RTTNews - Tuesday, the Indian market may open lower tracking the weak global cues after a worse-than-expected contraction in the regional manufacturing data and lower commodity prices pressured by a stronger dollar sent stock prices crashing down on Wall Street overnight and raised fresh concerns about the state of the global economy.
Additionally, net selling by foreign funds and fears that the forthcoming budget may fall short of market expectations could affect investor sentiment. Foreign institutional investors pulled out a net Rs.411.54 crore on Monday and domestic institutional investors sold shares worth Rs. 586.63 crore, provisional data released by the Bombay Stock Exchange showed.
However, there could be some stock-specific buying amid reports that several companies from Mumbai have reported a rise in tax payments for the April-June quarter. The overall tax payments were said to have grown by 10-20% over last year. SBI, ICICI Bank, LIC Housing Finance, Hindustan Unilever and Larsen & Toubro were among those reporting higher tax outgo.
Overnight, the major U.S. averages closed sharply lower, as traders did some profit taking following the recent rally, with some disappointing economic data raising concerns that stocks have come too far too fast in light of the near-term economic outlook. A report from the New York Federal Reserve showed that conditions for New York manufacturers have deteriorated at a faster pace in the month of June than in the previous month.
Additionally, a report released by the National Association of Home Builders showed a deterioration in homebuilder confidence in the month of June. The Dow Jones Industrial Average closed down 2.13%, the Nasdaq Composite index fell 2.28% and the S&P 500 index ended down 2.38%.
The Indian ADRs also ended mostly lower. Sterlite Industries plunged 9.99%, Satyam slumped 6.27%, HDFC Bank tumbled 4.48%, Infosys fell 4.31%, ICICI Bank eased 4.24%, Wipro declined 2.69% and MTNL ended down 2.42%, but Reddy's Laboratories edged up 0.88%
Crude oil futures fell nearly 2% to $70.62 a barrel in New York trading on Monday amid some profit taking and the strengthening of the dollar.
Meanwhile, the rupee fell 26 paise to Rs.47.87 against the dollar on Monday, weighed down by the surge of the U.S. dollar against the Asian currencies and fears about portfolio capital outflows.
On Monday, the Indian market reversed an early recovery and ended sharply lower, dragged down by market heavyweight Reliance Industries(RIL), which took a sharp 7.5% hit, after the Bombay High Court upheld the maintainability of RNRL's plea in a legal gas distribution dispute. Besides, profit taking after a 90% rally since early March and weak global cues also contributed to the weakness. While the BSE Sensex finished at 14,876, down 362 points or 2.38% from its previous close, the S&P CNX Nifty fell 99 points or 2.17% to 4,484 and the mid-cap and the small-cap indexes on the BSE fell over 2% each. The market breath on the BSE was extremely negative. Decliners led advancers by 1876 to 767 and 58 stocks closed unchanged.
Stocks to Watch
Metal stocks could see further profit taking following a notable pullback in commodity prices on the LME overnight.
TVS Motor will reportedly foray into the U. S.market by launching its premium 160cc bike Apache RTR this year.
Dr Reddy's Laboratories announced a strategic partnership with GlaxoSmithKline Plc (GSK) to develop and market select products across emerging markets outside India.
State-run oil-marketing companies HPCL, BPCL and IOC hiked jet fuel prices by over 12% to match a rise in global crude oil prices. While Jet Airways said that the hike was inevitable, Kingfisher Airlines said it was examining the impact of the latest hike and would take a decision shortly.
Ansal Properties and Infrastructure said that it would raise up to Rs. 1500 crore by way of qualified institutional placement (QIP).
The government won't meddle into the Satyam layoff plans, corporate affairs minister Salman Khursheed was reported to have said.
Reports suggest that Allahabad Bank is looking to raise Rs 1000 crore this year to support its growth plans. GAIL (India) plans to invest Rs 5558 crore in the current year, a major portion of which will be earmarked for the pipeline projects.
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