Market may open higher on positive Asian stocks; industrial production data eyed

The market may open higher on positive Asian stocks. Trading in S&P CNX Nifty index futures on the Singapore stock exchange indicate that the Nifty could gain 15 points at the opening bell. Closer home, the government will announce the industrial output data for the month of March 2010 today, 12 May 2010. Industrial output rose by lower than expected 15.1% February 2010 and also lower than 16.7% rise in January 2010.

Asian stocks rose on Wednesday led by carmakers and gold producers, after Toyota Motor Corp. and Isuzu Motors forecast higher earnings and bullion advanced to a record. The key benchmark indices in China, Hong Kong, Indonesia, Japan, South Korea and Taiwan rose by between 0.04% to 1.23%. But, Singapore's Straits Times fell 0.14%.

Meanwhile, South Korea's central bank left its policy interest rate unchanged Wednesday at a record-low 2%, as expected, and said it foresees continued growth in the nation's economy but also warned of uncertainty due to sovereign-debt concerns in Europe.

US stocks declined in a volatile session on Tuesday as fears that a $1 trillion bailout for Europe won't solve the region's deep-seated problems blunted an improving US economic picture. The Dow Jones Industrial Average dropped 36.88 points, or 0.34% to 10,748.26. The Standard & Poor's 500 Index fell 3.94 points, or 0.34% to 1,155.79. But, the Nasdaq Composite Index gained 0.64 points, or 0.03% to 2,375.31.

Back home, the fourth quarter corporate results announced so far have been fairly encouraging. The combined net profit of a total of 1487 companies rose 36.2% to Rs 45462 crore on 29.1% rise in sales to Rs 419714 crore in the quarter ended March 2010 over the quarter ended March 2009.

Bajaj Auto, Bajaj Holdings & Investment, Blue Star, DB Realty, Dewan Housing, Glodyne Technologies, Hathway Cables, Mahindra Forging, Mangalore Refineries, Rohit Ferro, RPG Life, Thermax, Welspun India among others will announce their January-March 2010 quarter results today.

Larsen & Toubro will be in focus after company's water technology business unit won an order worth Rs 850 crore in Doha, Qatar for advanced waste water treatment and urban reuse.

On the macro front, business at Indian service companies rebounded to a 21-month-high in April 2010 on new business and high input prices. The HSBC Markit Business Activity Index, based on a survey of 400 firms, rose to 62.1 in April, its highest since July 2008, and compared with 58.1 in March 2010.

On Friday, 14 May 2010, the government will unveil data on inflation based on the wholesale prices for the month of April 2010. The headline inflation was 9.9% in March 2010. The RBI has forecast the headline inflation to ease to 5.5% at end-March 2011 on expectations of a normal monsoon.

Inflation based on food prices rose 16.04% in the year through 24 April 2010, slower than previous week's annual rise of 16.61%. Fuel prices inflation remained at elevated level. The fuel price index rose 12.69% in the year through 24 April 2010, same as a week ago. The primary articles index rose 13.93% in the year through 24 April 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.

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 edged lower in choppy trade on Tuesday, 11 May 2010 as world stocks retreated after Monday (10 May 2010)'s solid surge amid uncertainty over euro-zone countries' ability to reduce their deficits. The BSE 30-share Sensex fell 189.02 points or 1.09% to 17,141.53 on Tuesday.

As per provisional figures on NSE, foreign funds bought shares worth Rs 20.19 crore and domestic funds bought shares worth Rs 22.49 crore on Tuesday.