(RTTNews) - Monday, the Indian market could open higher, tracking a mild recovery in the rest of the Asian markets on Monday. Higher US futures and Singapore Nifty could also perk up investor sentiment after last week’s historic sell-off. The Government’s assurances about the health of the Indian banking system and a 150 basis points cut announced by the RBI may add to positive sentiment. Additionally, short covering in index futures and select heavy weights could push indexes higher.

However, the market undertone remains bearish, weighed down by renewed selling by foreign funds and a lack of positive catalysts to trigger buying interest. Amid alternate bouts of buying and selling, trading could be volatile. Traders are likely to track global indexes for direction. Meanwhile, second quarter earnings from companies may also influence market movement. Capital goods, telecom and IT firms are expected to report decent growth rates, while auto and cement may witness pressure on margins.

Last week, the Indian market witnessed its biggest weekly fall since 1990, as renewed fears about the worsening financial crisis gripped global equities. Additionally, sustained selling by foreign funds, weak infrastructure and industrial output data for the month of August added to negative sentiment, even as coordinated efforts by the finance ministry, the central bank and the market regulator failed to soothe investor sentiment. The BSE Sensex ended at 10,528, down 1,998 points or 15.95%, while the S&P CNX Nifty finished at 3,280, down 538 points or 14.09%.

Friday, the US markets ended a volatile session mixed. Stocks witnessed steep losses in early trading following a gloomy outlook for the world economy and disappointing earnings from General Electric. However, selling pressure eased after analysts suggested that the markets were close to a bottom following the significant sell-off in recent sessions. The Dow Jones Industrial Average ended down 1.49% and the S&P 500 index shed 1.18%, while the Nasdaq Composite index ended up 0.27%.

Currently, markets across the Asia-Pacific region are trading mixed. Some markets in the region, including Australia, Hong Kong, Singapore and South Korea are trading higher, while China’s market is trading lower. Japan’s market is closed on account of a public holiday. Crude oil is trading at $80.35 a barrel, up 3.48% in Asian trading.

Stocks to Watch

Banking and stocks sensitive to interest rates may bounce back following a 150-basis cut in the cash reserve ratio by the RBI.

Select capital goods stocks and constructions stocks may see some buying after the US Secretary of State Condoleezza Rice and her Indian counterpart Pranab Mukherjee have signed an agreement to open up sales of civilian nuclear technology to India for the first time in three decades.

ICICI Bank could be in focus after the bank filed a complaint against some websites that were creating panic among depositors and shareholders by spreading rumors about the financial health of the bank.

Axis Bank, BASF India and Tata Investment Corporation could see some activity ahead of their earnings announcements for the second quarter on Monday.

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