Market may edge higher; upside capped

The market may extend gains on mostly higher Asian stocks, hops of a recovery of the global economy
and on buying by foreign funds. The latest data is expected to a show a further fall in inflation which will keep rate cut expectations intact. However, concerns about the slowing Indian economy and lower US index futures may cap the upside.

Asian shares were mostly higher with financial stocks getting a lift from the Federal Reserve's plan to buy longer-dated US Treasurys. However, exporters hurt by stronger currencies. The Fed said it would buy $300 billion in longer-dated Treasurys over the next six months, along with another $850 billion in mortgage-related debt, in a bid to improve credit markets and pull the US economy out of its hole. The Fed kept the benchmark interest rates unchanged at between zero and 0.25%.

There was some positive news after-hours in the US, too, with Oracle Corp rising 7.4%. Its fiscal third-quarter net income eased 0.8% but it said it would pay its first-ever dividend. Yet, trading in US index futures indicated that the Dow could slide 54 points at the opening bell on Thursday, 19 March 2009.

Closer home, the government will today release the inflation data for the year through 7 March 2009. As per the market buzz, inflation based on the wholesale price index could fall to a record low for the current series at below 1%.

However, Indian commercial banks have become more averse to extending loans, further throttling the economic growth.