Market may open higher on positive global cues

Higher Asian stocks may help domestic bourses recoup part of Monday's near 1% slide. Trading in S&P CNX Nifty index futures on the Singapore stock exchange indicate that the Nifty could rise 17.50 points at the opening bell. Most Asian stock markets were higher Tuesday after Wall Street's solid rise on Monday. The key benchmark indices in Hong Kong, Indonesia, Taiwan and South Korea rose by between 0.3% to 0.78%. But, Singapore's Straits Times fell 0.42%. Markets in Japan were closed for a public holiday.

In China, the Shanghai Composite fell 0.69% as the market reacted increase to banks' reserve requirement ratios announced over the weekend. The Chinese markets were closed on Monday, 3 May 2010, for the May Day holiday.

US stocks staged a broad rally on Monday after manufacturing, consumer spending and construction data instilled confidence that the economic recovery is gaining traction. The Dow Jones Industrial Average rose 143.22 points, or 1.30% to 11,151.83. The Standard & Poor's 500 Index gained 15.57 points, or 1.31% to 1,202.26. The Nasdaq Composite Index added 37.55 points, or 1.53% to 2,498.74.

Closer home, the fourth quarter corporate results announced so far have been fairly encouraging. The combined net profit of a total of 988 companies rose 27.9% to Rs 37385 crore on 30.7% rise in sales to Rs 346089 crore in the quarter ended March 2010 over the quarter ended March 2009. Jindal Steel & Power, TTK Prestige, Syndicate Bank, Religare Technova, Orient Paper, HMT, Dwarikesh Sugar among others will announce their January-March 2010 quarter result today.

On a consolidated basis, Idea Cellular's net profit jumped 56.7% to Rs 266.60 crore in Q4 March 2010 over Q3 December 2009. The company announced the result after market hours on Monday, 3 May 2010.

A recent industry body report showed that business confidence in India improved on the back of economic recovery. The bi-annual Business Outlook Survey of the Confederation of Indian Industry (CII) showed that the Business Confidence Index (BCI) of the Indian industry increased by 1.5 points for the April-September 2010 period, compared to the past six months.

However, on the flip side, as per another survey a drop in new orders and output has resulted in the country's manufacturing expanding at a slower pace for the second month in a row. The HSBC Markit Purchasing Managers' Index, based on a survey of 500 companies, fell to 57.2 in April 2010 from 57.8 in March 2010. A figure of 50 separates contraction from expansion.

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 on 20 April 2010 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 ended a choppy trading session lower, halting a two-day advance on Monday, 3 May 2010, as weak global stocks weighed on investors' sentiment. The BSE 30-share Sensex fell 172.63 points or 0.98% to 17,386.08 on Monday.

As per provisional figures on NSE, foreign funds sold shares worth Rs 387.05 crore and domestic funds also sold shares worth Rs 107.01 crore on Monday.