Monday, the Indian market is likely to make a gap-up opening amid strong global cues. The US markets gained nearly 2.5% in the last 3 sessions of the previous week, when the Indian market remained shut for public holidays on Thursday and Friday. Currently, markets across the Asia-Pacific region are showing solid gains on the back of incremental positive economic data, a rally in the prices of commodities and higher Asian currencies.
That said, the market might show considerable volatility, as investors look forward to the findings on U.S. banks stress tests later this week. Uncertainty on account of outcome of parliamentary-elections may also lead to some profit taking.
In economic news, a group of Asian nations agreed to set up a $120 billion foreign-currency reserve fund, with Japan offering another $60 billion in swap facilities to insure the yen's liquidity.
Back home, the annual Wholesale Price Index-based inflation rose 0.57 per cent for the week ended April 18, above the previous week's annual rise of 0.26 per cent, government data released after trading hours showed on Thursday.
Separately, India's trade data released by the ministry of commerce and industry on Friday came in line with market expectations. While exports declined by 33% in March to $11.5 billion compared to $17.2 billion in the same month last year, imports dipped 34% to $15.5 billion from $23.6 billion. As a result, the trade deficit in March at $4 billion was substantially smaller than the $6.3 billion clocked in March last year.
Last week, despite many unsettling developments such as the swine flu outbreak and reports about additional capital requirements for large U.S. banks, the benchmark for the Indian market, the Sensex continued its upward trend for the 8th week in a row, helped by robust FII flows, better-than-expected fourth quarter earnings announced by some companies and some frantic short-covering of derivative contracts.
Trading was extremely volatile and action was concentrated mainly in the large-cap stocks. While the BSE Sensex showed a modest gain of 0.65% in the three-day truncated week, the S&P CNX Nifty fell 7 points or 0.19% to 3,474. The Nifty April series derivatives contracts saw a slightly higher rollover of 74 per cent. The market-wide rollover, however, was about 70 per cent, way below its performance in the earlier expiry.
Stocks to Watch
Realty stocks may rise on reports that the rate of interest on loans up to Rs.30 lakh would drop to 9.25% or lower very soon. Cement and construction stocks may be in focus on reports about removal of countervailing duty on cement.
Bharti Airtel could be in focus after it has announced a 26:74 joint venture with Alcatel-Lucent to manage Bharti's landline and broadband business. GMR Infrastructure may move on reports about its capital raising plans through the private equity route.
Wipro may see some buying following reports that it has bagged a Rs.2, 500 crore IT contract from Unitech Wireless. Dabur India could move after it has forayed into the fruit-flavored beverages segment.
Nestle may rise after it has reported a 23.2% rise in its net profit for the first quarter of the current year. Moser Baer and Educomp Solutions could also move after they have reported strong quarter results for the three months to March.
Punjab National Bank may see some activity after the bank slashed its benchmark lending rate by 50 basis points to 11% effective from May 1. According to reports, the bank is evaluating the options to dilute a 49% stake in its housing finance arm, PNB Housing Finance.
Maruti Suzuki, Hero Honda and Mahindra & Mahindra may rise after they have reported robust vehicle sales for the fifth successive month in April on the back of continued demand from small cities and rural markets amid the ongoing election fever.
DLF could be in focus after its board decided to transfer one of its non-core wind power business to a wholly owned subsidiary. Separately, DLF announced on Saturday the closure of its buyback program, two months ahead of schedule.
SpiceJet could be in focus amid reports that it will gradually replace around 55 foreign pilots with Indian talent, as their contracts end in June, October and December.
Suzlon Energy may be in focus after it has made the second tranche payment due to Martifer Group of Portugal for purchase of the 22.4% stake held by it in Germany-based REpower Systems for ?270 million.
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