RTTNews - Friday, the Indian market is likely to open higher on strong global cues. Additionally, reports that monsoon rains have turned out to be above normal for the second consecutive week for the latest week to July 22 may improve investor sentiment.
Meanwhile, earnings from market heavyweight Reliance Industries due later in the day could influence trading for the day. Analysts expect the company to report a modest drop in its net profit on the back of a fall in refining margins and weak global demand for petroleum products.
Even as foreign institutional investors(FIIs) resumed their purchases, domestic institutions have been adopting a cautious stance after recent gains, data released by stock exchanges and SEBI showed.
On Thursday, while FIIs bought shares worth Rs 511.94 crore on a net basis, domestic institutional investors sold shares worth Rs.34.16 core, provisional data released by the BSE showed. Likewise, on Wednesday, net sales by mutual funds totaled Rs.284.90 crore, while FIIs bought shares worth Rs.145.50 crore, according to market regulator SEBI.
On Wall Street, stocks staged a substantial rally overnight, helped by an encouraging report on existing home sales and better-than-expected results from a few top firms including 3M, Ford and Wyeth. McDonald's, AT&T, Qualcomm also beat forecasts, although by more modest margins.
While data from the National Association of Realtors showed that existing home sales increased for the third consecutive month in June, a separate report from the Labor Department revealed that jobless claims rose by slightly less than economists had expected. The Dow Jones Industrial Average rose 2.12% to close above 9,000 for the first time since January and the S&P 500 index advanced 2.33%, while the Nasdaq Composite index added 2.45%, extending its winning streak for the twelfth straight session.
The Indian ADRs also ended sharply higher across the board. Satyam Computers surged up 11.61%, Sterlite Industries soared 6.93%, Infosys, ICICI Bank and MTNL rallied over 4% each, Reddy's Laboratories advanced 3.89%, Wipro gained 2.88% and HDFC Bank added 1.16%.
Crude oil futures for September delivery closed at a three week high of $67.16 a barrel, up $1.76 in New York trading on Thursday, boosted by a strong rally on Wall Street and encouraging earnings and economic data.
The rupee snapped a 2-day losing streak and ended higher at Rs.48.44/45, up 7.50 paise against the dollar on Thursday, helped by a weak dollar in the overseas markets and a sharp bounce-back in the domestic stock market.
On Thursday, the Indian market bounced back sharply after a 2-day loss, as impressive quarterly earnings from top bluechip companies and reports about likely upgrades in earnings across sectors for the rest of the year, more than offset concerns about a spike in valuations. An encouraging report on core sector output for June and favorable global cues also offered some support. The BSE Sensex opened higher at 15,009 and rose steadily to a high of 15,265 in late trading before finishing at 15,231, up 388 points or 2.61% from its previous close. Likewise, the S&P CNX Nifty climbed 125 points or 2.84% to 4,524 and the BSE small-cap and the mid-cap indexes ended up over 2% each.
Stocks to Watch
After the close of market hours on Thursday, ONGC reported a 27% year-over-year decline in its net profit for the first quarter ended June, which was slightly below market expectations.
Madras Cements reported a 21% year-over-year rise in its June-quarter net profit.
Idea Cellular announced a better-than-expected 13% rise in its consolidated net profit for the June quarter, helped by robust subscriber addition.
The mobile number portability will come into effect by the end of this year, telecom secretary Siddartha Behura said on Thursday on the sidelines of a conference.
Rating agency Crisil upgraded ratings on eight public sector banks citing likely funding support from the government after it has agreed to retain a majority stake in all state-run banks.
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