Asian Economic News
Indian Market May Open Higher On Favorable Asian Cues
11/3/2009 11:16 PM ET
(RTTNews) -
The Indian market is likely to open on a positive note Wednesday morning, tracking positive Asian cues. Additionally, short covering following recent losses and a positive talk by finance minister Pranab Mukherjee on stimulus, economy and fiscal prudence may add to the positive momentum.
Speaking at an annual Economic Editors conference on Tuesday, the finance minister said that the fiscal stimulus will continue for some more time to allow its impact to fully run through the economy. There were distinct signs of pick-up in the economy, he said and asked banks to boost lending to negate the impact of a bigger-than-expected shortfall in summer crop.
However, in the short term, apprehensions surrounding a global economic recovery and concerns that central banks and governments worldwide may end stimulus measures gradually, may keep underlying sentiment bearish. According to analysts, the Indian market is likely to see a further 10%-15% downside.
Traders may also look forward to interest rates announcements from the U.S, U. K and Eurozone this week. Yesterday, the Reserve Bank of Australia raised its interest rates by 25 basis points to 3.5 percent, but said it may pause its tightening cycle in December.
The monetary policy making body of the U.S Federal Reserve is expected to announce its decision on interest rates and issue an accompanying statement on the state of economy at about 2.15 pm ET Wednesday.
On Wall Street, the major averages finished a choppy session on the opposite sides of the unchanged mark overnight despite some signs of life on the M&A front and positive news on factory orders. A section of traders chose to stay on the sidelines ahead of release of key economic reports in the second half of the week.
Energy and raw-materials producers rose as crude oil advanced and gold climbed to a record, but technology stocks fell led by Intel Corp after Morgan Stanley reduced its rating on the stock to "cautious.' While the Dow ended lower by 0.18%, the Nasdaq rose 0.4% and the S&P 500 moved up 0.24%.
The Indian ADRs also closed on a mixed note. Infosys, ICICI Bank, MTNL and Mahindra Satyam advanced by less than a percent each, but Sterlite Industries shed 2.55%, Wipro eased 0.8%, Reddy's Laboratories declined nearly 2% and HDFC Bank slipped 0.21%.
Meanwhile, European stocks declined to a one-month low after UBS AG reported a wider-than-expected loss and Royal Bank of Scotland Group Plc said it will receive a $42 billion capital injection from the U.K government.
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