RTTNews - The Indian market is likely to make a gap-up opening on Thursday, taking cues from Wall Street, where stocks moved up sharply overnight on encouraging earnings reports and economic data. The other Asian markets are also trading sharply higher across the board this morning.
While resumption of buying by FIIs in the past 2 sessions and speculation on disinvestment in PSUs are likely to add to the positive momentum, analysts caution that the current rally is purely driven by global cues without significant volumes in the cash market.
Finance Minister Pranab Mukherjee on Wednesday underscored the need to achieve high growth in the shortest possible time. Stimulus measures announced earlier have started yielding results and the government is betting on an economic revival for improving tax revenues, he said.
As per the Quarterly Investor Dashboard Sentiment survey by ING, Indian investors continue to be most optimistic on economic recovery and feel conditions would improve further in almost all the key performance indicators, including household financial situation, property prices and stock market. As much as 84% of the people surveyed expect the stock market to rise in the third quarter of 2009.
Overnight, the U.S. averages posted substantial gains, extending their gains for the third straight session after better-than expected results from Intel Corp. and Yum! Brands, and the Federal Reserve's announcement that it expects a less severe economic contraction in 2009 and a moderately stronger recovery in 2010 proved strong enough triggers for traders to stay bullish. The Dow Jones Industrial Average closed up 3.07%, the Nasdaq Composite climbed 3.51% and the S&P 500 index rose 2.96%.
The Indian ADRs also ended sharply higher, with the exception of Reddy's Laboratories. Wipro climbed 8.34%, Satyam Computers soared 7.16%, Sterlite and MTNL jumped over 6% each, ICICI Bank rallied 5.49% and HDFC Bank and Infosys rose over 3% each, but Reddy's edged down 0.44%.
Crude oil futures rose above $61 to settle up $2.02 or 3.39% in New York trading on Wednesday, boosted by a larger-than-expected decline in crude oil inventories last week, violence in Nigeria and a weaker dollar. Better than expected quarterly results and a smaller than expected decline in the industrial output for June also helped lift crude oil price. In Asian trading on Thursday, the commodity was last trading at $61.43, down 0.18%.
The rupee strengthened further by 33 paise to 48.63/64 against the dollar on Wednesday on hopes of improved portfolio inflows amid a rise in stocks and weakness in the dollar in overseas markets.
The Indian market finished Wednesday's session sharply higher for the 2nd day in a row, helped by encouraging corporate earnings from blue-chip companies, positive opening by the European markets and finance minister Pranab Mukherjee's pro-reform talk about disinvestment in PSUs and fiscal prudence. The BSE closed at 14,253, up nearly 400 points or 2.88% from its previous close, while the S&P CNX Nifty rose 122 points or 2.97% to 4,233 and the small-cap and mid-cap indexes on the BSE jumped over 4% each.
Stocks to Watch
CMC reported a 16% year-over-year rise in its June-quarter net profit. Drug maker Cipla's consolidated net profit rose 10% year-over-year for FY09.
Tata Communications has joined hands with Cisco to take wireless road in Gurgaon and thereby promote the digital lifestyle for consumers at home and on the go.
The committee of Core Projects & Technologies has approved the allotment of 9,85,276 equity shares of Rs 2 each on conversion of FCCBs.
Lupin's subsidiary Lupin Holdings B.V's holding in Generic Health Pty, Australia, has increased to 48.11% from 38.45% and Max Pharma Pty, Australia has ceased to a subsidiary of the company, Lupin said in a filing to the stock exchanges.
Tech Mahindra, announced that it was setting up a BPO facility at DLF IT Park in Rajarhat, Kolkata.
The Maharashtra Electricity Regulatory Commission (MERC) has stayed its own tariff order that allowed Reliance Infra to hike the electricity charges by seven percent for residential consumers from July.
State-owned telecom company MTNL on Wednesday invited bids from private players to run its fledgling third-generation (3G) mobile services in Delhi and Mumbai on a revenue-sharing basis.
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