Market may open higher on positive Asia

The key benchmark indices may open higher on positive Asia. However, the derivatives expiry on Thursday, 24 September 2009, may keep key benchmarks choppy in the near term. The market remained shut on Monday, 21 September 2009, on account of Ramzan Id. The next major trigger for the market is Q2 September 2009 results next month.

Asian stocks rose today for the first time in three days after Citigroup Inc. raised Samsung Electronics Co.'s price estimate and Morgan Stanley lifted its rating on companies that make automobile batteries. The key benchmark indices in South Korea, Singapore, Taiwan and Hong Kong rose by between 0.02% to 1.29%. The key benchmark indices in China and Japan fell by between 0.23% to 0.7%.

The US stocks ended mostly lower on Monday, 21 September 2009 as the dollar gained strength, dragging commodity and other stocks. The Dow was down 41.34 points, or 0.4%, to 9,778.86. The S&P 500 index fell 3.64 points, or 0.3%, to 1,064.66, while Nasdaq Composite index rose 5.18 points, or 0.2%, to 2,138.04.

In economic data, leading indicators rose 0.6% in August 2009, the fifth straight monthly gain and highest reading since January 2008. This came after a revised 0.9% gain in July and was slightly lower than the 0.7% uptick economists had expected.

The US Federal Reserve will meet on 22 and 23 September 2009. At the Federal Open Market Committee's meeting, the policy makers will assess the early signs of improvement now taking shape across the economy

Back home, after a strong revival since 15 August 2009, rains weakened again last week. The South West monsoon rains were 41% below average in the week to 16 September 2009, the government-run India Meteorological Department (IMD) said last week. Total rainfall since 1 June 2009, the start of the season, was 21% below average because of exceptionally dry spells earlier in the season, IMD said. More than two-thirds of the people live in villages and 60% of the farm land depends on the annual rains.

Data released by the government on Thursday 17 September 2009 showed the headline inflation entered the positive territory after a gap of 13 weeks. Inflation based on the wholesale price index rose 0.12% in the year through 5 September 2009 compared to previous week's annual decline of 0.12%. A surge in food price index was responsible for the rise in the headline inflation.

Meanwhile, market expectations of strong Q2 results were tempered after a news agency quoted an unnamed government official as saying on Thursday that the government expects only a marginal improvement in corporate advance tax in second quarter. Media reports had on Wednesday, 16 September 2009, indicated a surge in advance payment by top Indian firms that raised expectations of strong Q2 September 2009 results.

As per reports, State Bank of India, India's biggest commercial bank by branch network, has paid Rs 1838 crore in advance tax in the second installment as against Rs 1500 crore paid last year. HDFC Bank paid Rs 425 crore advance tax against Rs 315 crore last year. But, ICICI Bank paid lower tax of Rs 501 crore against Rs 575 crore last year.

Larsen & Toubro paid Rs 210 crore as against Rs 150 crore last year. Reliance Industries paid Rs 1157 crore in advance tax against Rs 683 crore paid in last year. But, Tata Steel paid a sharply lower advance tax of Rs 400 crore Rs 1000 crore paid in last year.

Software major TCS has reportedly paid Rs 220 crore as against Rs 81 crore. Tractor major Mahindra & Mahindra paid Rs 112 crore as against Rs 17.5- crore. Tata Motors paid advance tax of Rs 130 crore in the second installment, much higher than Rs 60 crore last year. Tata Power Company paid Rs 75 crore as against Rs 14 crore in last year.

The key benchmark indices posted small gains in choppy trade on Friday 18 September 2009 as a recovery in European stocks triggered intraday rebound on the domestic bourses. The market extended gains for the fourth day in a row. The BSE 30-share Sensex rose 30.19 points or 0.18% to 16,741.30, its highest closing since 22 May 2008 on that day.

As per provisional figures on NSE, foreign funds bought shares worth Rs 1486.08 crore and domestic funds sold shares worth Rs 505.38 crore on Friday, 18 September 2009.