Market may open higher on gains in Asian stocks

The market may open higher on positive cues from the Asian markets. The market sentiment remains firm due to sustained buying by foreign funds. However, political uncertainty may cause volatility on the bourses in the next few days.

Speculation that the Bharatiya Janata Party (BJP)-led National Democratic Alliance (NDA) is gaining momentum in the ongoing parliamentary elections triggered a solid surge on the domestic bourses on Tuesday, 12 May 2009. The BSE 30-share Sensex jumped 475.04 points or 4.07% to 12,158.03, its highest closing since 3 October 2008.

Before Tuesday's rebound, fears of a fractured mandate from the parliamentary polls had triggered a 3.58% fall in the BSE Sensex in two trading sessions to 11,682.99 on 8 May 2009 from 12,116.94 on 7 May 2009. Today is the last day of the month-long parliamentary elections that began on 16 April 2009. Exit polls will be announced after the last round of voting ends on Wednesday and the election results are due on Saturday, 16 May 2009. A party/alliance needs 272 seats in the 543-member parliament to claim power at the Centre.

Heavy buying by foreign funds has bolstered sentiment on the stock markets. Foreign funds are aggressively buying Indian stocks. As per the provisional figures on NSE, foreign funds bought shares worth Rs 452.18 crore on Tuesday, 12 May 2009. FII inflow in May 2009 totaled Rs 4,692.70 crore (till 11 May 2009). FII inflow in calendar year 2009 totaled Rs 5,405.50 crore (till 11 May 2009).

Most Asian stocks rose today 13 May 2009 on signs the global economic slowdown may be fading, with Nissan Motor powering ahead in Tokyo on hopes for an earnings turnaround. Key benchmark indices in China, Japan, South Korea, Singapore and Taiwan rose by between 0.01% to 0.96%. But Hong Kong's Hang Seng was down 0.02%.

China's industrial production grew at a lower-than-expected rate of 7.3% in April 2009 as electricity output fell and exports tumbled. But retail sales climbed. Industrial production had risen 8.3% in March 2009.

Profit taking pulled US stocks lower for most of the session on Tuesday 12 May 2009. But markets picked up in the second half and finished mixed despite a lack of positive catalysts. Consumer and health care stocks rose, though weakness in technology and banks prevented larger gains. The Dow gained 50.34 points, or 0.6%, to 8,469.11. The S&P 500 index slipped 0.89 points, or 0.1%, to 908.35 and the Nasdaq fell 15.32 points, or 0.9%, to 1,715.92.

Back home, India's industrial output fell a steeper-than-expected 2.3% in March 2009 over March 2008, its third fall in four months government data showed on Tuesday. The manufacturing segment shrank by 3.3%. Mining rose by a modest 0.4% and electricity output climbed by a decent 6.3%. However, data showing a strong growth in consumer durables production in March 2009 reinforced expectations of a recovery of the economy. Production of consumer durables jumped 8.3% in March 2009 as compared to a 2% decline in March 2008.

The industrial production figure for February 2009 was revised to a 0.7% drop from a preliminary estimate of a 1.2% decline.

Meanwhile, initial estimates showed that India's exports dropped 33% to $10.7 billion in April 2009. Imports fell a sharper 35% to $16 billion in April 2009 on the back of low oil prices
, falling exports and a deceleration in manufacturing activity and investment.

Indian market has risen sharply in the past two months on 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 3,997.63 points or 48.98% to 12,158.03 on Tuesday, 12 May 2009.