Mumbai: Indian shares are set to open higher on Thursday after a rebound in Asian bourses, but gains may be limited because of little conviction the market has seen its bottom.
“We could open up close to a percent on global cues and I expect the market to hold on to gains,” Sumeet Rohra, analyst at Antique Stock Broking, said.
The 30-issue benchmark BSE Sensex fell 3.5% on Wednesday to its second-lowest close in five months amid a global sell-off triggered by a deepening US mortgage lending crisis.
The index has fallen nearly 15% from a record 14,723.88 hit on 9 February.
“No one can predict the bottom. Valuations have become compelling and the percentage downside from these levels is relatively low,” Rohra said.
Data showed foreign funds were net sellers of $19 million of shares on 13 March. They have invested $1.2 billion in Indian equities so far in 2007.
Asian stocks rebounded more than 1% on 15 March, helped by a recovery on Wall Street and a falling yen that encouraged investors to pick up shares in exporters.
By 0400 GMT, Tokyo was up 1.5%, Seoul gained 1.4% and Hong Kong was up 0.85%. US stocks rose on Wednesday, after seeing their second-worst sell-off this year in the previous session, as some investors’ concerns about the subprime mortgage crisis eased.
The International Monetary Fund expects global economic growth to slip to 4.9% in 2007 and 2008 after last year’s bumper 5.3%, with US growth slowing to 2.6% this year but rebounding in 2008, according to draft IMF forecasts .
For India, the draft figures point to growth of 8.3% this year and 7.8% next year after 9.3% in 2006.