Market may extend gains on firm global equities

The market may extend last two days' gains on firm global equities and data showing resumption of buying by foreign funds. However, investors may refrain from building large positions as the stock market remains closed on Friday, 3 April 2009, for a public holiday.

Shares of small-car major Maruti Suzuki will be in focus ahead of the release of figures of March 2009 sales. Cement firms will also be in the spotlight in the next day or two as they release monthly dispatches figures. A likely fall in inflation to a near zero level will reinforce expectations of a further fall in the monetary policy by the Reserve Bank of India (RBI).

Traders and operators who had closed positions at the year-end will 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. The BSE Sensex rose nearly 2% on the first day of the new financial year FY 2010 on Wednesday 1 April 2009.

As per the provisional data foreign funds bought shares worth a net Rs 173.75 crore on Wednesday. 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.

Inflation based on the wholesale price index (WPI) is expected to stay near zero level in the year through 21 March 2009. WPI inflation had hit a record low of 0.27% in the year through 14 March 2009. The government will release the inflation data around midday on Thursday, 2 April 2009.

Asian stocks surged on Thursday, led by automakers and banks, after US car sales beat estimates and US Treasury Secretary Timothy Geithner said global economies are showing traction amid widening stimulus efforts.

Trading in US futures showed the Dow could rise 99 points at the opening bell on Thursday, 2 April 2009.