Market may extend last two days gains on firm Asian stocks

The market may extend last two days gains to hit fresh 33 month highs tracking firm Asian stocks. The recent strong foreign fund inflows may further aid sentiment. Trading of S&P CNX Nifty futures on the Singapore stock exchange indicate that the Nifty could gain 38 points at the opening bell.



Asian stock markets were higher on Monday, a day ahead of central bank decisions in Japan and Australia. Wall Street's higher finish before the weekend also bolstered sentiment. The key benchmark indices in Indonesia, Japan, Taiwan, Hong Kong and South Korea rose by between 0.24% to 1.54%. The Chinese and Singaporean markets remains closed today on account of a holiday.

Back home, foreign funds continue to aggressively mop up Indian shares. As per provisional figures on stock exchanges, foreign institutional investors (FIIs) bought shares worth Rs 1825.20 crore on Friday, 1 October 2010.

FIIs bought shares worth staggering Rs 4755.80 crore in a single trading session on Thursday, 30 September 2010, which was a result of gross purchases Rs 10917.80 crore and gross sales Rs 6162 crore. .

Net equity inflow in 2010 now stands at a record $19.43 billion, above last year's $17.45 billion, as per data from the Securities & Exchange Board of India. The Sebi data includes FII inflow through primary and secondary market route.

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.

The manufacturing sector continued to expand although at a considerably slower pace than in preceding months, predominantly weighed down by a fall in new orders and output. The HSBC Markit Purchasing Managers' Index, based on a survey of 500 companies, slid to 55.1 in September 2010, which marks the lowest reading since November last year, from 57.2 in the August 2010 survey. Though the key index for manufacturing in Asia's third largest economy has slipped, this was the 18th consecutive month it has remained above the 50 mark that divides growth from contraction.

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.

Equities started October 2010 on a buoyant note on Friday 1 October 2010, with the two key benchmark indices -- the barometer index BSE Sensex and the 50-unit S&P CNX Nifty, scaling 32-1/2-month highs. The BSE 30-share Sensex was up 375.92 points or 1.87% to 20,445.04, its highest closing level since 14 January 2008.