Market may extend gains on firm Asian equities

The market may extend recent solid gains on positive cues from the global markets and sustained buying by foreign funds. But political uncertainty ahead of the parliamentary elections may cap near term upside. The month-long parliamentary elections begin today, 16 April 2009. The elections may result with no existing political alliance able to form a government, according to a Star News- Nielsen poll conducted from 26 March 2009 to 3 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 684.50 crore on Wednesday, 15 April 2009. FII inflow totaled Rs 2320 crore in the first few days this month (till 13 April 2009).

Asian stocks rose on growing optimism that stimulus efforts and record-low interest rates are easing the global recession. But China's Shanghai Composite index dropped 0.14% as a government report showed the Chinese economy grew at the slowest pace in almost 10 years.

China's Gross domestic product (GDP) expanded 6.1% in Q1 arch 2009, after expanding 6.8% in Q4 December 2008. Expectations were a for a 6% expansion in gross domestic product for the period

The Chinese government said Thursday that recent economic data showed positive changes with better performance than expected. A spokesman for the National Bureau of Statistics in a statement Thursday cited improvement in agriculture and a steady increase in industrial production, despite falling profits. However, the bureau also warned that problems remain, including a fall in demand for Chinese exports, reduced government revenue and increased difficulties on employment.

US stocks surged on Wednesday, 15 April 2009, after the Federal Reserve's Beige Book survey showed the US slowdown is moderating and after credit card provider American Express Co. said bad loans increased at a slower pace in March 2009.

Trading in US index futures showed the Dow could rise 15 points on Thursday, 16 April 2009.

Closer home, the Q4 March 2009 results will dictate the near-term trend on the bourses and investors will closely watch the future outlook provided by the company managements.