Indian shares are seen opening slightly higher on Wednesday, tracking a firming trend in Indian rupee which rose 105 paise to settle at a six-week high against the dollar yesterday on the back of renewed FII inflows and improved risk appetite.
Investors continue to bet on further policy action after the presidential elections as Kaushik Basu, chief economic advisor to the finance ministry, said diesel prices should go on a float like petrol. Telecom stocks could be in focus after the Union Cabinet deferred a proposal to levy a one-time fee on existing telecom operators for holding second generation (2G) spectrum.
Indian shares ended off their day's highs on Tuesday, although market undertone remained bullish following recent clarifications from the finance ministry on contentious tax proposals. Benchmark indexes Sensex and the Nifty briefly dipped into the red before rebounding to close up about 0.2 percent each, with consumer durable, realty and metal stocks leading the gainers.
Provisional data released by BSE shows that foreign institutional investors remained net buyers in Indian equities and bought shares worth Rs.589.71 crore yesterday, while domestic financial institutions sold shares to the extent of Rs.543.97 crore.
Asian stocks are trading mostly higher, although caution prevails ahead of upcoming monetary policy announcements from Europe on Thursday and a crucial U.S. jobs report due out on Friday.
U.S. stocks rose overnight, with a report from the Commerce Department showing a bigger than expected increase in factory orders in May and news of strong June sales by U.S. automakers underpinning sentiment. Nonetheless, trading activity remained relatively subdued before the Independence Day holiday on Wednesday. The Dow and the S&P 500 rose about 0.6 percent each, while the tech-heavy Nasdaq gained 0.8 percent.
Brent crude prices rose more than 3 percent on the New York Mercantile Exchange overnight, topping $100 a barrel as Iran stepped up its rhetoric over the Strait of Hormuz while continuing its missile drills in the area. Continued expectations that major central banks will announce additional stimulus measures to boost their economies also pushed crude prices higher.
by RTT Staff Writer
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