Market seen opening firm in volatile trade

Key benchmark indices are seen opening slightly higher mirroring mixed global cues. The SGX Nifty futures for May 2009 expiry rose 11 points in Singapore. However profit booking after the recent rally cannot be ruled out.

Volatility may swell as political uncertainty, with polling for India's 15th Lok Sabha underway. 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.

Asia-Pacific stocks were slightly higher ahead of US bank stress-test results on Thursday, 7 May 2009. Key benchmark indices in China, Hong Kong, Singapore, Taiwan, rose by between 0.39% and 2.79%. South Korea's Seoul Composite index fell 0.29%.

US stocks edged lower on Tuesday, 5 May 2009 as cautious investors were worried about bank stress test results and energy shares succumbed to the pressure of lower oil prices. The Dow Jones Industrial Average fell 16.09 points, or 0.19%, to 8,410.65. The Standard & Poor's 500 Index lost 3.44 points, or 0.38 per cent, to 903.80 and the Nasdaq Composite index dropped 9.44 points, or 0.54%, to 1,754.12.

Meanwhile, US Federal Reserve Chairman Ben Bernanke told the US Congress Joint Economic Committee yesterday, 5 May 2009 that the US economy is on track for a recovery, but it will be slow. He said unemployment will continue to rise as businesses remain cautious about hiring.

Back home, the two key benchmark indices - the BSE Sensex and the S&P CNX Nifty saw divergent trend with the Sensex falling marginally and the S&P CNX Nifty rising slightly in what was a highly choppy trading session on Tuesday, 5 May 2009. The BSE 30-share Sensex ended marginally lower by 3.67 points, or 0.34%, to 12,092.96. The S&P CNX Nifty rose 7.90 points, or 0.22%, to 3,661.90, its highest closing since 3 October 2008.

Recovery 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 sharp 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 3974.35 points or 48.70% to 12134.75 on 4 May 2009.

As per the provisional figures on the NSE, foreign institutional investors (FIIs) bought shares worth Rs 508.51 crore on Tuesday, 5 May 2009 while domestic institutional investors sold shares worth Rs 129.85 crore.