Indian market likely to extend gains, Singapore Nifty up 4.10%
Tuesday, the Indian market is likely to consolidate its gains following spectacular gains in the US markets overnight and positive sentiment prevailing in the rest of the Asian Markets. After days of brutal hammering, the Indian stock market surged on Monday, led by strong buying across the board and hectic short covering. On a net basis, provisional data showed that foreign funds sold Rs.1, 060 crore worth of shares on Monday, while domestic funds pumped in Rs.582 crore.
The market in all likelihood could open sharply higher, though trading is likely to remain volatile amid a lack of support from foreign funds. Earnings announcements from companies for the second quarter and global cues may also impact market movement.
The Indian market surged up amid buying across the board all through the day on Monday, helped by a revival in sentiment in the rest of the global markets and a positive talk by the Indian finance minister ahead of the opening bell on the stock exchanges. The BSE Sensex ended near the day’s high at 11,336, up 809 points or 7.68% and the S&P CNX Nifty finished at 3,491, up 211 points or 6.43%. Stocks across the board attracted good buying support. The banking index climbed 12.51%, the capital goods index surged up10.36%, and the consumer durables index soared 10.26%, while the power and the realty indexes added around 9% each. On the BSE, the market breadth was positive, with 1687 stocks gaining compared to 926 stocks that declined.
Overnight, the US markets staged a substantial rebound on bargain hunting, after the latest round of government measures to stem the credit crisis instilled confidence among investors. The Dow Jones Industrial Average posted its biggest one-day point gain on record, surging up 936 points or 11.08%, the Nasdaq Composite index jumped 195 points or 11.81% and the S&P 500 index ended up 104 points or 11.58%.
Meanwhile the Indian ADRs soared on Monday. Wipro (up 39.67%), ICICI Bank (up 29.96%), Infosys (up 23.42%), HDFC Bank (up 19.13%), Sterlite Industries (up 18.09%) and Satyam Computers (up 17.18%) were some of the notable gainers.
Currently, markets across the Asia-Pacific region are trading sharply higher, tracking spectacular gains in the US markets overnight following coordinated efforts by the governments and the central banks across the world to avert a deepening of the financial turmoil. Led by Britain, European governments agreed to multibillion-dollar guarantees for the banking system, while the U.S. Federal Reserve, the European Central Bank, the Bank of England and the Swiss National Bank also said they would lend commercial banks as much U.S. dollar liquidity as they needed to ease clogged inter-bank lending rates. Hong Kong’s Hang Seng index is up 3.55%, China’s Shanghai Composite index is gaining 1.19% and Japan’s Nikkei 225 index is spurting 13.08%. The Japanese market was closed on Monday on account of a public holiday.
After ending at $81.19 a barrel, up $3.49 in New York trading on Monday, crude oil is currently trading firm at $83.33 a barrel, up 2.64% in Asian trading following a rally in global equities after government and central banks launched bailout schemes to avert a liquidity crisis.
The rupee settled at 48.25/27, up 0.3% against the dollar on Monday, tracking the huge gains in the stock market after the government reassured investors that it was working to shield India from the global crisis. Additionally, dollar selling by foreign banks, largely custodian banks, eased concerns about foreign fund outflows.
Stocks to Watch
IT stocks could be in demand following spectacular gains in their ADRs overnight. Banking stocks also could attract buying on the easing of liquidity conditions in the call-money market.
Airline stocks could see some activity on reports that Jet Airways and Kingfisher Airlines are discussing synergies to shore up their revenues and cut costs. Telecom stocks could extend their gains on reports that a new wave of telecom operators from emerging markets in Asia is venturing into the Indian market.
Pyramid Samira Theatre could extend its gains after P S Saminathan, co-promoter of the company has decided to acquire around 25% stake in the company from the other two promoters at a price of Rs.200 per share.
Tata Motors could see some activity on reports that the company has lined up new launches to rev up a sluggish sales growth. IFCI, NDTV and Novopan Industries could be in focus ahead of the announcement of their second quarter results on Tuesday.
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