Market may extend gains on positive global cues

The market is likely to extend gains for the third straight trading session supported by positive global cues. The S&P CNX Nifty futures for April 2010 expiry were up 15 points in Singapore.

Stock-specific action may rule the roost in the near term based on expectations of Q4 March 2010 results. IT bellwether Infosys kickstarts the reporting season on 13 April 2010.

Shares of export oriented companies may falter as the Indian rupee strengthened to a 19-month peak on Monday. The partially convertible rupee ended at 44.44/45 per dollar, more than 1% stronger than Wednesday's close at 44.89/90. It touched an intraday peak of 44.43, its strongest since 8 September 2008.

Steel stocks may be in demand on reports the recent price hike announced by steel producers is not the final one for April, as the industry is expecting another Rs 1,000-per tonne increase by the end of this month.

Shares of IT firm Persistent Systems (India) will debut on the bourses today, 6 April 2010. The company had priced its initial public offer at the upper end of the Rs 290 - 310 per share price band.

Most Asian stocks rose today as commodity prices gained and growth in US service industries and home sales spurred optimism about the global economic recovery. Key benchmark indices in China, Japan, Singapore and Taiwan were up by between 0.26% to 1.06%. However, South Korea's Seoul Composite was down marginally by 0.10%.

US markets ended higher on Monday, 5 April 2010, as they reacted to the non-farm payrolls report and other positive economic data. The Dow Jones and S&P closed at their highest level since September 2008, while Nasdaq closed at its highest level since August 2008. The Dow Jones industrial average climbed 46.48 points to 10,973.55. The Nasdaq composite index gained 26.95 points to 2,429.53 while the S&P 500 index moved 9.34 points higher to 1,187.44.

Emerging market equity funds ended March 2010 with their seventh consecutive week of inflows, bringing net inflows to nearly $7.6 billion in the first quarter. All four of the major fund groups took in modest amounts of fresh money, ranging from a net $6 million for Latin America Equity Funds to $222 million for EMEA Equity Funds. China equity funds, however, recorded inflows for only the third week so far this year as some investors continue to be put off by rich valuations, growing exchange rate and trade frictions with the United States and uncertainty about just how far authorities will go to prevent a property bubble.

The world economy could grow 4.1% this year, 0.2 points more than previously forecast, the International Monetary Fund (IMF) said in the latest draft of its World Economic Outlook. The US economy is now expected to grow 3% this year, instead of the 2.7% forecast in the IMF's January report. The IMF is due to publish its next World Economic Outlook on 21 April 2010.

According to the draft, euro zone growth this year is now forecast to be 0.8%, down 0.1 points from January's estimate. In 2011, the figure is seen at 1.5%, also down 0.1 points from a previous estimate, the report said.

Closer home, the stock market regulator Securities and Exchange Board of India (Sebi) on Monday notified amendments to the equity listing agreement, which were decided at its November 2009 board meeting. According to these amendments, all listed companies are required to disclose their audited annual results on a standalone as well as on a consolidated basis within 60 days from the end of the financial year. Earlier it was 90 days. This in effect, means all listed companies will have to submit the recently-concluded financial year's results by 31 May 2010 itself.

Listed companies have been further asked to publish the turnover, profit before tax and profit after tax on a stand-alone basis. These measures have been taken to streamline the submission of financial results by listed entities and uniformity in reporting, while reducing the timeline for submission of the same with the stock exchanges.

Top banking executives on Monday told the Reserve Bank of India (RBI) that credit growth will be over 20% in the year ending March 2011 (FY 2011) and that they don't expect interest rates to go up soon. They don't feel there is any upward pressure on interest rates. Some bank chiefs met RBI Governor D. Subbarao ahead of the annual monetary policy scheduled for 20 April 2010 to discuss on issues including outlook on credit, deposit growth, lending rates, economic growth and inflation.

