Recovery to continue on firm Asian markets

The market may edge higher with Asia-Pacific markets extending Tuesday’s rebound and on expectations that FIIs may resume buying after their recent heavy sales.

Key benchmark indices in Hong Kong, Singapore, Australia, Taiwan, South Korea and China were up by 0.3% to 1.6% on Wednesday. But Japan’s Nikkei 225 average slipped into the red after a firm start. It was down 0.4%. Asian markets had risen 1% to 2% on Tuesday (5 March) as investors resorted to bargain hunting after a steep fall.

US stocks too extended their recovery on Tuesday. The Dow Jones industrial average rose 157.18 points, or 1.30 percent, to 12,207.59. The Standard & Poor's 500 index gained 21.29 points, or 1.55 percent, to 1,395.41. The Nasdaq composite index led the rebound on Wall Street, climbing 44.46 points, or 1.90 percent, at 2,385.14. Stocks shrugged off US data showing a big drop in pending US home sales and a decline in factory orders.

Equities across the globe had declined sharply over the past few days due to worries pertaining to the US economy, volatile markets in China, and more frequently, the unwinding of yen carry trades, or when investors borrow the yen to take advantage of low interest rates in Japan, and then invest in higher-yielding assets. The key data this week is the US non-farm payroll for February 2007 due on Friday (9 March).

As per provisional data, FIIs were net sellers to the tune of Rs 489.57 crore on Tuesday, the day when Sensex had surged 282 points. FIIs were net sellers to the tune of Rs 312.70 crore on Monday (5 March 2007), the day when the Sensex had tumbled 471 points. FIIs were net buyers to the tune of Rs 324.90 crore on Friday (2 March 2007), the day when the Sensex had lost 273 points.

FIIs were net buyers to the tune of Rs 1338 crore in index based futures on Tuesday. They were net buyers to the tune of Rs 245 crore in individual stock futures on that day.

Mutual funds were net buyers to the tune of Rs 192 crore on Monday, the day when Sensex had tumbled 471 points in a sell-off in Asian markets.

Key Indian ADRs surged on Tuesday. Infy ADR rose 4.3% to $53.67, Satyam Computer ADR surged 5.6% to $21.90, Wipro ADR rose 5.7% to $15.66, HDFC Bank ADR gained 6.1% to $64.90 and ICICI Bank ADR advanced 4.1% to $39.43.

NYMEX crude was steady, just below $61 a barrel after an overnight climb