Market seen higher; volatility may zoom F&O expiry

Key benchmark indices are seen opening strong on the back of positive Asian indices. The SGX Nifty futures for April 2009 expiry surged 52.50 points in Singapore. However volatility may hit roof with derivatives contracts for April 2009 series expiring today, 29 April 2009.

Aggregate results of 475 firms showed 3.6% fall in net profit on 4.5% rise in sales in Q4 March 2009 over Q4 March 2008.

Expiry of derivatives contracts today, 29 April 2009 may heighten volatility on the bourses. As per reports, rollover of Nifty positions from April 2009 series to May 2009 series stood at 61% while those of stock futures were 54%, as on Tuesday, 28 April 2009.

Political uncertainty, with polling for India's 15th Lok Sabha underway, may also prop volatility. The month-long parliamentary elections that began on 16 April 2009 will conclude on 13 May 2009 with results due on 16 May 2009. Poll estimates point to a fractured mandate.

Meanwhile, turnover on the bourses may take a hit with traders refraining to take freh positions ahead of a long weekend. The stock market will remain shut on Thursday, 30 April 2009 as voting takes place in Mumbai for the parliamentary elections and also on Friday, 1 May 2009 on account of Maharashtra Day.

Asian indices were trading higher today, 29 April 2009 on encouraging earnings declaration from corporates and after South Korea's central bank reported a widening of the nation's current-account surplus. Key benchmark indices in China, Hong Kong, Singapore, Taiwan, South Korea, rose by between 0.65% and 2.34%. The Japanese markets are shut for a holiday

US stocks fell modestly on Tuesday, 28 April 2009 as fresh worries that major banks may need to raise more money overshadowed IBM's dividend boost and reassuring economic data that suggested the economic cycle may be at its bottom. The Dow Jones Industrial Average shed 8.05 points, or 0.10%, to 8,016.95, the Standard & Poor's 500 Index dropped 2.35 points, or 0.27%, to 855.16. The Nasdaq Composite index fell 5.60 points, or 0.33%, to 1,673.81.

Back home, Indian stocks joined global sell off on Tuesday, 28 April 2009 after the Wall Street Journal reported Bank of America Corp. and Citigroup Inc. were told by US regulators that they need more capital. The BSE 30-share Sensex lost 370.10 points or 3.25% to 11,001.75 and the S&P CNX Nifty slipped 107.65 points or 3.1% to 3,362.35.

As per the provisional figures on the NSE, foreign institutional investors (FIIs) sold shares worth Rs 256.85 crore on Tuesday, 28 April 2009 while domestic institutional investors sold shares worth Rs 202.15 crore.