Friday, the Indian market may open on a subdued note amid mixed global cues. While the U.S. markets closed higher overnight amid a combination of some mixed corporate news and some disappointing economic reports, markets across the Asia-Pacific region are trading mixed this morning.
In the near term, marketmen expect some consolidation at current levels. A section of analysts also warn that the market could fall between 10-15% on profit taking due to the uncertainty over the outcome of the month-long parliamentary elections.
That said, the pattern of fund trading might largely influence investor behavior. After being net sellers in the past 2-3 sessions, FIIs resumed their purchases and have bought shares worth Rs.241.13 crore on a net basis on Thursday. Domestic institutions, including mutual funds, also bought shares worth Rs.425.83 crore on a net basis, according to data released by the Bombay Stock Exchange.
In this context, the market is likely to see hectic volatility on alternate bouts of buying and profit taking ahead of the weekend. News flow from the overseas markets and global cues, especially from the European markets and the direction of U.S. index futures may also influence market movement during the day.
After moving in a listless manner for a considerable length of time, stocks on Wall Street managed to edge higher during the last few minutes on Thursday, as financials lead the charge ahead of the Treasury's announcement regarding measures for bank stress tests. The Dow Jones Industrial Average rose 0.89%, the Nasdaq Composite moved up 0.37% and the S&P 500 index closed up nearly 1.0%.
In economic news, a report released by the Labor Department showed that jobless claims rose to 640,000 from the previous week's revised figure of 613,000, while another report from the National Association of Realtors showed that the annual rate of existing home sales in the month of March fell 3.0 percent to 4.57 million. Economists had expected existing home sales to slip to a 4.65 million-unit rate.
Meanwhile, the Indian ADRs closed mostly higher with the exception of Satyam Computers. ICICI Bank surged up 9.34%, HDFC Bank rallied 6.4%, Wipro advanced 5.63%, Sterlite Industries soared 6.26%, Infosys gained 2.58% and Reddy's Laboratories moved up 0.92%, but Satyam fell 0.53%.
Crude oil extended its gains on Thursday in U.S. trading as a weaker dollar outweighed another rise in weekly inventories amid the release of mixed economic news. After closing at $49.62 a barrel, up 77 cents on Thursday, crude oil in now trading at $49.24 a barrel, down 0.77% in Asian trading.
The rupee rose for the second day in a row as a bounce back in the stock market boosted hopes of foreign fund inflows. Gains in the other Asian currencies also helped the currency end stronger. The rupee closed at Rs.49.92/94 against the dollar, up 0.8% over the previous close.
On Thursday, the Indian market Indian market snapped a three-day losing streak as considerable recovery in the other global markets encouraged investors do some bargain hunting amid attractive valuations. The BSE Sensex finished at 11,135, up 317 points or 2.93% over the previous close and the S&P CNX Nifty rose 93 points or 2.80% to 3,424.
Stocks received good support across the sectors. While IT, metal and realty stocks led the gainers, FMCG, healthcare and stocks of public-sector companies ended with modest gains. Meanwhile, the annual inflation rate for the week ended April 11 rose to 0.26% from 0.18% in the previous week, as essential food articles like cereals, eggs, salt, and fruit and vegetable turned dearer. The inflation rate was at 7.95% in the corresponding week a year ago.
Stocks to Watch
Banking stocks may rally following gains among their U.S. peers overnight.
SpiceJet and ABG Shipyard could be in the spotlight after the Bombay Stock Exchange banned short selling in these stocks from May 4. These stocks have ceased to fulfill eligibility criteria and hence would not be available for trading in the Securities Lending and Borrowing segment, the BSE said in a release.
Satyam Computers could be in focus after foreign fund house Fidelity offloaded 12 crore shares of the fraud-hit IT firm through open market transactions.
Tata Motors may move on reports that it will roll out Jaguar and Land Rover cars in India by the middle of 2009. Market heavyweight Reliance Industries may be in focus after it has posted its second consecutive decline in quarterly profit in line with market expectations.
HDFC Bank could move after its net profit for the quarter ended March surged nearly 34% year-over-year, buoyed by robust growth in fees, commissions and earnings from foreign exchange and derivatives transactions.
Pyramid Saimira Theatre may come under selling pressure on reports that market regulator SEBI has in an interim order debarred Nirmal Kotecha, a former promoter of the company and over 250 other entities from dealing in the securities market including IPOs in any manner till further orders.
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