Finance Minister Pranab Mukherjee recently said the economy would soon return to the 9% growth trajectory, helped by various measures announced in the Union Budget 2010-11. He said the economy would post 8.25-8.75% growth in the current fiscal after recording 7.2% growth in 2009-10, which is impressive by global standards.

Prime Minister Manmohan Singh recently said that the economy would get back to 9% growth by the end of the Eleventh Five Year Plan period, and do even better after that. After clocking 9% plus growth for three straight years till 2007-08, the country's GDP grew by a relatively modest rate of 6.7% in 2008-09 on account of the international financial crisis.

The food price index rose 16.35% in the year to 20 March 2010, higher than an annual rise of 16.22% in the previous week, government data showed on Thursday. The fuel price index rose 12.75%, higher than an annual rise of 12.68% in the previous week. Fuel costs have risen following a hike in domestic fuel prices and an upswing in world crude prices. The primary articles index was up 13.86% in the year to 20 March 2010.

India's manufacturing growth slowed down in March 2010, dropping from a 20-month-record in February 2010, as mounting cost pressures took a toll on expansion in output, a survey released on Thursday showed. The HSBC Markit Purchasing Managers' Index , based on a survey of 500 companies, fell to 57.8 in March 2010 from 58.5 in February 2010, which was the strongest since June 2008. A reading above 50 means activity is expanding. The new orders index fell to 62.7 in March from 64 in February

Industrial output in February is expected to have grown 16% year-on-year, Industry Secretary said on Wednesday. The output in January grew an annual 16.7%.

Foreign direct investment rose 15.4% to $1.72 billion in February 2010 over February 2009, government said Wednesday.

Exports in February grew 34.8% on year to $16.09 billion, Trade Minister Anand Sharma said on Wednesday. Exports are expected to grow 15-20% in the year that starts on 1 April 2010, Sharma said. Imports, too, maintained momentum growing by 66% to $25 billion underscoring the strong revival in the domestic economy.

The BSE Sensex vaulted 7,819.27 points or 80.5% in the year ended March 2010 (FY 2010) helped by heavy purchases by foreign institutional investors. As per data from the stock exchanges, foreign institutional investors (FIIs) bought stocks worth a net Rs 14,792.31 crore in March 2010. Indian companied raised over Rs 47,800 crore through public offers during the fiscal 2009-2010, following buoyant secondary market.

Global credit rating agency Standard & Poor's, last month, revised the outlook on India to stable from negative due to improved government finances.

The forecast for the southwest monsoon for 2010 is the next major trigger for the market. Good rains this year after last year's drought will boost farm output and rural incomes. But another monsoon failure will add to inflationary pressure which in turn may hamper the current strong economic rebound. The June-September monsoon season is important for India as about 60% of the country's farmlands are rain-fed and more than half of the workforce is employed in the agriculture sector.

Tokyo-based Research Institute for Global Change has predicted normal monsoon rains in India for the current year. Agriculture secretary P K Basu said in a media interview on Monday, 5 April 2010, that early signs indicate normal monsoon rains this year. The Indian Meteorological Department (IMD) issues a monsoon forecast, usually in the second half of April after considering weather observations in different parts of the world and extrapolating statistical data.

A weakening El Nino is a positive sign for the monsoon, Ajit Tyagi, director general at the India Meteorological Department, said on 18 March 2010. The cyclical heating of the Pacific Ocean known as El Nino will continue to fade, US forecasters said last month. The weather event, which occurs every four to seven years, brings more rain to South America and less precipitation to Asia.

The key benchmark indices attained their highest closing level in more than 25 months on Monday, 5 April 2010 aided by firm Asian stocks and higher US index futures. The BSE 30-share Sensex rose 243.06 points or 1.37% to 17,935.68, its highest closing since 19 February 2008. The S&P CNX Nifty rose 77.90 points or 1.47% to 5,368.40 its highest closing since 5 February 2008.

Foreign funds bought shares worth Rs 766.07 crore and domestic funds bought shares worth Rs 403.33 crore on Monday, 5 April 2010, as per provisional data.