Friday, the Indian market is likely to open higher helped by strong cues from the U.S. and the Asian markets. On Thursday, foreign funds continued their buying and bought shares worth Rs.479 crore on a net basis and the combined total turnover on both the exchanges exceeded Rs.1-lakh crore mark for the second day.
Nevertheless, the market tumbled as domestic financial institutions (DFIs) booked profits following a handsome rally in the past few weeks. On a net basis, DFIs sold shares worth Rs.1, 124 crore on Thursday, according to provisional data on the Stock Exchanges.
While underlying sentiment remains positive, the extent of buying by FIIs and the strategy of domestic institutions would influence market movement for the day. The market may show extreme volatility amid weekend considerations, uncertainty on the political front and an extended profit taking if any.
Currently, markets across the Asia-Pacific region are trading mostly higher. Hong Kong's Hang Seng index is rising 2.17%, Japan's Nikkei 225 index is gaining 2.23% and South Korea's KOSPI is up 0.62%, but China's Shanghai Composite index is moving down 0.88%.
Stocks on Wall Street closed at their highest level in more than two months on Thursday led by financial and technology stocks on increasing confidence that the economy's slide is slowing.
In corporate news, financial services giant JP Morgan's first quarter financial results came in above analyst estimates and Nokia said it expects second quarter worldwide mobile device volume to be flat or show modest sequential growth. On the economic front, a Commerce Department report on housing starts and the Labor Department's report on initial jobless claims beat analyst estimates. The Dow Jones Industrial Average rose 1.19%, the Nasdaq Composite rallied 2.68% and the S&P 500 index closed up 1.55%
However, the Indian ADRs ended mixed. While Infosys gained 2.57%, Wipro rallied 3.23% and HDFC Bank added 1.5%, Satyam Computers fell 2.04%, Reddy's Laboratories tumbled 3.35%, MTNL declined 3.62%, Sterlite Industries drifted down 2.04% and ICICI Bank moved down 1.72%.
In Asian trading, crude oil is currently trading down 0.60% at $49.68 a barrel in electronic trading. After hitting $50.48 earlier in the day, light sweet crude for May delivery ended at $49.98, up 1.5% on the New York Mercantile Exchange on Thursday, even as mixed data from the U.S. and China reminded investors that any signs of economic recovery were tentative.
The rupee snapped its three-day winning streak on Thursday after the stock market reversed its direction and fell sharply on profit taking. After rising to Rs.49.34 in early trading, the currency shed all its early gains and finished at Rs.49.77/78, down 7 paise or 0.1% over the previous close.
On Thursday, the Indian market snapped its 8-day rally on profit taking amid political uncertainty on the outcome of the month-long parliamentary elections. Additionally, apprehensions over the quality of corporate earnings for the March quarter led to heavy unwinding of long positions as the benchmark Sensex jumped 38 percent since its lows on March 9. The BSE Sensex finished near the day's lows at 10,947, down 337 points or nearly 3% over the previous close and the S&P CNX Nifty moved down 115 points or 3.29% to 3,369. Small-caps and mid-caps bore the brunt of the selling.
Stocks to Watch
JetAirways could be in focus on reports that the company would trim its workforce and establish a centralized control office in Mumbai to cut costs and enhance service delivery.
Maruti Suzuki may move following reports that it will invest Rs.1, 200 crore to replace its existing series of engines with the fuel-efficient KB series engines.
Sugar stocks could be in the spotlight on reports that the retail price of sugar is likely to cross Rs.30 per kg due to inadequate cane availability.
Unitech may see some activity on reports that it has raised Rs.1, 620 crore through issue of new shares to qualified institutional investors at Rs.38.50 per share to meet its debt obligations. Unitech closed at Rs.43.20 on Thursday.
Reliance Industries may be in focus on reports that it will start selling fuel in the domestic market by next week, as it has converted its first refinery at Jamnagar from an Export Oriented Unit to a normal status with effect from Thursday.
State Bank of India could move on reports that it will lend Vodafone-Essar, Rs.10000 crore to finance the joint venture's entry into 3G (third generation) telecom services and expansion of its broadband operations.
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