Market may extend gains on FII buying, firm Asian equities

Resumption of buying by foreign funds and firm Asian stocks may help domestic bourses extend recent solid gains. Sings of an improvement in the Indian economy triggered a solid rally on the domestic bourses in the past few days. The rally was also a part of a solid 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 2,581.94 points or 31.63% to 10,742.34 on 8 April 2009, its highest closing since 15 October 2008

Foreign funds have resumed buying of Indian stocks. As the provisional data released by the stock exchange, foreign funds bought shares worth a net Rs 573.33 crore on Wednesday, 8 April 2009. Foreign funds bought shares worth Rs 1103.40 crore in three trading sessions from 1 April 2009 and 6 April 2009. The inflow followed heavy sales in the preceding three trading sessions. Foreign funds dumped stocks worth a net Rs 1266.70 crore in three trading sessions from 27 March 2009 to 31 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.

The government will release industrial production data for February 2009 today, 9 April 2009. Another data due today is likely to show that the inflation based on the wholesale price index (WPI) hovered near zero level in the year through 28 March 2009. The inflation data is due around noon.

Asian stocks rose on Thursday, 9 April 2009, on an unexpectedly positive core machinery orders reading in Japan and on overnight gains in US stocks. The Nikkei 225 average was up 2.2% as Japanese machinery orders unexpectedly rose for the first time in five months in February 2009, adding to signs that the recession may be easing.

Trading in US index futures showed the Dow could rise 47 points at the opening bell on Thursday, 9 April 2009.