Market may drift lower on profit taking

The market may edge lower as investors may cash in on recent strong rally in share prices. Lower Asian markets may trigger price taking. Nevertheless, the market sentiment remains firm due to buying by foreign funds after heavy outflows in the first two months of calendar 2009. IT bellwether Infosys today announces Q4 March 2009 results and guidance for the year ending March 2010 (FY 2010).

Political uncertainty ahead of the parliamentary elections may cap near term upside. The month-long parliamentary elections begin on Thursday, 16 April 2009.

The market sentiment remains firm due to buying by foreign funds after heavy outflows in the first two months of calendar 2009. As per the provisional data released by the stock exchanges, foreign fund bought shares worth a net Rs 580.49 crore on Monday, 13 April 2009. The stock market was closed on Tuesday, 14 April 2009, for a public holiday. FII inflow totaled Rs 1678.10 crore in the first few days this month (till 9 April 2009).

Emerging-market equity funds carried into April 2009 their first-quarter momentum, taking in $2.2 billion in inflows on the week to 8 April 2009, fund tracker EPFR Global said on 10 April 2009. It was the fifth consecutive week of positive net inflows for emerging-market equity funds, EPFR said. "You have to think that all this liquidity being pumped in by central banks around the world is finally removing some of the shackles," EPFR Global's managing director Brad Durham said in a press release.

Emerging-market equity funds' $2.2 billion weekly inflow, or 0.9% of their total assets, brought year-to-date inflows to emerging-market stock funds to $5.4 billion, EPFR Global said.

Asia ex-Japan Equity Funds enjoyed another solid week, with an inflow of $794 million in the week ended 8 April 2009. It was the best week of inflows for Emerging Asia since April 2008. More than half of the $794 million of weekly inflows were received by China equity funds.

Signs of an improvement in the Indian economy and easing of the credit crisis triggered a solid rally on the Indian bourses in the past few days. The rally was also a part of a sharp surge in global equities triggered by hopes the worst of the global economic recession may be over. From a 3-year closing low of 8,160.40 on 9 March 2009, the Sensex jumped 2,806.82 points or 34.39% to 10,967.22 on 13 April 2009, its highest closing since 14 October 2008.

There are signs that the credit crisis is easing. Indian corporate bonds sales posted their best quarter on record as government-backed infrastructure and finance companies raised funds to bolster their capital. Indian companies raised Rs 37800 crore from bonds in the quarter ended March 2009, 44% more than in the same period a year earlier. State-owned lender India Infrastructure Finance Company raised Rs 7370 crore in the biggest bond sale of the quarter, followed by a Rs 3950-crore issue by the National Bank for Agriculture & Rural Development, known as Nabard. The credit offtake from the banking sector is also improving.

Asian stocks edged lower on Wednesday, 15 April 2009, as financial stocks gave back some recent gains and as a lack of clarity in Intel Corp.'s earnings outlook sent the technology sector down. Key benchmark indices in China, Hong Kong, Japan, South Korea, Singapore and Taiwan were down by 0.26% to 1.8%. But Jakarta Composite index in Indonesia was up 0.3%.

US retail sales in March 2009 ended two months of increases and sparked selling across the board on Wall Street on Tuesday, 14 April 2009, with the stocks of retailers, big manufacturers and energy companies among the casualties.

Goldman Sachs shares slid 11.6% to $115.11, a day after the company said it would raise $5 billion by issuing common stock and posted a stronger-than-expected quarterly profit. Equity offerings are traditionally a drag due to their dilutive effect. Further, there were concerns about the quality of Goldman's earnings.

After the market closed Intel said its first-quarter net income dropped 55% on lower sales and margins; while the world's largest computer-chip maker said there were some signs of a bottoming, its fairly hazy second quarter guidance unnerved markets. Its shares fell 5.1% after-hours trading.

In a major speech, US President Barack Obama said there were signs of recovery, but by no means are we out of the woods just yet.

Trading in US index futures showed the Dow could fall 49 points at the opening bell on Wednesday