Market seen heading north on positive global cues

The market is expected to open on a firm note on positive global cues. Besides, the passing of the Finance Bill 2010 in the Lok Sabha on Thursday with some minor changes in tax proposals may boost sentiment as the government has pledged to cut the fiscal deficit. Trading in S&P CNX Nifty index futures on the Singapore stock exchange indicate that the Nifty could rise 26.50 points at the opening bell. Auto, cement, steel stocks will be in focus ahead of the release of April 2010 monthly sales data next week.

Finance Minister Pranab Mukherjee's budget 2010-11 proposals were passed on Thursday, 29 April 2010 with minor changes. The concessions will reduce the incidence of service tax on housing and air travel, incentivise construction of big hospitals, keep cancer and anti-AIDs drugs cheap and provide relief to debt-ridden coffee growers. However, the government held firm not to roll back the hike in prices of petrol and diesel. With the passage of the Bill by the Lok Sabha, the three-stage budgetary process stands completed.

Adani Power, Allahabad Bank, Amtek Auto, Bharat Electronics, Finolex Cables, Gateway Distriparks, HCL Infosystems, IDBI bank, IFCI, India Cements, Reliance Capital, Tech Mahindra, Titan Industries and Vijaya Bank will announce their January-March 2010 quarter earnings today, 30 April 2010.

Asian markets rose for the first time in four days as improving company earnings boosted speculation the global economy will sustain its recovery. Key benchmark indices in China, Hong Kong, Taiwan, Japan, South Korea, Singapore and Indonesia were up by between 0.40% to 1.09%.

US markets surged on Thursday, 29 April 2010, on waning fears over the euro zone debt crisis. The Dow Jones Industrial Average rose 122.05 points or 1.10% to 11,167.32. The Nasdaq composite gained 40.19 points or 1.63% to 2,511.92 and the Standard & Poor's 500 index was up 15.42 points or 1.29% to 1,206.78.

Back home, food price index rose 16.61% in the year to 17 April 2010, data released by the government on Thursday, 29 April 2010 showed. The rise in food prices inflation was slower than an annual rise of 17.65% in the previous week. But, fuel price inflation quickened. The fuel price index rose 12.69% in the year to 17 April 2010 a year ago, faster than the previous week's 12.45% rise. The primary articles index was up 13.55% in the year to 17 April 2010.

The Q4 March 2010 corporate earnings announced so far have been good. The combined net profit of a total of 586 companies rose 29.50% to Rs 31831 crore on 35% rise in sales to Rs 280051 crore in the quarter ended March 2010 over the quarter ended March 2009.

The government on Thursday, 29 April 2010, kicked off its disinvestment programme for the fiscal year March 2011 with the initial public offering (IPO) of the state-run SJVN. The government plans to raise Rs 1000 crore through the IPO, and is offloading 10% of its stake in the company. The IPO was subscribed 43% on day one.

The Congress-led United Progressive Alliance government sailed through a trial of strength in parliament on Tuesday, 27 April 2010, by winning the cut motion demanded by opposition parties against an unpopular hike in fuel and fertiliser prices with smaller parties giving it a leg up to achieve a surprisingly strong victory. However, major reforms may take a backseat for the some time to come as there is a stiff resistance by the opposition on fears it may hurt the poor.

On the macro front, the latest data showed infrastructure sector output jumped 7.2% in March 2010 from a year earlier, higher than an upwardly revised rise of 4.7% in February 2010.

The Indian Meteorological department (IMD) expects normal rainfall in the June-September monsoon season this year. Rainfall is likely to be 98% of the long-term average, the IMD said on 23 April 2010. Good monsoon rains would help raise farm output, boost rural incomes and lower food inflation. The south west monsoon 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. The quantum of rainfall in the crucial sowing month of July and distribution of rainfall during the monsoon season holds key.

The Reserve Bank of India expects India's economy to expand 8% in the year ending March 2011 (FY 2011) with an upward bias, assuming a normal monsoon this year and sustenance of good performance of the industrial and services sectors on the back of rising domestic and external demand.

The RBI at its annual policy review, last week, said it will continue to monitor macroeconomic conditions, particularly the price situation closely and take further action as warranted. A 25 basis points hike in the cash reserve ratio (CRR) with effective from 24 April 2010 will suck out excess liquidity of Rs 12500 crore from the banking system.

In its half-yearly World Economic Outlook, the International Monetary Fund (IMF) has pegged India's GDP growth at 8.75% in calendar 2010 and 8.5% in calendar 2011. According to the IMF, domestic demand in India will strengthen as the labour market improves, and investment is expected to be boosted by strong corporate profitability, rising business confidence and favourable financing conditions.

The key benchmark indices rebounded after a two-day slide on Thursday, 29 April 2010, tracking gains in European stocks and higher US index futures. The BSE 30-share Sensex rose 123.39 points or 0.71% to 17,503.47 and the S&P CNX Nifty gained 38.70 points or 0.74% to 5254.15.

As per provisional figures on NSE, foreign funds bought shares worth Rs 90.44 crore and domestic funds bought shares worth Rs 266.76 crore on Thursday, 29 April 2010.