In the absence of Wall Street cues, the Indian market may trade range-bound on Tuesday amid alternate bouts of buying and selling.
With the benchmark indexes closing at fresh two-and-half years highs yesterday, a little bit of profit taking cannot be ruled out. But at the same time, renewed FII buying may help the market maintain its upward momentum.
FIIs bought shares worth Rs.946.5 crore on a net basis Monday, extending their buying spree for a sixth consecutive session, provisional data shows. Net purchases by FIIs totaled $13 billion thus far in 2010, adding to last year's record $17.5 billion inflows.
Meanwhile, trading volumes could remain low due to a nationwide bank strike called today by the All India Bank Employees Association. Nearly 10-lakh employees from 27 public sector banks, 18 foreign banks, 26 private, 82 regional rural banks and 1,721 co-operative banks would participate in the strike to protest against price rise, violation of labour laws, grant of licenses to private banks and disinvestment in public sector undertakings, according to AIBEA's Secretary, Vishwas Utagi.
On the economic front, data released yesterday showed that growth in India's direct tax mop-up moderated slightly in August, but the government is firmly on course to meet its direct tax collection target of about Rs. 4.30 lakh crore set for 2010-11 as the economy is growing at over 8 percent.
Asian stocks are currently trading mixed, as news of a stimulus proposed by U.S. President Barack Obama to help boost economic growth was overshadowed by a stronger yen and declines in oil prices.
The dollar is rising against the euro on rekindled concerns over the health of European banks, while the Dow futures are up 16 points. The markets were shut in the U.S. overnight for the Labor Day holiday. European stocks ended Monday's session in positive territory with modest gains amid optimism about global recovery.
Closer home, the Indian market rose sharply to its highest level since February 2008 on Tuesday, as strong global cues, continued buying by foreign funds and a good monsoon thus far this year boosted sentiment.
The rally was broad-based and the market breadth was extremely strong. While the 30-share Sensex ended up 339 points or 1.86% at 18,560, the broader Nifty rose by 98 points or 1.78% to 5,577 and the BSE mid-cap and small-cap indexes gained 1.31% and 1.83%, respectively.
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June 05, 2026 16:18 ET A busy week for economic news flow saw a slew of reports being released that reflected the trends in the U.S. labor market. In Europe, economic growth and inflation data gained attention as the European Central Bank and Bank of England head for policy session later in the month. In Asia, the monetary policy session of the Indian central bank was in focus as the country, a major oil importer, reels under the pressures of a weaker rupee and rising inflation.