RTTNews - The Indian market may open lower on Friday after U.S. stocks fell for a second day overnight on concerns the recent rally outpaced the economy's prospects. Asian stocks are also trading mostly lower this morning due to caution ahead of the release of a crucial U.S. employment report due later in the day.
However, following a sharp 2.5% loss in the previous session, lower levels could attract fund buying. While foreign institutional investors (FIIs) sold shares worth Rs. 371.41 crore on a net basis on Thursday, net purchases by domestic institutional investors totaled Rs.257.40 crore, provisional data released by the BSE showed. On Wednesday, net sales by FIIs and domestic institutions totaled Rs.480.40 crore and Rs.209.80 crore, respectively, according to market regulator SEBI.
Analysts say that the market is clearly in a consolidation mode and it is too early to take a call on the monsoon and its impact on the country's GDP growth. Further profit taking is not ruled out and at the same time there is more FII money waiting to be deployed in Indian equities
The initial public offer of NHPC, a mini-ratna category-I public sector undertaking and hydroelectric power generating company, will open for subscription today to raise around Rs.6,000 crore by pricing shares at a band of Rs.30-36 per share. Positive news flow, if any from this issue could influence market movement.
On Wall Street, stocks surrendered early gains and posted moderate losses overnight, as traders did some profit taking ahead of the key employment data on tap for Friday. Though there were some encouraging signs on the jobless claims front, sales figures from major retailers were somewhat disappointing. The Dow Jones Industrial Average closed down 0.27%, the Nasdaq Composite eased 1% and the S&P 500 index drifted down 0.56%.
The Indian ADRs closed sharply lower across the board. Satyam Computers slumped 6.05%, Sterlite Industries shed 5.11%, Reddy's Laboratories tumbled 3.76%, HDFC Bank eased 2.67%, Infosys moved down 2.14%, MTNL declined 2.12%, ICICI Bank edged down 1.7% and Wipro slipped 0.85%.
Crude oil prices finished modestly lower at $71.94 a barrel, down 3 cents or 0.04% in New York trading on Thursday, weighed down by a further decline on Wall Street and the strengthening of the dollar. In Asian trading on Friday, the commodity fell further to $71.62 a barrel.
Amid thin trading due to a two-day ongoing nationwide strike by state-owned bank employees, the Indian rupee drifted down 15 paise to Rs.47.69 against the dollar on Thursday on concerns about foreign fund portfolio outflows following a steep fall in the benchmark Sensex.
On Thursday, across-the-board selling in the last hour pulled down the Indian market sharply lower, as concerns about liquidity ahead of the opening of state-run NHPC's Rs.6,000-crore IPO on Friday and reports about monsoon deficiency weighed on sentiment.
The BSE Sensex which rose to the day's high of 15,970 in the mid-session tumbled to 15,443 before finishing at 15,514, down 390 points or 2.45% from its previous close, while the S&P CNX Nifty fell 109 points or 2.31% to 4,585.On the BSE, losers outnumbered gainers by 1607 to 1084, with auto, realty, FMCG and metal stocks bearing the brunt of selling pressure.
Stocks to Watch
Select textile stocks such as Arvind, Alok Industries and Welspun India may extend their rally after the government promised to release Rs.2,546 crore under the Technology Upgradation Fund Scheme within 3 days to meet requirement of all applicants, who applied under the scheme up to June 30.
Tata Power has lined up a capex of Rs.23,600 crore for the next three years, its chairman Ratan Tata said at the company's annual general meeting on Thursday.
FMCG major Marico said on Thursday that its Bangladesh-based subsidiary would raise another 148.5 million taka (about Rs 10 crore) through its ongoing initial public offer (IPO) in the local market, after the Bangladeshi markets regulator approved doubling the size of its IPO to 10 percent of equity, because of higher demand.
Tata Steel is looking to save 1 billion pounds at its European operations in 2009-10 by pursuing its cost-cutting programmes, reports quoted the company's managing director Muthuraman as saying.
DHFL Venture Capital Pvt., a subsidiary of Dewan Housing Finance Corp. is about to start a PE fund with equal participation by joining hands with U.S.-based Redwood Capital Partners Llc, reports suggest.
Debt-ridden Wockhardt said that it has received shareholder nod for disposing off its animal healthcare business to France-based Vetoquinol SA.
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