RTTNews - The Indian market may continue its upward trend, as upbeat economic data around the world suggests the economic slowdown may be abating. Recent economic data from countries such as China, Japan, India and the U.S. hinted that the recession is moderating and growth could resume by the year-end. Additionally, sentiment is likely to remain upbeat on hopes of further economic reforms domestically and due to consistent buying by foreign funds.
Foreign institutional investors bought shares worth Rs.279.67 crore on a net basis on Monday, while domestic financial institutions sold shares worth Rs.196.74 crore, according to provisional data released by the Bombay Stock Exchange.
Overnight, the major U.S. averages extended their gains for a third session as largely promising economic data boosted trader confidence, while General Motors' long-expected bankruptcy filing lifted uncertainty about the automaker's fate.
While data from the Institute for Supply Management showed a slower pace of contraction in activity in the manufacturing sector in the month of April, a report released by the commerce department showed that construction spending unexpectedly increased in the month of April. Additionally, a separate report from the commerce department revealed that personal income unexpectedly rose in the month of April. The Dow Jones Industrial Average closed up 2.6%, the Nasdaq Composite finished up 3.06% and the S&P 500 index rose 2.58%.
The Indian ADRs also closed sharply higher across the board. Among the major gainers, Satyam Computers jumped 7.55%, Sterlite rallied 6.99%, MTNL climbed 6.05%, Wipro advanced 5.59%, Infosys gained 3.3% and ICICI Bank added 3.02%.
Crude oil futures for July delivery settled at a near seven-month high of $68.58 a barrel, up 3.42% in New York trading on Tuesday, boosted by upbeat economic reports and a weak dollar. In Asian trading on Tuesday, crude oil is now trading at $68.10, down 0.70%.
The rupee closed at Rs.46.94/95 against the dollar, up 0.4% on Monday following the dollar's weakness in overseas markets and strong gains in equities across the Asia-Pacific region.
On Monday, the Indian market closed sharply higher near a 9-month high, boosted by sharp gains across the world equity markets. Growing optimism about pro-industry steps by the government and steady economic growth for the full year 2008-09 also helped improve investor sentiment. After moving choppily in a range of 14,907-14,655, the BSE Sensex closed at 14,841, up 215 points or 1.47% from its previous close, while the S&P CNX Nifty rose 81 points or 1.82% to 4,530.
Auto stocks may remain in the spotlight as more May sales numbers will be out on Tuesday. Metal stocks could extend their gains on account of firm metal prices on the London Metal Exchange.
Reliance Industries could be in focus on reports that it has signed a gas supply five-year contract with Ratnagiri Gas & Power.
SpiceJet could move amid reports that it is looking at inorganic growth and a rival low-cost airline could be a choice for acquisition.
IT stocks may rise after communications and IT minister A Raja hinted that he would work towards extending the tax concessions given to software technology parks under the STPI scheme.
Telecom stocks could also see some activity following reports that a delayed auction of third-generation wireless spectrum will be held by the end of this year.
Axis Bank could be in focus after it announced plans to raise a whopping Rs.30 billion through issue of debt in the local and overseas markets.
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