Equities to open up, resistance seen
October 1st, 2008 | by admin |Rating: 0
Sensex should start higher on Wednesday, taking cues from firmer major Asian markets and Wall Street’s gains overnight on renewed hopes for a US rescue package to tackle a financial crisis.
But there would be resistance as concerns about the health of the global economy remain, while a local holiday on Thursday would keep investors cautious.
“We would open higher,” said V.K. Sharma, head of research at Anagram Stock Broking. “But tomorrow being a holiday, there could logically be some profit taking and we may close with moderate losses.”
US political drama over a $700 billion plan for the government to buy illiquid securities has whipsawed markets, but expectations that Congress will pass something soon drove a 5.3 per cent rally in the S&P 500 stocks index overnight, erasing more than half of Monday’s market plunge.
Japan’s Nikkei share average was up 0.8 per cent by 0338 GMT after posting its biggest monthly decline in eight years in September, while MSCI’s measure of other Asian stocks gained 1.3 per cent.
India’s main 30-share BSE index bounced off a two-year low early on Tuesday to close 2.1 per cent up at 12,860.43 after assurance from government authorities and the central bank.
Sharma said the rebound was largely based on hopes for a Wall Street bounce, while sentiment would get a boost from data that showed foreign funds were net buyers of $96 million of shares on Monday when the market fell 3.9 per cent.
Foreigners have pulled about $9.3 billion from Indian shares this year, pulling the main index down nearly 37 per cent.