Pre Session- Subdued opening on the cards for D-Street
19/05/2015 08:33
Dalal Street may retreat from over three-week highs, on Tuesday, as traders resort to profit booking at current levels while foreign investors await further clarity on MAT and progress on key reforms such as the land acquisition bill pending in Parliament. The Sensex surged more than 360 points on Monday, marking a second straight rally on rising bets of an interest rate cut, forecast for a timely Monsoon and better than expected fiscal deficit number for FY 2014-15. While markets are already factoring in a 25 basis points interest rate cut at the Reserve Bank of India’s (RBI) upcoming policy meet on June 2, 2015, the government containing the fiscal deficit to 4 per cent of 2014-15 GDP, bettering its own budgeted target of 4.1 per cent could lead to a credit rating upgrade with the Modi government’s aggressive reform spree grabbing the attention of the world’s top rating agencies, supporting Indian equities.
The stock of Tata Power will be in focus as the company unveils its March quarter earnings on Tuesday. Weakness in the SGX CNX Nifty Index futures for May delivery which fell 0.32 per cent to 8,347 at 10:44 am in Singapore, signals a gap down opening at Dalal Street on Tuesday. However, global cues remain supportive as Asian shares climbed tracking a record finish at Wall Street as a surprise decline in US homebuilder sentiment in the month of May underscored worries over a worsening slowdown plaguing the world’s biggest economy, pushing back the timeline for the US Federal Reserve raising interest rates for the first time since 2006, powering demand for stocks. Federal Reserve Bank of Chicago President Charles Evans reiterated that interest rates must not be raised until early 2016. Shares in mainland China rebounded after a two-day decline amid lower than average trading volumes, while a weaker yen bolstered Japanese stocks.
