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Indian market likely to open higher

(RTTNews) – Monday, considering the fact that the Indian market has grossly underperformed the developed stock markets last week, a technical bounce-back is likely on Monday amid value buying and short covering on hopes that the RBI could shift its focus back to growth from inflation during its policy review meeting due on October 4. Liquidity conditions in the money market have eased considerably and the government is reportedly planning more efforts to improve the situation further.

There is also a view that valuations in several index heavyweights have become attractive, and one could buy them to leverage growth opportunities in the different sectors of the economy. Despite the apprehensions, an analysis revealed that aggregate net sales of 175 companies has grown by a healthy 32% for the September quarter, while aggregate profit also grew a modest 12%. Several large companies are scheduled to announce their quarterly results this week.

This said, relentless selling by foreign funds and uncertain outlook for the global economy may weigh on sentiment. On a net basis, FIIs have sold shares worth Rs. 47,561 crore in the calendar year so far. Meanwhile, domestic financial institutions are reportedly sitting on cash to meet redemptions pressures. High net worth individuals are waiting for some kind of positive catalysts before deploying their money into the market.

Last week, after rallying in the first two days, the Indian market plunged during the rest of the sessions due to concerns about a gloomy outlook for the world economy. The confidence-boosting measures announced by the government and the regulators helped ease liquidity, but failed to enthuse investors Amid unabated selling by foreign funds, the key indexes ended the week at their lowest since June 2006. The BSE Sensex finished at 9,975, down 552 points or 5.25%, while the S&P CNX Nifty ended at 3,074, down 206 point or 6.26%.

Currently, markets across the Asia-Pacific region are trading mixed following value buying, even as concerns about a global recession haunted investors. Hong Kong’s Hang Seng index is up 2.76% and Japan’s Nikkei 225 index is gaining 0.53%, while China’s Shanghai Composite index is down 0.92%. Meanwhile, crude oil is trading at $73.01 a barrel, up 1.61% in Asian trading ahead of an expected supply cut at an emergency OPEC meeting this week.

Stocks to Watch

Infosys could be in focus on reports that the company has bagged an order from the Union Bank of California, US, for its core banking solution Finacle, beating another IT giant Tata Consultancy Services

NMDC may see some activity following reports that the company has increased domestic iron ore long-term contract prices by up to 46%. Meanwhile, steel makers like Ispat, Esar, JSW and RINL could come under selling pressure as iron ore is one of the major cost component of steel-making

Reliance Power could see some activity on reports that the company has tied up a $2-billion financial back-age for the Sasan power project from the domestic debt market.

Mount Everest Mineral Water may attract buyers after TREE Line Asia Master Fund (Singapore) has picked up close to 2.5 million shares, representing a nearly 8% stake for Rs.84.90 a share on October 15.

Akruti City, Canara Bank, Dunlop, GIC Housing Finance, Grindwell Norton, HT Media, IL&FS Invest, Indian Hotel, KCP, Lumax Auto, MIC Electronics, Mindtree Solutions, Patel Engineering, Petronet LNG, Rolta India, Sanghi Movers, State Bank of Mysore, Subros, Sundaram Clayton, Texmaco, Titan Industries and United Phosphorus could be in focus ahead of the release of their earnings reports for the September quarter.

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