Indian market likely to open lower, Singapore Nifty down 3.0%

(RTTNews) - Monday, the Indian market could open sharply lower amid a lack of positive catalysts and due to weak sentiment prevailing in the rest of the Asian markets after the US stocks declined sharply on Friday. Traders may track global indexes for market direction. Meanwhile, select index heavyweights could be in focus, as there are apprehensions that earnings growth of companies could be affected due to a rise in interest rates, the slackening of consumer demand and forex losses due to mark-to-market provisioning.

Although, the $700-billion financial bailout plan was approved last weekend, investors are still skeptical about the effectiveness of the plan. On Friday, the US markets declined notably over concerns about a recession in US following the release of a report that showed worse-than-expected job losses in September. Investors are likely to exercise caution ahead of the release of the minutes of the September 16th FOMC meeting on Tuesday.

After the close of the market on Friday, wholesale inflation data released by the government indicated a further softening in the rise of wholesale prices, as the barometer rose less than 12% for the week ended September 20. This said, the inflation rate is significantly above the annual target rate of the RBI.

Reports said that domestic financial institutions are sitting on cash to an extent of around 15% of their total assets under management. These funds, especially insurance funds are expected to lend support to market at lower levels.

Last week, the Indian market tumbled following weak sentiment across the world over concerns about the future of the US economy. The BSE Sensex ended at 123,526, down l 576 points or 4.40%, while the S&P 500 index finished at 3,818, down 167 points or 4.18%. The Indian ADRs shed close to $10 billion last week, with Infosys Technologies witnessing the maximum erosion of about two billion dollars.

Markets across the Asia-Pacific region are currently trading sharply lower following negative cues from the US markets over the weekend. Hong Kong’s Hang Seng index is slipping 2.96%, Japan’s Nikkei 225 index is declining 3.60% and China’s Shanghai Composite index is down 3.46%.

Crude oil is trading at $92.10 a barrel, down 1.90% in Asian trading on Monday, weighed down by concerns over demand for oil, as investors believe that the bailout package will further drag on US growth.

Stocks to Watch

Oil marketing companies could attract some buying following a softening trend in crude oil prices over the past few sessions. D-Link India could be in focus after the company’s board of directors approved a proposal to restructure the company’s businesses.

Tata Motors Ltd may see some activity after the company officially announced that it would relocate Nano Project away from Singur. Consolidated Construction could see some buying after a consortium led by the company bagged new orders worth Rs.1, 212 crore from the Chennai Airport Authority of India.

Centum Electronics may be in focus after the company bagged new orders worth Rs.4.3 crore from a Defence Sector Unit for the supply of sub-systems. AVT Natural is likely to move after the company said it has commissioned a 600- KW Windmill at Elavanti near Coimbatore, Tamil Nadu.

For comments and feedback: contact editorial@rttnews.com

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