Market may extend gains

The market may extend last two days' gains on higher Asian shares and on expectations of economic recovery. Decent to strong growth in cement dispatches of top cement firms in January 2009 and record monthly by Maruti Suzuki, India's biggest small car maker by market share, in the month just gone by has raised hopes of an economic recovery as rural demand remains strong. The government will unveil the weekly inflation data today, 5 February 2009.

The BSE Sensex rose 135.15 points or 1.49% to 9,201.85 on 4 February 2009 from 9,066.70 on 2 February 2009.

But the market sentiment remains edgy due to selling by foreign funds. However, the outflow of foreign institutional investors (FIIs) was a miniscule 27.08 crore on Wednesday, 4 February 2009, as per the provisional data released by the stock exchanges after trading hours. Foreign funds have sold shares worth Rs 4435 crore in calendar year 2009 so far (till 3 February 2009).

Domestic funds have absorbed selling by foreign funds. Domestic funds provisionally bought shares worth a net Rs 284 crore on Wednesday. In calendar 2009, domestic funds have bought shares worth a net Rs 3,832.90 crore, as per BSE data.

Asian stocks gained on Thursday, led by mining and shipping companies, on speculation stimulus in China will boost demand for metals and transport services. Key benchmark indices in Hong Kong, China, Singapore, South Korea and Taiwan were up by between 0.06% to 2.74%.