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Monday, May 23, 2016

Market may edge higher

Trading of Nifty 50 index futures on the Singapore stock exchange indicates that the Nifty could rise 22.50 points at the opening bell.

In overseas market, Asia markets were mixed today, 23 May 2016, with the Japanese benchmark index falling, as markets adjust to a slew of recent comments from the US Federal Reserve about a possible interest rate hike in June. Japan's Nikkei 225 was down 1.18%. A two-day meeting of G7 finance ministers and central bank governors was scheduled on 20 and 21 May 2016 in Japan. The United States issued a fresh warning to Japan against intervening in currency markets on Saturday, 21 May 2016, as the two countries' differences over foreign exchange overshadowed a Group of 7 finance leaders' gathering in the Asian nation. Japan and the United States are at logger-heads over currency policy with Washington saying Tokyo has no justification to intervene in the market to stem yen gains, given the currency's moves remain orderly. The G7 meeting is the meeting of the finance ministers from the group of seven nations viz. United States, Japan, Germany, France, United Kingdom, Italy and Canada.

US stocks finished the trading week in positive zone as the equity markets reclaimed some of the recent losses that commenced on the heels of the release of the minutes from the Fed's April monetary policy meeting. In US, Philadelphia Fed President Patrick Harker will speak to the Philadelphia Council for Business Economics followed by the press meet in Philadelphia on Monday, 23 May 2016. St. Louis Federal Reserve Bank President James Bullard will address a speech on the economy and monetary policy in Beijing followed by the press meet on Monday, 23 May 2016.

Closer home, foreign portfolio investors (FPIs) sold shares worth a net Rs 743.86 crore on Friday, 20 May 2016, as per provisional data released by the stock exchanges. Domestic institutional investors (DIIs) bought shares worth a net Rs 597.49 crore on Friday, 20 May 2016, as per provisional data.

Among corporate news, BPCL and Tata Power Company will announce Q4 results on Monday, 23 May 2016.

Britannia Industries' consolidated net profit rose 13.73% to Rs 190.23 crore on 6.87% rise in total income to Rs 2235.68 crore in Q4 March 2016 over Q4 March 2015. The announcement was made after market hours on Friday, 20 May 2016. The revenue growth was impacted due to phasing out of excise duty incentives available to the company.

Shares of Multi Commodity Exchange of India (MCX) may edge higher after the Reserve Bank of India (RBI) removed the restrictions placed on purchase of the company's shares by foreign institutional investors (FIIs) with immediate effect. The RBI after trading hours on Friday, 20 May 2016, said that the aggregate shareholding of FIIs in MCX has gone below the prescribed threshold caution limit stipulated as per the current FDI policy.

Concerns about future foreign equity inflows triggered by tougher norms from the Securities and Exchange Board of India (Sebi) on offshore derivative instruments (ODIs) or participatory notes (P-notes) pulled Indian stocks lower on Friday, 20 May 2016. The barometer index, the S&P BSE Sensex, fell 97.82 points or 0.39% to settle at 25,301.90. The Nifty 50 index fell 33.70 points or 0.43% to settle at 7,749.70. The two key benchmark indices trimmed losses after extending intraday slide in late trade. Except the BSE FMCG index, all the other sectoral indices on BSE registered losses. With third straight day of decline, the Sensex and the Nifty, both, hit two-week closing low.