Market likely to see a muted start on mixed global cues

The market is likely to see a flat-to-positive start following mixed global cues. Trading of S&P CNX Nifty futures on the Singapore stock exchange indicates a gain of 2.5 points at the opening bell. The recent buying spree by the foreign funds and a slight decline in crude oil prices may support upmove.

As per provisional figures, foreign funds bought shares worth Rs 604.51 crore and domestic funds sold shares worth Rs 389.33 crore on Monday, 4 April 2011.



Shares of Idea Cellular may see action after the company announced after market hours on Monday that it is in the process of filing necessary application before the Delhi High Court seeking vacation of the ex-parte stay on amalgamation of Spice Communications with the company. The Department of Telecommunications (DoT) has obtained an ex-parte stay from the Delhi High Court against sanctioning the amalgamation of Spice Communications with the company.

GAIL (India) is forming a joint venture to set up a gas distribution network in the western Indian city of Vadodara. The joint venture will be set up with Vadodara Mahanagar Sewa Sadan--the city's municipal corporation--with an authorized share capital of Rs 100 crore, GAIL said in a statement on Monday. GAIL, through its fully owned unit GAIL Gas, will hold a 26% stake in the newly formed company, while Vadodara Mahanagar will have 24% and the remaining 50% will be held by financial institutions and strategic partners.

The joint venture's planned total capital expenditure is expected to be nearly Rs 150 crore in the first five years, and Rs 170 crore in further expansion activities, GAIL said.

Due to merger of settlements on account of bank holiday for Gudi Padwa festival on Monday, 4 April 2011, shares purchased on Monday, 4 April 2011 should not be sold on Tuesday 5 April 2011, brokers have advised clients.

The near term major trigger for the market is Q4 March 2011 results which will start trickling in from about mid-April 2011. Investors will scrutinize post-result management commentary to gauge outlook on earnings at a time when rising salaries, raw materials prices and interest rates are pressurizing profit margins of India Inc.

India's merchandise exports rose 49.7% to $23.5 billion in February 2011 from February 2010, according to provisional data issued Friday by the Ministry of Commerce. The government didn't give any reasons for the growth in exports. Imports rose 21.2% to $31.7 billion, largely due to a rise in non-oil imports, which were up 31% from a year earlier to $23.4 billion. Oil imports in February fell 0.3% to $8.21 billion. India's February trade deficit narrowed to $8.1 billion from $10.4 billion a year earlier, the data showed. Oil imports during April to February, the first 11 months of the just-ended fiscal year 2011, rose 12.4% to $88.1 billion, while non-oil imports rose 20.4% to $217.1 billion.

A survey showed on Friday that the strong pace of expansion in India's manufacturing sector steadied in March 2011, helped by sustained new orders and output, while input prices were at their highest in at least six years, signalling further inflationary pressures. The HSBC Markit Purchasing Managers' Index, based on a survey of around 500 companies, was unchanged at 57.9 in March 2011 from February 2011, the highest since November 2010.

Prime Minister Manmohan Singh said on Thursday the government will deal with the challenge of high inflation driven by rising oil, food and commodity prices because of political upheavals and natural disasters in some countries. He stated that the government wanted to manage inflation without disturbing the growth momentum. "I am hopeful of seeing lower levels of inflation in the coming months," he said. The Prime Minister also said the tax and financial sector reforms were on government agenda and the government would raise resources through sale of equity in the public sector firms. The government is expected to raise Rs 40000 crore in the year ending March 2012 through sale of stake in state-run firms.

India imports majority of its crude oil requirements and a surge in crude oil prices over the past few months has sparked inflation and interest rates worries. High oil prices have also raised concerns about higher oil subsidy bill for the government and its negative impact on the government's fiscal position. US crude futures were down 25 cents a barrel or 0.23% at $108.22 a barrel.

On the flip side, a good monsoon this year could help ease food inflation and boost rural income. Recent reports indicate that India will receive good rains during the July-September monsoon season this year. The India Meteorological Department (IMD) is expected to come out with its long term forecast of the summer monsoon rainfall season by the end of this month.

Credit rating agency Fitch downgraded India's economic growth projection to 8.3% for the year ending March 2012, from the earlier projected 8.5%, on account of high inflationary pressures that has forced the Reserve Bank of India to hike key rates. The agency, however, kept its projection of growth for the year ending March 2013 unchanged at 8%.

Billionaire investor and international investment icon Warren Buffett who was in his maiden visit to India last month said that he hopes to spend some money in India. His firm Berkshire Hathaway is looking to park funds in large investment destinations and India fits the bill perfectly, he said. India, according to him, is not an emerging market but a very big country with a large number of significant businesses. He said that Berkshire Hathaway would look at possible acquisitions in India as and when there were opportunities.

Select Asian stocks dropped after Tokyo Electric Power Co. began dumping radioactive water from its crippled nuclear plant and semiconductor stocks declined. The key benchmark indices in Hong Kong and Singapore were up 1.46% and 0.18%. The key benchmark indices in Indonesia, South Korea and Japan were down between 0.34% and 1.15%. Markets in China and Taiwan were closed for a public holiday.

US blue-chip stocks eked out small gains Monday. The Dow Jones Industrial Average added 23.31 points, or 0.19%, to finish at 12400. The Nasdaq Composite shed 0.41 point, or 0.01%, to 2789.19 and the Standard & Poor's 500-stock index edged up 0.46 point, or 0.03%, to 1332.87.

A recent global investor survey by Franklin Templeton has found that half of respondents plan to invest outside their home country in 2011. Respondents in India are optimistic about the domestic stock market performance being better than the global counterparts. Eighty two percent of respondents in India think that Indian stock market will do better than the rest of the world over the next 10 years.