Firm global cues may trigger positive start; inflation data, Adani Power listing eyed

Market is likely to start on a firm note supported by positive global cues. The SGX Nifty futures for August 2009 expiry jumped 43 points in Singapore. However, scanty rains, crucial for India's domestic demand driven economy and continued fall in exports may cap gains. Investors will keenly watch data on the wholesale price index (WPI) for 12 months to 8 August 2009 which will be announced by the government today, 20 August 2009. Also the listing of Adani Power will be closely watched.

Most Asian markets were trading higher today, 20 August 2009 after crude oil prices rallied and positive cues from Wall Street. Key benchmark indices in China, Honk Kong, Singapore, Japan and South Korea were up by between 0.60% and 2.10%. However Taiwan's Taiwan Weighted index slipped 1.52%.

US markets recovered from intra-day lows and ended higher on Wednesday, 19 August 2009 after a surprise drop in crude inventories, which sent oil prices and energy stocks soaring. The Dow Jones industrials gained 61.22 points, or 0.7%, to 9,279.16. The S&P 500 index rose 6.79 points, or 0.7%, to 996.46, while the Nasdaq Composite Index added 13.32 points, or 0.7%, to 1,969.24.

Back home, the action is likely to shift to primary market in the near futures as the government reportedly plans to sell stakes in at least six to seven more state-run firms in the next 12-14 months after a strong response to the initial public offering of NHPC recently. The government's budget for 2009/10 included plans to raise Rs 1120 crore ($230 million) from initial public offers of unlisted firms including Railways subsidiary RITES, Cochin Shipyard, Telecommunications Consultants India and Manganese Ore India. Firms including Oil India, Coal India, NMDC, NTPC, BHEL, Rural Electrification Corp and Shipping Corp of India are also candidates for stake sales.

Meanwhile the Adani Power will debut on the stock exchanges today, 20 August 2009. The company's initial public offering (IPO) raised nearly Rs 3,000 crore through the issue and the IPO price is fixed at the upper band of Rs 100 per share. The issue which closed on 31 July 2009, was oversubscribed 22 times. The listing is important as it will set the tone for other companies looking to raise funds through IPO

Weak monsoon rains have pushed India to the brink of drought, putting pressure on food prices and energy supplies and imperilling growth. Monsoon was 56% below normal in week to 12 August 2009 and was 72% below normal in the soyabean growing central region in past one week, India Meteorological Department (IMD) said on 13 August 2009. Monsoon rains were 29% below normal during the period from 1 June 2009 to 12 August 2009.

India's merchandise exports fell for the 10th straight month in July, but its balance-of-trade account improved as imports declined at a faster pace, Commerce Secretary Rahul Khullar said at a workshop on agricultural exports on Tuesday, 18 August 2009. The country's merchandise exports fell 26% from a year earlier in July as the economic crisis continued to hurt global demand, while the value of imports shrank 35%-36% he said.

As per the provisional figures on NSE, foreign funds sold shares worth Rs 622.06 crore and domestic funds bought shares worth Rs 83.77 crore on Wednesday, 19 August 2009.