The market may extend Wednesday (2 June 2010)'s 1% gains on strong
global cues. Trading in S&P CNX Nifty index futures on the
Singapore stock exchange indicated that the Nifty could rise 53 points
at the opening bell. The government will unveil data on some wholesale
price indices for the year through 22 May 2010 viz. the food price
index, the primary articles index and the fuel price index at about
12:00 IST today.
In a stock specific news, India's largest power
producer by sales NTPC, is reportedly set to acquire controlling
interest in a 720-million-tonne coal field in Australia in a deal
valued at $1-1.5 billion, which will enable it to fire about 3,500
megawatts (mw) of power capacity.
Asian stock markets chalked up
healthy gains on Thursday, following a rally on Wall Street which saw
the Dow surge more than 200 points on Wednesday. The key benchmark
indices in Hong Kong, Indonesia, Japan, South Korea, Singapore and
Taiwan rose by between 1.31% to 2.63%. But, China's Shanghai Composite
fell 0.11%.
US stocks rallied on Wednesday as investors rushed
back into beaten-down shares, led by energy, which bore the brunt of
the sell-off a day earlier. The Dow Jones Industrial Average gained
225.52 points, or 2.25% to 10,249.54. The Standard & Poor's 500
Index rose 27.67 points, or 2.58% to 1,098.38. The Nasdaq Composite
Index climbed 58.74 points or 2.64% to 2,281.07.
Investors also
were encouraged by data showing pending sales of previously owned homes
increased to a six-month high in April 2010.
Back home, Prime
Minister Manmohan Singh highlighted 12 major areas of his intended
priority on Tuesday, 1 June 2010, while releasing the first anniversary
report of the UPA-II government at a function in New Delhi. These
include relations with neighbours, economic resurgence, internal
security, education, health, child rights, food security, empowerment
of women, weaker sections and minorities and rural renewal. He added
that the economy is expected to grow at 8.5% in the current financial
year ending March 2011.
The Prime Minister identified price
rise as one of the major problems faced by his government but assured
to monitor the situation and take necessary corrective measures to rein
in inflation. Singh said India must withdraw fiscal stimulus to boost
economic growth and reduce deficit in a calibrated manner.
The
Reserve Bank of India on Tuesday said inflation remained higher than
its comfort level, signalling that the bank could raise interest rates
further.
HSBC Markit Purchasing Managers' Index (PMI), based on
a survey of 500 Indian firms, surged to a 27-month high of 59 in May
2010 from 57.2 in April 2010, bolstered by steady growth in output, new
orders and employment. The rate of growth had slowed in March 2010 and
April 2010.
India's economy grew at 8.6% in the March 2010
quarter driven by robust manufacturing sector on the back of government
and consumer spending, data released by the government on Monday, 31
May 2010, showed. The growth was significantly higher than the revised
6.5% expansion in Q3 December 2009 and a 5.8% growth in Q4 March 2009.
The manufacturing sector grew 16.3%, farm output rose 0.7%, mining
sector expanded 14% and services increased by 8.4% in January-March
2010 quarter from a year earlier.
For the full year to March
2010, the economy expanded 7.4%, above a government forecast of 7.2%.
Economic growth had slowed down to 6.7% in year ended March 2009.
The
RBI expects India's economy to expand 8% in the year ending March 2011
(FY 2011) with an upward bias, assuming a normal monsoon this year and
sustenance of good performance of the industrial and services sectors
on the back of rising domestic and external demand. The RBI at its
annual policy review on 20 April 2010 said it will continue to monitor
macroeconomic conditions, particularly the price situation closely and
take further action as warranted.
China, India, Brazil and
Russia are powering ahead, the Organisation for Economic Cooperation
and Development (OECD) said on 26 May 2010, revising upwards its growth
outlook for all four largest emerging economies. The OECD revised
India's GDP growth forecast for 2010 to 8.2% from its earlier estimate
of 7.3%. It also raised the growth forecast for 2011 to 8.5% from its
earlier estimate of 7.6%. The OECD also said that underlying
inflationary pressures are likely to persist given the strong outlook
for demand.
In its World Economic Outlook in April 2010, the
International Monetary Fund (IMF) pegged India's GDP growth forecast at
8.75% in calendar 2010 and 8.5% in calendar 2011. IMF's optimism was
based on expectations of strengthening of domestic demand as the labour
market improves. Expectations of increase in investment on the back of
strong corporate profitability, rising business confidence and
favourable financing conditions, were other factors cited by IMF for
its prediction of strong growth in India's economy.
Meanwhile,
a revenue bounty for the government from the sale of telecom spectrum
would help bring down fiscal deficit in the current financial year.
The
advance of the south west monsoon rains has been temporarily halted by
a cyclonic depression in the Arabian Sea. Monsoon has covered Kerala
and Tamil Nadu, but not moved beyond due to a cyclonic depression,
according to agency reports. The weather office expects monsoon rains
to advance to Karnataka later this weekend, by when the cyclone would
weaken. The June-September monsoon rains hit Kerala on 31 May 2010, a
day ahead of schedule. The south-west monsoon usually covers the entire
country by mid-July.
The weather office late April 2010 said
rainfall is likely to be 98% of the long-term average. Good monsoon
rains would help raise farm output, boost rural incomes and lower food
inflation.
Last month, Australia's weather bureau said the El
Nino weather pattern was over. El Nino is caused by an abnormal warming
of the eastern Pacific Ocean and can play havoc with weather patterns
across the Asia-Pacific region.
The south west monsoon is
important for India as about 60% of the country's farmlands are
rain-fed and more than half of the workforce is employed in the
agriculture sector. The quantum of rainfall in the crucial sowing month
of July and distribution of rainfall during the monsoon season also
holds key.
On the corporate front, the combined net profit of
a total of 3,454 companies rose 14.20% to Rs 87,247 crore on 24.70%
rise in sales to Rs 9,26,193 crore in the quarter ended March 2010 over
the quarter ended March 2009.
Healthy auto and cement sales in
May 2010 and buzz of strategic stake sale in Reliance Communications
(RCom) helped domestic bourses shrug off weak global stocks on
Wednesday, 2 June 2010. The BSE 30-share Sensex rose 169.81 points or
1.02% to 16,741.84 on Wednesday.
As per provisional figures on
NSE, foreign funds sold shares worth Rs 166.50 crore and domestic funds
bought shares worth Rs 165.16 crore on Wednesday.
Foreign funds
sold shares worth a net Rs 692.99 crore in the first two trading
sessions this month, as per data from the stock exchanges. Domestic
funds have bought stocks worth a net Rs 375.78 crore in the first two
days this month.
Source :- indiainfoline.com