Enlarge Photo People watch a large screen displaying India's benchmark share index on the facade of the... Thu, Jul 9 09:44 AM
NEW DELHI (Reuters) The BSE Sensex is expected to start cautiously on Thursday after dropping to their lowest close in more than a month in the previous session, and uncertainties about a global economic recovery will keep investors wary.
There are concerns robust foreign fund inflows, which had lifted the main stock index by nearly half in the June quarter, could slow down sharply and even reverse if there was more pain for the world economy.
Shares in DLF Ltd will be in focus after the Economic Times cited two unnamed company executives as saying the top listed developer had sold its stake in an equal joint venture with Ackruti City to a U.S.-based real estate fund for more than 2 billion rupees ($41 million).
V.K. Sharma, head of research at Anagram Capital, said any pullback would be shortlived.
"We still believe the levels before elections will be revisited," he said, referring to around 12,000 points for the BSE index before the ruling coalition won re-election in
mid-May and sparked a big surge.
The benchmark, which dropped 2.8 percent on Wednesday to 13,769.15, has fallen 7.7 percent this week after the budget disappointed investors on Monday.
Still, it is up 42.7 percent this year after rallying for 16 of the last 17 weeks.
Foreign funds, a major driver for stocks, have poured in $5.8 billion so far in 2009, but there is little clarity on the outlook.
Asian markets were mostly weak with Japan's Nikkei average falling 0.5 percent, hurt by a strong yen, while the MSCI index of Asia-Pacific shares excluding Japan was
little changed.
Nifty futures traded in Singapore were up 0.3 percent at 0345 GMT.
Wholesale price index due around 0630 GMT will be watched. The WPI is forecast to have fallen 1.47 percent in the 12 months to June 27, a fourth straight fall, according to a Reuters poll of 10 analysts.
STOCKS TO WATCH
* IOL Netcom Ltd after its board approved raising up to 2.5 billion rupees.
* Amtek group firms Amtek Auto Ltd, Amtek India and Ahmednagar Forgings after their respective boards approved raising funds by issuing warrants to founders.
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), Sensex, on Tuesday gained 127 points in hindsight and low selling pressure. The projected fiscal deficit of 6.8 per cent and silence on disinvestment plans in Finance Minister Pranab Mukherjee's budget speech caused the market to tumble intra-day. However, it recovered by the end of the day's trade as sentiments stabilise and sellers held on to stocks, and the Sensex gained 0.9 per cent to end at 14,170. The national Stock Exchange's Nifty (
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