RTTNews - Tuesday, the Indian market is likely to open flat with a positive bias on the back of strong global cues. However, a sharp drop in turnover to about Rs.73,000 crore in the previous session and muted institutional buying suggest some profit taking in large caps.
Trading is likely to remain range bound on alternate bouts of buying and selling, though second-line stocks may attract brisk buying. Provisional data released by the BSE showed that FIIs net inflow was nearly Rs 350 crore on Monday, while domestic financial institutions bought shares worth Rs 61 crore on a net basis.
Currently, the markets across the Asia-Pacific region, except China and Malaysia, are trading up modestly, as positive economic data and earnings reinforced hopes for a swift economic recovery.
The major U.S. averages rose sharply on Monday, buoyed by reassuring economic data and firm commodity prices. A report from the Institute for Supply Management showed a much slower than expected pace of contraction in manufacturing activity in July and significant improvements in new orders and production.
Separately, data from the U.S. Commerce Department revealed that construction spending rose 0.3% percent in June following a revised 0.8% slide in May, surprising economists who had expected a decline of 0.5% for the month. The Dow Jones Industrial Average closed up 1.25%, the Nasdaq Composite rose 1.52% and the S&P 500 index advanced 1.53%.
The Indian ADRs also ended sharply higher across the board. Sterlite Industries soared 8.23%, Satyam Computers jumped 7.14%, ICICI Bank climbed 5.9%, MTNL and Wipro rallied more than 4% each, HDFC Bank advanced 3.44%, Infosys rose 3.14% and Reddy's Laboratories ended up 2.27%.
Crude oil continued its upward surge on Monday, as encouraging economic data improved the prospect of energy demand. Light sweet crude for September delivery rallied to a high of $72.10 before finishing at $71.58, up $2.13 in New York trading on Monday. In Asian trading on Tuesday, crude oil futures drifted slightly lower towards $71 a barrel ahead of industry data later in the day from the American Petroleum Institute that is expected to show a rise in U.S. crude inventories.
The rupee rose to its highest in nearly two months at 47.64 against the dollar on Monday, about 0.6 percent stronger from its previous close, encouraged by a weak dollar and a rally in the domestic stock market.
Meanwhile, shrugging off weak June export data, the Indian market rose sharply to a 14-month high on Monday, boosted by strong global cues and consistent buying by foreign funds. Auto stocks led the market higher after reporting robust sales in July, followed by realty, metal, power and oil/gas stocks,while consumer durable and defensive FMCG stocks ended in the red on concerns about rural demand due to the slow progress of monsoon rains. The BSE Sensex closed at 15,924, up 254 points or 1.62% from its previous close and the S&P CNX Nifty rose 75 points or 1.62% to 4,711. Second-line indexes also ended sharply higher.
Stocks to Watch
Dish TV India received shareholder nod to raise $200 million by issuing any security convertible into equity shares.
Bharti Airtel may see some selling amid speculation that it could sweeten the offer for a cross border deal further to get MTN shareholders on its side.
Godrej Consumer Products has earmarked up to Rs 1,000-crore for acquisitions in emerging markets like Asia, Africa and Latin America and domestic market, reports suggest.
Tata Motors car sales grew 21% for July compared to the year-ago month.
HCL Technologies plans to convert the remaining part of a £400-million bridge loan into long-term debt, reports suggest.
Rolta India announced a lower net profit of Rs 76 crore for the fourth quarter ended June versus Rs 133 crore in the previous quarter.
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