Monday, the Indian market is likely to open higher following favorable global cues. On Thursday, the major indices on Wall Street surged up more than 3% following positive quarterly results from Wells Fargo. Additionally, the U.S. government's report, which showed that jobless claims dropped more than estimated last week, improved sentiment. The Dow Jones Industrial Average closed up 3.14%, the Nasdaq Composite closed up 3.89% and the S&P 500 index rose 3.81%.
Currently, markets across the Asia-Pacific region are also trading up for a third consecutive day as traders focused on the Japanese stimulus package. Japan, the world's second-largest economy announced on Friday, its plans for record stimulus spending of $150 billion and millions of new jobs.
In China, the central bank announced that the number of new loans issued and underwritten reached a new record high in March. China's exports fell for 5th straight month in March, but the drop was not as sharp as the previous month, providing hope that the impact of the world financial crisis on the country's key export sector may be easing.
Back home, March was probably one the best months ever for the equity-linked savings schemes, as the net inflows into the schemes totaled Rs.547 crore far exceeding industry expectations. In economic news, India's total reserves, including gold and SDR rose $2.8 billion to $255.2 billion during the week ended April 3 mainly due to inflows from foreign funds and the weakening of dollar, according to the figures released by the central bank.
Rate cut expectations in the range of 50-100 basis points in the next few weeks may keep underlying sentiment positive, while volatility may continue as savvy investors, especially foreign funds, may press heavy sales amid volatility expected ahead of the general elections and the March quarter earnings announcements. On the other hand, earnings expectations are low and there is wide-open potential for pleasant surprise.
Last week, strong global cues and fairly persistent FII buying on expectations that the struggling world economy may have bottomed out boosted the Indian market for the fifth week in a row. The BSE Sensex jumped 455 points or 4.40% to 10,804 and the S&P CNX Nifty closed at 3,342, up 131 points or 4.07% for the week. The Sensex has climbed 32.39% from its March lows on March 9. Second-line stocks outperformed the benchmarks, with the BSE mid-cap index gaining 7.45% and the small-cap index adding 9.62% in the week. The stock market and the forex market were closed on Friday for 'Good Friday.'
Stocks to Watch
Tata Steel may rise on reports that it may sell 20% more steel in the domestic market in FY10 and that it eyes $1-billion in cost savings at is UK subsidiary, Corus during FY-10.
JSL may see some activity on reports that it plans to make Indonesia a manufacturing hub to supply stainless steel products in the South-East Asian countries such as Singapore, Malaysia, Vietnam and Thailand.
Realty stocks may rise on signs of some revival following reports about increasing enquiries led by value-for-money buyers.
Banking stocks may see some buying interest after financials jumped on Wall Street Thursday on better-than-estimated earnings of Walls Fargo and speculation that all 19 American banks examined by the government will pass government stress tests. Moreover, the RBI relaxed provisioning norms for restructured loans, which will help banks improve their bottom lines.
SBI and IDBI Bank could be in focus after they cut interest rates on their term deposits by 25 to 50 basis points, paving the way for rate cuts in lending rates in the near term.
Software stocks are likely to be subdued on reports that the BT group is seeking at least 20% lower bidding rates for several existing and new projects from Infosys and Tech Mahindra. Meanwhile, Infosys could be in spotlight on reports that it has sent out 2,100 employees last week. Infosys' earnings announcement for the March quarter that is due on 15th April may set a trend for the market in the short term.
Sugar stocks may see some profit taking after rallying in the past 2-sessions. Although sugar production is expected to decline in the year to Sep'09, reports suggest that carry-forward stocks and demand elasticity may ensure better availability of sugar at reasonable prices.
Tata Motors could move as it is learnt to have received commitment from Standard Chartered Bank for a $200-million loan to refinance the $2-billion bridge loan taken for Jaguar-Land Rover acquisition. Reports suggest that the company is now close to clinching a loan of £800 million (Rs.5840 crore) from a syndicate led by Royal Bank of Scotland and Lloyds.
Madras Cements may see some activity after the company decided to incorporate a wholly owned subsidiary for production and sale of sugar and allied products.
Pantaloon Retail could be in focus on reports that the company will be divided into three separate companies catering to FMCG & consumer durables, retail, and fashion.
Satyam computers may be in focus as the sell-off process of the IT company reached its last leg. Companies such as Tech Mahindra, L&T, Cognizant and Wilbur Ross are likely to submit their technical and price bids today.
Siemens may move after it has set up a gas insulated switchgear-manufacturing facility at Aurangabad with an investment of Rs.40 crore.
Keroram Industries may be in focus on reports that it is merging its realty subsidiary with itself. Maytas Infra could move after it postponed a board meeting, which was scheduled for Friday, without disclosing any reason for the postponement.
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