RTTNews - Wednesday, the Indian market is expected to open higher following encouraging cues from Wall Street and the rest of Asia, although underlying mood could be fairly cautious amid concerns about the progress of monsoon and the health of key global economies. The near-term trend still remains uncertain, while at the same time intermittent profit taking is not ruled out.

Finance Minister Pranab Mukherjee on Tuesday assured the nation that the government's borrowings would not crowd out the private sector from its funding needs. In his reply to the debate in the Lok Sabha on the Union Budget, Mukherjee also reiterated the government's resolve to divest stake in PSUs and said that the process of reforms would be launched in due course and all issues, legislative or otherwise necessary would be carried forward to their logical end.

Currently, Asian stocks are trading in positive territory for a second consecutive session on the back of Wall Street cues and a rise in commodity prices. Meanwhile, after being net sellers in the past few sessions, foreign institutional investors bought a net Rs.87.23 crore worth of shares on Tuesday, provisional data released by the BSE showed.

Overnight, some late buying interest helped the U.S. averages end on a positive note, extending their gains for a second straight session. While retail sales report released by the Commerce Department and producer prices report from the U.S. Labor Department revealed that things stabilized in the second quarter, traders largely shrugged off better than expected earnings from Goldman Sachs (GS), as the news was already priced in financial stocks in a rally on Monday. The Dow Jones Industrial Average closed up 0.33%, the Nasdaq Composite advanced 0.36% and the S&P 500 indexes rose 0.53%.

However, the Indian ADRs closed mixed. ICICI Bank rose 3.52%, Sterlite and Reddy's Laboratories advanced over 2% each and Wipro ended up 0.45%, but Infosys edged down 0.44%, MTNL fell 1.35%, Satyam slipped 0.55% and HDFC Bank eased 2.1%.

Crude oil futures finished lower for the ninth time in ten sessions and below $60 for a third day in a row on Tuesday after OPEC forecast an improvement in demand in 2010, but not as great as the one predicted last week by the International Energy Agency. In Asian trading on Wednesday, crude oil is now trading firm at $59.94 ahead of the weekly inventory report from the Energy information Administration. Economists are looking for a drop of about 2.1 million barrels of crude oil supplies and an increase in gasoline stockpiles of 750,000 barrels.

The rupee ended stronger at Rs.48.96 against the dollar on Tuesday, up 12 paisa from its previous close after the domestic stock market bounced back sharply amid strong global cues.

On Tuesday, the Indian market closed sharply higher near the day's high, helped by firm overseas cues on the back of an analyst upgrade for U. S. banks and encouraging news flow from the Asia-Pacific region. Covering up of short positions by speculators and reports that monsoon will intensify in the coming days also influenced trading.

The BSE Sensex finished at 13,854, up 453 points or 3.38% from its previous close, while the S&P CNX Nifty jumped 137 points or 3.46% to 4,111 and the BSE small-cap and the mid-cap indexes rallied over 4% each. On the BSE, gainers outnumbered losers by 1956 to 602 and 76 stocks closed unchanged.

Stocks to Watch

Acting on a complaint by one of the minority shareholders of drug maker Zenotech Laboratories, the Madras High Court on Tuesday halted Daiichi Sankyo from going ahead with its proposed open offer to acquire an additional 20% stake in Zenotech at Rs 113.62 a share.

Essar Oil plans to raise as much as $200-250 million through the issue of fresh equity shares to fund its expansion plans, reports suggest.

Reliance Power said on Tuesday that it had achieved financial closure for its prestigious 1,200 MW Rosa power project in Uttar Pradesh.

DLF wants to raise another Rs.1,900 crore through the sale of some more hotel plots and its wind power business before the end of this fiscal year, reports said.

Jubilant Organosys reported a ten fold rise in its consolidated net profit for the quarter ended June.

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