Indian shares to rise as oil falls, reform hopes

Enlarge Photo File photo of the Bombay Stock Exchange (BSE) building. REUTERS/Punit Paranjpe

Wed, Jul 9 09:43 AM

NEW DELHI (Reuters) - Indian shares should start higher on Wednesday after a sharp fall in global oil prices boosted markets, while the withdrawal of left allies of the

government revive hopes for pushing stalled economic reforms.

Oil was trading little changed above $136 a barrel after falling more than $5 on Tuesday.

Asian stocks markets bounced as fears that inflation and the credit crisis could worsen a global slowdown eased after oil fell sharply.

By 0339 GMT, Tokyo's Nikkei was up 1.5 percent and MSCI's measure of other Asia Pacific stocks gained 1.9 percent.

"I think the market should remain positive today," said Amitabh Chakraborty, president of equities at Religare Securities.

"Yesterday, the market had given a fantastic thumbs up to the left exit though it closed negative because of global factors."

Software services firms would be in focus ahead of bellwether Infosys Technologies' quarterly results on Friday. A weaker rupee in the June quarter would have boosted the revenue of the outsourcers.

"First-quarter results will surprise the markets as investors are factoring in extreme pessimism. We should see a smart short rally of 1,000 points on the corporate results," Chakraborty said.

Shares in No. 2 mobile firm Reliance Communications will be watched after the deadline for exclusive talks for a tie-up with South Africa's MTN ended on Tuesday with no announcement.

The benchmark BSE 30-share index closed 1.3 percent lower at 13,349.65, recovering from early losses of as much as 3.5 percent in the morning before the left parties pulled out.

----------------------MARKET SNAPSHOT AT 0341 GMT---------------

INSTRUMENT LAST PCT CHG NET CHG

S&P 500 1273.7 1.71% 21.390

USD/JPY 107.46 0.02% 0.020

10-YR US TSY YLD 3.8976 -- 0.010

SPOT GOLD $918.9 -0.07% -0.600

US CRUDE $136.5 0.34% 0.460

DOW JONES 11384.21 1.36% 152.25

ASIA ADRS 145.88 0.02% 0.03

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STOCKS TO WATCH

* Discount carrier SpiceJet Ltd, after the Business Standard said without citing sources that Goldman Sachs had expressed an interest in acquiring equity in the airline. A spokesman for Goldman declined comment.

* Jewellery maker Shrenuj & Co Ltd, after it said it expected consolidated sales to rise 25-30 percent in 2008/09.

* Drugmaker Dr. Reddy's Laboratories Ltd, after it agreed to globally distribute U.S.-based Albemarle Corp's painkiller Ibuprofen.

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