Stocks head towards a positive start

Headlines for the day:

ICICI Bank-Bank of Rajasthan swap ratio fixed at 1:4.72

Crash fallout: Aviation insurance rates harden

Godrej Consumer to buy Latin America's Issue Group

Events for the day:

Major corporate action

Ex-date for dividend of Goodyear India
Results: GMR Infra, Sun Pharma, Tata Power
For more events, log on to Sharekhan.com

Pre-market report

Global signals

A late rally for banks prevented European shares from closing at their lowest in more than eight months on Friday (May 21, 2010) as the euro zone sovereign debt crisis persisted, draining investor confidence worldwide.

The US stocks snapped a three-day losing streak on Friday as investors bought beaten-down shares including banks on bets the financial regulation bill won't be as onerous as some had feared.

In today's trade, the Asian markets were trading on a mixed note. At the time of writing this report, SGX Nifty was trading 57 points higher.

Indian Indices

India's billionaire Ambani brothers took a step towards reconciliation of their long-running feud on Sunday (May 23, 2010), ending non-compete agreements in a step they hoped would lead to cooperation between the two groups.

Both groups said they hoped to reach a conclusion soon in a gas supply agreement between Reliance Industries (RIL) and Anil's Reliance Natural Resources (RNRL) that had been at the heart of their dispute. A positive reaction (to the truce) is expected in the share prices of the companies belonging to the two groups.

Markets are expected to open on a positive note tracking firm cues from US stocks, but the gain is unlikely to sustain as investors are cautious and overseas fund houses are continuously pulling the money.

The Indian indices are expected to remain volatile this week ahead of derivative settlement on May 27, 2010 and on weak global sentiments, although the truce Greece crisis between the Ambani brothers may have overall positive fallout. RIL (Mukesh Ambani) and Anil Dhirubhai Ambani Group (ADAG, Anil Ambani) — are likely to spurt when the markets resume trade.

The earnings of GMR Infrastructure, Opto Circuits (India), Tata Chemicals, Tata Power and Sun Pharmaceutical Industries are later to be announced today — the stocks will be closely eyed. RIL and ADAG stocks will also be in focus.

Commodity cues

In the commodity space, the crude oil prices fell, as investors remained wary that Europe's debt crisis and growing oil stockpiles will cut demand for fuel, with the Nymex light crude oil for the June series declined by $0.76 per barrel, whereas in the metals space, the Comex Gold for the June series dipped by $12.10 and the Comex Silver for the June series was down by $0.06 to a troy ounce respectively.

Daily trend of FII/MF investment in equities

On May 21, 2010, the FIIs were the net sellers of the Indian stocks to the tune of Rs710.70 crore, whereas the domestic mutual funds, on May 19, 2010, were the net sellers of the stocks to the tune of Rs412.70 crore.