Market may edge higher on positive economic data in China, Japan

The market may edge higher, tracking firm Asian stocks, which rose after positive economic data in the major Asian economies viz. China and Japan. Trading of S&P CNX Nifty futures on the Singapore stock exchange indicate that the Nifty could gain 15 points at the opening bell.



However, the volatility may remain high as traders roll over positions in the derivatives segment, from the near-month September 2010 series, to October 2010 series, ahead of the expiry of the near-month September 2010 derivatives contracts on Thursday, 30 September 2010.

Asian stocks hit a two-year high after poor US data reinforced expectations the US Federal Reserve will take more action to help the struggling US economy. The key benchmark indices in China, Hong Kong, Indonesia, Singapore, Taiwan and South Korea rose by between 0.26% to 1.06%.

Japanese shares rose 0.63% on Wednesday, boosted by a better-than-expected result from the central bank's quarterly business-sentiment survey.

Manufacturing accelerated in China for a second straight month in September 2010, adding to signs that the world's fastest-growing major economy is stabilizing after policy makers curbed lending in an effort to avert asset bubbles. A purchasing managers' index released today by HSBC Holdings Plc and Markit Economics rose to 52.9 from 51.9 in August.

Growth across Asia and the Pacific will be the fastest this year since 2007 as the region recovers strongly from the global crisis, but will moderate in 2011, the Asian Development Bank said on Tuesday. Developing Asia, a diverse group of 45 economies including China, India, Tajikistan, Samoa, and Indonesia, would grow 8.2% in 2010 and 7.3% in 2011, the ADB said in its update of its 2010 Asian Development Outlook. The 2010 growth forecast has been revised up from 7.5% in April and a forecast of 6.4% a year ago; the 2011 forecast is unchanged from April. Indian growth was expected to pick up slightly to 8.7% in 2011 from 8.5% this year, driven by domestic demand, company profits and favourable financing conditions, the ADB said.

US consumer confidence fell to its lowest level in seven months in September 2010, underscoring lingering worries about the strength of the economic recovery. The Federal Reserve said last week it was prepared to put more money into the economy, if needed, to stimulate the recovery and avoid deflation.

Back home, the Lucknow bench of the Allahabad high court will on Thursday, 30 September 2010, deliver its verdict in the politically-sensitive Ayodhya case. This follows the Supreme Court's rejection on Tuesday, 28 September 2010, of a plea to defer the judgement. The three-member bench of the Lucknow bench will give its verdict on who owns the disputed piece of land, where once stood the Babri Masjid but is claimed to be the birth place of Lord Ram by Hindu groups.

The verdict to a more than six-decade-old litigation will mark an important point in the dispute, but is unlikely to bring down the curtains as aggrieved parties are likely to move the Supreme Court. The Centre does not anticipate turbulence over the verdict as it feels the Ayodhya issue may have outlived its potency.

Tuesday's crucial hearing assumed significance as the Sunni Central Waqf Board and Akhil Bharat Hindu Mahasabha, two opposite parties to the title suit, have ruled out the scope of reconciliation in their affidavits filed in the apex court.

Foreign funds continue to aggressively mop up Indian stocks. As per provisional figures foreign institutional investors (FIIs) bought shares worth a net Rs 573.13 crore on Tuesday, 28 September 2010.

FII inflow in September 2010 totaled Rs 20,359.17 crore (till 28 September 2010), as per data from the stock exchanges. FII inflow in the calendar year 2010 totaled Rs 39,854.27 crore (till 28 September 2010).