(RTTNews) - Friday, the Indian market is expected to rebound following the tamer-than-expected wholesale inflation data released by the government after close of the market on Thursday. It may be too early to assume that the inflationary pressures are slowing, but the latest reporting week’s data could certainly boost investor sentiment in the market.

Meanwhile, positive sentiment in the rest of the global markets and some easing in the price of oil could trigger some buying interest in the morning session. Traders are likely to await the GDP report, which will be released by the government around noon today. The GDP report, the movement of oil price and cues from the European markets are likely to determine the market movement in the afternoon.

The rate of inflation for the week ended August 16 posted a surprise decline to 12.40% compared to the 13% forecast by analysts. The absolute level of the wholesale price index (WPI) also declined marginally, after rising for 27 weeks. The WPI declined from 240.7 in the week ended August 9 to 240.2 in the week ended August 16. The decline in the inflation rate was largely on account of the drop in global crude prices and a marginal easing in the prices of essentials such as fruits, vegetables, eggs, meat and fish.

The Indian market plunged on Thursday following intense selling in bank stocks and Reliance Industries in late trading. Traders remained cautious ahead of the release of key economic data. The BSE Sensex finished at 14,048, down 248 points or 1.74% over Wednesday’s close and the S&P CNX Nifty settled at 4,214, down 78 points or 1.82%.
On the BSE, stocks across sectors ended in the red. Oil/gas, capital goods, public sector and metal companies were among the major losers. The market breadth was extremely negative, with only 898 stocks gaining compared to 1721 stocks that declined.

Overnight, the US markets rose sharply after the U.S. government reported robust growth in the US economy in the second quarter. Additionally, a retreat in the price of oil sparked a rally in major industrial and financial companies. The Nasdaq Composite ended up 1.22%, the Dow Jones Industrial Average rose 1.85% and the S&P 500 index added 1.48%.

Indian ADRs finished mixed. Sterlite Industries ended flat, Infosys rose 0.56%, ICICI Bank soared 2.8%, HDFC Bank added 2.47%, and Satyam ended up 0.37%. Meanwhile, MTNL declined 2.3% followed by Reddys Laboratories and Wipro, which fell 1.47% and 0.09% respectively.

Currently, markets across the Asia-Pacific are posting sharp gains tracking gains in the US stocks overnight.

After finishing at $115.59 a barrel, down $2.56 in New York trading, crude oil is currently trading at $116.71 a barrel, up 0.97%. The price of crude oil eased on Thursday as the US government and the International Energy Agency pledged to release emergency stockpiles if Tropical Storm Gustav disrupts US oil supplies.

The rupee weakened on Thursday as a rise in oil prices sparked dollar buying by refiners, while the losses were limited amid hopes that the RBI could intervene in the market to strengthen the rupee. The rupee ended at 43.78/79, 0.15% weaker than the previous day’s close.

Stock views

Stocks sensitive to interest rates such as banking, real estate, auto and capital goods may attract fresh buying. Cement companies could come under selling pressure following reports of softening in prices due to excess supplies and faltering demand for cement. Textile companies may come under selling pressure following the proposed hike in cotton support prices by the government.

ICICI Bank may be in focus after the bank’s public face Kalpana Morparia announced to quit the bank to join JP Morgan India. CDMA telecom companies such as Reliance communication and Tata Teleservices may see some activity after the Telecom minister A Raja asked the companies to bid for 3G spectrums.

Reliance Industries and NTPC could see some activity following reports that Samajwadi Party leader Amar Singh has asked the Committee on Public Undertakings to summon the officials of the petroleum ministry, power ministry and NTPC to probe the ‘inaction’ of the public sector unit in pursuing the litigation over supply of gas from the KG basin by Reliance industries. Videocon group companies may be in focus following news reports that the promoter family is mulling a trust structure to consolidate its holdings in the group companies.

Gitanjali Gems could see some activity over reports that the company has opted to pull out of the race to buy US-based jewellerey retail Chaiang White hall, due to difference on prices. Tata Motors could remain in focus following reports that the work at its plant in Singur is disrupted as workers couldn’t turn up for duty following threatening by the activists from the Trinamool Congress party

Nectar Lifesciences may attract some buying after its board of directors approved a stock-split proposal and the issue of convertible warrants to a select companies on a preferential basis.

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Posted in Categories: Eurozone, Releases, Stocks, USA.

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