewed concerns about portfolio outflows amid sustained weakness in the stock market.
After a sharp sell-off in the previous session, the Indian market pulled back further on Thursday amid frantic selling in stocks across the board with the exception of the IT sector. Investors and funds took profits in overvalued stocks on realization that the market has risen too fast in a short time and a sharp correction is imminent surrounding the forthcoming budget.
Considerable amount of selling by foreign funds in the the past few sessions and weak global cues also weighed on market movement. The BSE Sensex finished at 14,266, down 257 points or 1.77% from its previous close, the S&P CNX Nifty fell 105 points or 2.40% to 4,251, the BSE mid-cap index moved down 2.87% and the small-cap index shed 3.70%. On the BSE, decliners outnumbered advancers by 2094 to 534 and 56 stocks closed unchanged.
In corporate news, Tata Motors could see some activity on reports that it is likely to set up exclusive showrooms in smaller towns as part of an India-specific marketing and distribution strategy for its premium cars Jaguar and Land Rover.
State Bank of India may move amid reports about its merger plans for two of its little-known subsidiaries, SBI Commercial and International Bank and factoring services provider Global Trade Finance, with itself.
Aviation stocks may be in focus on reports that online air travel bookings have been impacted by about 5%-10% following Rs.400/ticket hike in fuel surcharge.
Capital good stocks may be in focus on reports that the government may allow higher depreciation for investment in new plant and machinery for companies to give a fillip to industrial growth.
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