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Indian Shares Set To Rebound On Asian Cues

3/29/2012 11:17 PM ET

Indian shares are set to rebound after a two-day retreat on Friday, as cautious optimism prevails ahead of a key two-day meeting of European finance ministers in Copenhagen starting today. The euro is stable as reports suggested that EU finance ministers are preparing to raise the combined firepower of the region's two bailout funds to as high as EUR 940 billion from EUR 500 billion.

Asian shares are trading mostly higher, albeit posting modest gains, with weaker-than-expected data on U.S. jobless claims and data showing an unexpected drop in Japanese industrial production in February helping limit the upside. China's Shanghai Composite index is down 0.2 percent ahead of the release of March PMI data due on Sunday.

On Wall Street, stocks fell early in the session before eventually ending on a mixed note overnight, as traders reacted negatively to the latest batch of U.S. economic data, including a report from the Labor Department showing that weekly jobless claims came in above economist estimates.

The report showed that jobless claims edged down to 359,000 in the week ended March 24th from the previous week's revised figure of 364,000. Economists had expected jobless claims to inch up to 350,000 from the 348,000 originally reported for the previous week.

A separate report from the Commerce Department showed that U.S. economic growth in the fourth quarter was unrevised, as a downward revision to exports was offset by an upward revision to non-residential fixed investment. The Dow made its way into positive territory to end up 0.2 percent, while the tech-heavy Nasdaq slipped 0.3 percent and the S&P 500 edged down 0.2 percent.

Back home, Indian shares extended losses for a second consecutive session on Thursday, dragging benchmark indexes Sensex and the Nifty down about 0.4 percent each, as concerns about growth prospects in the world's two largest economies, the rupee's weakness and the confusion prevailing over General Anti-Avoidance Rules (GAAR) weighed on investor sentiment.

According to provisional data released by BSE, foreign institutional investors sold shares worth a whopping Rs. 1,332.85 crore on a net basis yesterday, while domestic financial institutions bought shares to the extent of Rs.299.67 crore.

Looking ahead, investors are likely to monitor international crude oil prices closely after crude futures plummeted for a second straight day Thursday, weighed down by demand concerns after the Saudi Arabian oil minister confirmed his country would be able to up oil production to check soaring prices. With data showing a massive build-up in U.S. crude stockpiles further contributing to the slide, crude futures for May delivery ended down $2.63 or 2.5 percent to close at $102.78 a barrel on the New York Mercantile Exchange.

by RTT Staff Writer

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