RTTNews - The Indian market may extend its downturn on Tuesday on the back of extremely negative global cues amid renewed concerns about the global economy. That said, short covering ahead of derivatives contracts expiry on Thursday and support from domestic financial institutions may offer some support following recent losses.

While FIIs sold shares worth Rs.300.29 crore on Monday, domestic financial institutions bought shares worth Rs.413.74 crore, provisional data released by the BSE showed. According to market regulator SEBI, FIIs pulled out investments worth Rs.26.20 crore on Friday.

While market-men agree that stocks need further consolidation at current levels, analysts rule out a sharp correction before the forthcoming budget, as bears suffered bruising losses in the week, following the election results.

Currently, the major Asian markets are posting the strongest declines seen over the last few weeks. Commodity and energy stocks are bearing the brunt of the selling on doubts about a global economic recovery.

On Wall Street, stocks tumbled overnight after the World Bank cut its forecast for the global economy and warned of a large decline in international capital flows amidst the financial market fragility. Caution ahead of the release of key economic reports later this week also kept investor sentiment subdued. The Dow Jones Industrial Average fell 2.35 percent, the Nasdaq Composite shed 3.35 percent and the S&P 500 index lost 3.06 percent.

The Indian ADRs also ended mostly lower. Satyam Computers plunged 10.68%, HDFC Bank plummeted 7.04%, Sterlite Industries slumped 6.99%, Wipro tumbled 6.08%, ICICI Bank fell 5.46%, Infosys declined 2.99% and Reddy's Laboratories ended down 0.39%, but MTNL bucked the declining trend with a sharp 4.4% gain.

Crude oil price plunged to its lowest close in 19 days on Monday, as the World Bank's discouraging economic forecast led to worries over energy demand. Crude oil futures for July delivery expired on Monday, settling down $2.62 to $66.93 a barrel, dragged lower by the dollar's strength and Wall Street's weakness.

The rupee closed weaker at Rs.48.59/60 against the dollar on Monday, weighed down by the dollar's strength against the euro and continued profit taking in Indian equities.

On Monday, the Indian market wiped out its early gains and ended sharply lower, as profit taking continued amid concerns about stretched valuations and caution ahead of the forthcoming budget.

The BSE Sensex finished at 14,326, down 196 points or 1.35% from its previous close, the S&P CNX Nifty fell 78 points or 1.82% to 4,235, the broad-based BSE 500 index declined 1.24%, the mid-cap index moved down 0.57% and the small-cap index shed 0.33%. On the BSE, decliners outnumbered advancers by 1493 to 1114 and 68 stocks closed unchanged.

Stocks to Watch

Siemens' industry solutions division bagged a turnkey order worth Rs.112 crore from Vedanta Aluminum.

Oil-marketing companies like HPCL, BPCL and IOC could be in the spotlight on speculation the government would increase petrol price by Rs.2 a litre and diesel by Rs. 1.

ONGC has reportedly struck oil and gas at three places in Gujarat and has notified the new finds to director general of hydrocarbon for approval.

Union Bank of India announced a 25-basis-point reduction in its prime lending effective from July 1.

The managing director f Pyramid Saimira Theatre (PSTL), PS Saminathan and his wife were arrested on Sunday evening over a bounced- cheque complaint and later let off on bail. A misunderstanding on the terms of settlement with Indiabulls has been sorted out and both parties have agreed to an amicable settlement, the company said in a statement.

Unitech' promoters revoked over five crore shares pledged with lenders, representing 3.19% of the share capital of the company.

Bajaj Auto will launch its advanced version of popular model 'Pulsar' on Tuesday. BGR Energy Systems reported a 36% rise in its FY09 consolidated net profit.

Hindustan Lever intends to focus on its entire range of portfolio in the market place to boost volumes and market shares in price competitive segments, reports suggest.

Japan's automaker Nissan has reportedly invited Indian IT companies such as TCS, Wipro and Mahindra Satyam to bid for a $250 -million application development and maintenance contract.

Idea Cellular plans to raise Rs.6,000 crore through a mix of foreign currency and rupee debt to expand its roll-out in new circles, reports suggest.

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