RTTNews - The Indian market is poised to open sharply higher on Thursday after recovering remarkably from the day's lows in the previous session following robust factory output data.

The June IIP report, which far surpassed the market consensus, suggested that recovery in the economy is well underway and raised hopes that strong manufacturing growth may more than offset the impact of weak monsoon, which hitherto was a concern for investors.

Globally, economic data from the U.S., China, South Korea and Malaysia suggested that the worst of the global recession could be behind us.

In a significant development that could receive investor attention today, finance minister Pranab Mukherjee unveiled on Wednesday, a new direct tax code which aims at eliminating distortions in the tax structure, introducing moderate levels of taxation and expanding the tax base.

The tax code which is expected to become a law from 2011, proposes moderate income tax rates on corporate and individual incomes, suggests abolition of securities transaction tax and aims at raising the tax deduction applicable on savings to Rs. 3 lakh.

The tax code, which will replace the the four-decade Income Tax Act, contains many other proposals for making life easier. After reasonable level of discussions on the proposals, a bill is expected to be introduced in the Parliament during the winter session.

Meanwhile, strong global cues may also help lift market sentiment. Overnight, the major U.S. averages
rose over 1% each after the U.S. Federal Reserve said it saw signs of the recession-mired U.S. economy stabilizing.

Currently, the markets across the Asia-Pacific region are trading mostly higher on the back of strong cues from Wall Street.

Foreign institutional investors who have been net sellers in the past few sessions turned buyers by purchasing stocks worth Rs.704.20 crore on Tuesday, data released by market regulator SEBI revealed.

In corporate news, Larsen & Toubro on Wednesday signed a Rs 4,000-crore agreement to supply power equipment to Jaiprakash Power Ventures, a unit of Jaiprakash Associates.

Tata Chemicals said that it will buy a 35.8% stake in Rallis India from other promoter firms at a price not exceeding Rs.850 per share. Currently Tata Group holds a 9.4% stake in Rallis.

Surya Roshni intends to double sales of its lighting division from the present over Rs.500 crore in the next one year, reports suggest.

Public sector companies may rise as NHPC's $1.25-billion initial public offer (IPO), which closed for subscription on Wednesday, was subscribed more than 23 times.

On Wednesday, the Indian market ended off the day's lows, helped by better-than-expected factory output report. The benchmark Sensex which fell by 374 points or 2.48% to 14,701 in the afternoon because of brisk selling by foreign funds, monsoon worries and weak global cues, ended at 15,020, down 54 points or a modest 0.36% from its previous close. Likewise, the S&P CNX Nifty recouped most of its early loss before finishing at 4,458, down 14 points or 0.31%.. Realty stocks led the intra-day recovery followed by healthcare, auto and consumer durable stocks, while IT and metal stocks ended deep in the red.

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