Market may edge higher; upside capped

The market may edge higher on the first trading session of the new financial year FY 2010, tracking gains in Asian stocks
. But heavy selling by foreign funds after huge purchases in the past few days, lower US index futures and political uncertainty ahead of parliamentary elections may cap the upside. Traders and operators who had closed positions at the year-end may start building fresh positions from the beginning of the new financial year. Some traders who don't want to show positions on their balance sheet typically unwind positions before the year-end.

Auto and cement shares will in the spotlight in the next 2-3 days as firms release sales/dispatches figures for March 2009.

There will be absence of support from mutual funds. Mutual funds had supported the market last month to prop-up their net assets value for the year ended 31 March 2009 (FY 2009) which ended on Tuesday. Domestic institutional investors which includes mutual funds and insurance firms had mopped up stocks worth a massive Rs 1039.07 crore on Tuesday, 31 March 2009, as per the provisional data released by the stock exchanges. Mutual funds bought shares worth a net Rs 849.90 crore in the month of March 2009, till 30 March 2009.

As per the provisional data released by the stock exchanges, foreign funds sold shares worth a net Rs 583.65 crore on Tuesday, 31 March 2009. Foreign funds dumped stocks worth a net Rs 735.30 crore in two trading sessions from 27 March 2009 to 30 March 2009. Before the selling, foreign institutional investors had mopped up stocks worth Rs 3635 crore in a short span from 17 March 2009 to 26 March 2009.

Asian stocks were in green on Wednesday, 1 April 2009. Key benchmark indices in Hong Kong, Japan, China, South Korea, Singapore, Indonesia and Taiwan were up by between 0.14% to 2.1%. Markets were also looking ahead to the G20 leaders' summit in London on Thursday, 2 April 2009, even though expectations were low for any concrete new steps to support global growth.

But trading in US index futures showed, the Dow could fall 75 points at the opening bell on Wednesday, 1 April 2009, on continued concerns about the fate of large US automakers General Motors and Chrysler.

Indian bonds and currency markets are shut on Wednesday as banks
close their accounts for the financial year that ended on Tuesday.