Indian shares may open a tad higher on Tuesday after Prime Minister Manmohan Singh expanded the terms of reference of the GAAR committee by referring the issues relating to taxation of FIIs and portfolio investors to a committee that will review a controversial law that allows India to tax Vodafone-like deals.
Having said that, investors may adopt a cautious stance ahead of the Reserve Bank of India's quarterly monetary policy review due later in the day. According to the RBI's macroeconomic and monetary developments review Q1, FY13, inflation continues to be marked by a number of upside risks even as economic expansion remains weak. The central bank has scaled down India's real GDP forecast in 2012-13 to below 6.5 percent from 7.2 percent in the last survey, citing a host of global and domestic factors.
Indian shares rose sharply for a second consecutive session on Monday after European leaders signalled their readiness to curb the region's debt crisis. The benchmark 30-share BSE Sensex ended the day up 305 points or 1.81 percent at 17,144, while the broader Nifty index rose by about 100 points or 1.96 percent to 5,200.
Provisional data released by BSE shows that foreign institutional investors bought shares worth Rs.928.95 crore on a net basis yesterday, while domestic financial institutions offloaded shares to the extent of Rs.233.72 crore.
Asian Markets
Asian markets are trading mostly higher, although the mood is somewhat cautious following a flat close on Wall Street overnight. Key benchmark indexes in Australia, Hong Kong, Japan and South Korea are up between 0.5 percent and 1.3 percent, while China's Shanghai Composite index and Malaysia's KLSE Composite are declining marginally. Singapore's Straits Times index is moving down 0.35 percent.
U.S. And European Markets
U.S. stocks ended a choppy session modestly lower overnight, as traders awaited the outcome from central bank meetings this week. The Dow ended down less than 0.1 percent and the S&P500 dipped less than a point, while the tech-heavy Nasdaq slid 0.4 percent.
However major European markets rose more than a percent each on expectations the region's leaders will unveil steps to curb the debt crisis.
Crude
U.S. crude futures snapped a four-day winning streak to settle lower on Monday, with crude for September delivery dropping $0.35 or 0.4 percent to close at $89.78 a barrel on the New York Mercantile Exchange, after hitting a high of $90.95 a barrel intraday.
by RTT Staff Writer
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