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Nifty may test 4900 levels; F&O expiry, GDP data eyed

NEW DELHI: The 50-share Nifty index is expected to open lower on Thursday tracking weak Asian markets while investors will keep a close eye on GDP data, which will be out later today.

“India’s annual economic growth probably held steady in the January-March quarter at 6.1 percent as compared to 7.8 percent for the quarter ended March 31, 2011,” according to ET Now estimates

“Annual economic growth probably held steady in the January-March quarter at 6.1 per cent and the global economic slowdown, government policy paralysis and a record low currency suggest little chance of a pick up in the current quarter,” said a Reuters report.

“With F&O expiry today, the Nifty is expected may head upward till 5020 with support around 4930 in the immediate run and resistance will be faced at 4983 levels,” Somil Mehta, Senior Tech Analyst (Equity) at Sharekhan, said.

Ashwani Gujral of ashwanigujral. com is of the view that the pullback in markets is over and now it should be a slow grind down to lower levels.

“I don’t expect more than 10% decline in the month of June, unless something disastrous happens but the uncertainty of the Greek election is sure to take all markets down to their intermediate lows,” added Gujral.

Overnight, US stocks tumbled on as surging bond yields in Spain and Italy flared tensions in markets about Europe’s ability to deal with debt crisis.

“Angst over Europe drove investors away from risky assets and into safe havens. U.S. Treasury benchmark yields fell to their lowest in at least 60 years, prices for crude fell more than 3 percent and the euro dropped below $1.24 to a 23-month low,” said a Reuters report.

The Dow Jones industrial average lost 160.83 points, or 1.28 percent, to 12,419.86. The S&P 500 Index dropped 19.10 points, or 1.43 percent, to 1,313.32. The Nasdaq Composite fell 33.63 points, or 1.17 percent, to 2,837.36.

Asian share edged lower on on Thursday as rising borrowing costs in Spain fuelled fears that more countries in the euro zone may get hit by the region’s debt crisis.

“A caution by Spain’s central banker that Madrid will miss deficit targets this year pushed Spanish 10-year yields above 6.7 percent, close to 7 percent, a level seen as unsustainable and which could push Spain to seek a bailout,” said a Reuters report.

The cost of insuring against a Spanish default scaled a record high near 600 basis points while Italy, which is also struggling with huge public debt, saw its 10-year yields top 6 percent for the first time since January.

“London copper dropped to its lowest level for the year on Thursday, extending the previous session’s more than 2 percent fall, as investors continued to exit riskier assets amid mounting worries about the euro zone debt crisis,” a Reuters report added.

Oil prices fell to multi-month lows on Wednesday and looked set to post their biggest monthly declines since October 2008, a month after the collapse of Lehman Brothers.

U.S. crude futures were down 0.3 percent at $87.60 a barrel on Thursday, after slumping $2.94 to settle at $87.82, the lowest settlement since Oct. 21, 2011.

Japan’s Nikkei 225 index was trading 1.8% lower at 8,475.75 and Hong Kong ‘s Hang Seng index was trading lower at 18,428.12, down 1.4%. South Korea’s Kospi index was trading 1.2% lower at 1821.45. China’s Shanghai index was trading at 2369, down 0.6%.

At 08:00 a.m., Nifty India stock futures in Singapore were down 49.50 point at 4,884.00, indicating a negative opening in the domestic market.

Stocks to watch out today:

DLF Ltd after the realty major reported a 38.6% drop in its net profit for the quarter ended March 31, 2012 to Rs 211.7 crore from Rs 344.54 crore a year ago. The company’s income for the quarter has declined to Rs 2,747.45 crore from Rs 2,869.72 crore last year.

SpiceJet Lts after the company reported over four-fold rise in net loss at Rs 249 crore for the fourth quarter ended March 31, due to higher fuel costs which offset a 46 per cent jump in sales.

Financial Technologies after the company posted net profit at Rs 264.05 crore in FY 12 as against loss of Rs 136.8 crore in the previous fiscal. Income from operations for the year ended March 31, 2012 grew by 25 per cent to Rs 487.04 crore from Rs 388.84 crore for the year ended March 31, 2011.

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