Market may extend gains on firm Asian stocks

The market may extend Thursday's (30 September 2010) gains on firm Asian stocks. Trading of S&P CNX Nifty futures on the Singapore stock exchange indicate that the Nifty could gain 26 points at the opening bell.



Auto and cement stocks will be in focus as firms unveil monthly sales volume data for September 2010.

Asian stock markets rose on Friday, but their gains were modest as investors traded with caution ahead of the release of key US manufacturing data. The key benchmark indices in Indonesia, Japan, China, South Korea, Singapore and Taiwan rose by between 0.16% to 1.72%. But, Hong Kong's Hang Seng fell 0.09%.

Japan's deflation moderated and the unemployment rate fell, indicating the nation's recovery remains intact as policy makers consider stimulus measures to support the economy against damage from a strengthening yen.

China's manufacturing expanded at the fastest pace in four months in September, adding to signs that economic growth is stabilizing even as the government curbs energy use and tries to cool the property market. The official purchasing managers' index rose to 53.8 from 51.7 in August.

Back home, the food price index rose 16.44% while the fuel price index climbed 10.73% in the year to 18 September 2010, government data released on Thursday showed. In the prior week, annual food and fuel inflation stood at 15.46% and 11.48% respectively. The primary articles index was up 18.31% in the latest week compared with an annual rise of 16.80% in the previous week, both under a new series of data with a different base year of 2004-05, new components and weightings. The wholesale price index, the most widely watched gauge of prices in India, rose 8.5% in August 2010.

The growth of core infrastructure industries slowed to 3.7% in August 2010, as compared to 6.4% in the same month last year, according to data released by the government. These six segments account for 26.7% of the country's total industrial output.

The Lucknow bench of the Allahabad high court on Thursday, 30 September 2010, ruled that the disputed land in Ayodhya where the Babri Masjid stood for 500 years until it was demolished in 1992 shall be divided into three parts. A two-thirds portion is to be shared by two Hindu plaintiffs and one-third will be given to the Sunni Muslim Waqf Board.

By a 2-1 majority verdict, plaintiffs representing Lord Ram, the Nirmohi Akhara and the Waqf Board were declared joint title-holders of the property. The Bench asserted that the portion under the central dome of the demolished three-dome structure where the idol of Ram Lalla had been kept in a makeshift temple was the birthplace of Lord Rama "as per faith and belief of the Hindus."

The Bench of Justice S.U. Khan, Justice Sudhir Agarwal and Justice D.V. Sharma dismissed the suit filed by the Sunni Waqf Board for possession of the Babri Masjid because it was time-barred. It cited faith as the basis to declare the site the janmasthan of Lord Ram, but ordered a three-way partition on the basis of historical use of the site by Muslims and Hindus.

The Waqf Board said it would file an appeal in the Supreme Court against the judgment . Waqf Board counsel Zafaryab Jilani told a media conference that the All India Muslim Personal Law Board would decide when to file it. The Bench clarified that even though all the three parties are declared to have a one-third share each in the property, minor adjustments could be made -- for which the adversely affected party would be compensated from the adjoining land acquired by the Central Government.

Coming back to stocks and foreign funds continue to aggressively mop up Indian shares. Foreign institutional investors (FIIs) bought shares worth a staggering Rs 2496.39 crore on Thursday, 30 September 2010, as per the provisional data from the stock exchanges.

FII inflow in September 2010 totaled Rs 23612.43 crore, as per data from the stock exchanges. FII inflow in the calendar year 2010 totaled Rs 43,107.53 crore (till 30 September 2010).

But, a section of the market is concerned that the large initial public offer (IPO) of state-run Coal India in mid-October 2010 would soak liquidity from the secondary equity markets. The government plans to raise about Rs 15000 crore to Rs 16000 crore from divestment of 10% stake in Coal India. The IPO is billed as the country's largest issue ever.