RTTNews - Wednesday, the Indian market is likely to open higher on the back of favorable Asian cues this morning. However, trading may remain range bound on alternate bouts of buying and profit taking, While underlying sentiment may remain upbeat on expectations of further reforms by the Congress-led UPA coalition government, considerable amount of profit taking following a huge 84% rally since March lows may lead to volatility.
Provisional data released by stock exchanges showed that both foreign and domestic funds were heavy sellers on Tuesday. While foreign funds sold shares worth Rs.233 crore, domestic financial institutions sold shares worth Rs.424 crore.
Buoyed by the recent stock market rally and due to fresh inflows in liquid funds, the combined average assets under management of mutual funds crossed the Rs.6 trillion-mark (Rs.6.38 lakh crore) in May, an all time high for the fund industry since its inception, AMFI (Association of Mutual Fund of India) data showed on Tuesday.
Reports suggest that the government is in final stages of talks with merchant banker NM Rothschild to put in place a detailed roadmap on disinvestments in state-run companies. The government is also expected to come out with a favorable FDI policy on foreign investment in the retail sector.
On Wall Street, the major U.S. averages extended their winning streak to a fourth successive session on Tuesday with traders reacting positively to the better-than-expected pending home sales numbers for the month of April. However, with traders expressing some uncertainty about the outlook for the markets, stocks ended well off their best levels of the day. The Dow Jones Industrial Average finished up by 0.22%, the Nasdaq Composite rose 0.44% and the S&P 500 index ended up 0.2%.
Meanwhile, the Indian ADRs closed mixed. Satyam Computers jumped 20.61%, Sterlite Industries advanced 2.48%, Infosys rose 1.93%, Wipro gained 0.4% and MTNL edged up 0.22%, but ICICI Bank shed 0.84%, HDFC Bank slipped 0.11% and Reddy's Laboratories fell 3.17%.
Crude oil futures finished almost flat at $68.55 a barrel in New York trading on Tuesday, as profit taking after a 7-day rally outweighed optimism about an economic recovery. Investors also awaited the Energy Information Administration's weekly inventory report. In Asian trading on Wednesday, crude oil is trading almost unchanged at $68.50 a barrel.
On Tuesday, the benchmark for the Indian market, the Sensex ended modestly higher after bouncing back from the day's lows. Profit taking after a 4-day winning streak weighed on market movement. While the BSE Sensex closed at 14,875, up 34 points or 0.23% from its previous close, the S&P CNX Nifty slipped 5 points or 0.10% to 4,525. Investors paid little attention to a reassuring infrastructure report. Compared to large caps, second-line stocks closed on a better note. The mid-cap index on the BSE rose 0.82% and the small-cap index added 0.91%.
Stocks to Watch
Bharti Airtel could be in focus on reports that MTN's biggest shareholder Public Investment Corporation is seeking a higher price for a proposed $23 billion cash and share swap deal with Bharti.
DLF could move on reports that it has decided to scrap a Rs.700-crore IT SEZ at Rajarhat, West Bengal.
HPCL may see some activity after its net profit for the March quarter jumped almost 13 times compared to the same quarter last year.
Public sector stocks could be in the spotlight amid reports that the country's second-largest state-run oil-explorer Oil India will launch an initial public offer by September this year.
Bajaj Auto may be in focus on repots that it is exploring markets in Africa and Europe for its motorcycles, the Boxer, CT100 and the Pulsar.
MTNL could move after it launched its 3G Jadoo Pre-paid Services at a low entry point of Rs.300 in New Delhi.
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