New Delhi: Indian shares are seen rising for a fourth session on Tuesday as some optimism returns to global equity markets, with a raised buyout offer for Bear Stearns expected to boost financial stocks.
ICICI Bank, HDFC Bank and mortgage lender Housing Development Finance Corp are expected to be favoured by investors, although risks such as foreign fund outflows, rising inflation, and a big pay rise for government workers could limit gains.
”I am seeing signs of stability in the U.S., which is always good for India,” said Amitabh Chakraborty, president of equities at Religare Securities. ”Global cues are positive, so we will open up.”
”But there are things like the pay hikes and, 31 March being the end of the financial year, some selling may come from corporates and high net-worth investors as they settle their accounts for tax purposes.”
The benchmark 30-share BSE index rose 1.96% on Monday to 15,289.40 after a four-day weekend. The index is still nearly a quarter down in 2008.
Foreign funds have been net sellers of $3.7 billion of stocks this year, after buying a record $17.4 billion worth in 2007.
U.S. stocks climbed for a second straight session on Monday after JPMorgan Chase & Co lifted its offer for Bear Stearns to $10 a share from $2.
Meanwhile, data showed that sales of U.S. existing homes rose in February for the first time since July, raising hopes that the worst of the housing slump may have passed.
Equity markets in Asia rang up big gains in response, with Japan’s Nikkei Average rising 1.33% in morning session and MSCI’s measure of other Asia pacific stocks up 2.64% by 0259 GMT.
Stocks to Watch
* Oil marketing companies and refiners like Indian Oil Corp, Bharat Petroleum Corp, Hindustan Petroleum Corp, after oil fell below $100 a barrel.
* U.S.-listed companies HDFC Bank, ICICI Bank Ltd, Wipro Ltd, Satyam Computer Services Ltd and Infosys Technologies Ltd, after their ADRs rose strongly on Monday.
* Vardhman Textiles Ltd, after it signed a joint-venture agreement with American & Efird Inc, a subsidiary of Ruddick Corp.
* Chemicals and textiles firm GHCL Ltd, on its plans to spin-off its home textiles and retail businesses into separate units as part of a restructuring plan.