Market may open on a firm note on positive Asian stocks

The market is likely to see a strong opening on positive Asian stocks. Trading of Nifty 50 index futures on the Singapore stock exchange indicates that the Nifty could jump 56 points at the opening bell.

In overseas markets, Asian stocks were trading higher ahead of the UK's upcoming 23 June 2016 referendum vote on its future within the European Union. US stocks closed modestly higher yesterday, 16 June 2016 ending a five-day streak of losses with telecoms leading sector advancers. Meanwhile, the Bank of England yesterday, 16 June 2016 kept its key interest rate at a record low of 0.5% and made no changes to its 375-billion-pound ($530 billion) asset-purchase program. All nine rate-setting policy makers voted to hold rate unchanged. The decision marked the last before the 23 June 2016 referendum in the UK on whether the country should stay or exit the European Union (EU). A vote to leave the EU could materially alter the outlook for output and inflation, and therefore the appropriate setting of monetary policy, the BOE said in a statement. The interest rate decision was announced after close of Indian market hours yesterday, 16 June 2016.

Closer home, foreign portfolio investors (FPIs) sold shares worth a net Rs 156.75 crore yesterday, 16 June 2016, as per provisional data released by the stock exchanges. Domestic institutional investors (DIIs) sold shares worth a net Rs 163 crore yesterday, 16 June 2016, as per provisional data.

Sugar stocks will be watched. The government yesterday, 16 June 2016, reportedly imposed 20% customs duty on sugar exports to boost domestic supply and check prices which are ruling high at Rs 40 per kg. The duty has been imposed to restrict exports following sharp rise in global prices. The duty is, however, lower than 25% proposed by the Food Ministry, reports added.

On the macro front, India's current account deficit (CAD) narrowed sharply to $0.3 billion (0.1% of GDP) in Q4 of 2015-16, significantly lower than $7.1 billion (1.3% of GDP) in Q3 of 2015-16 and marginally lower than $0.7 billion (0.1% of GDP) in Q4 of 2014-15. The contraction in CAD was primarily on account of a lower trade deficit ($24.8 billion) than in Q4 of last year ($31.6 billion) and $34 billion in the preceding quarter. The government announced the economic data after market hours yesterday, 16 June 2016.

Weak global cues triggered a fresh selling on the domestic bourses yesterday, 16 June 2016. The Sensex lost 200.88 points or 0.75% to settle at 26,525.46, its lowest closing level since 14 June 2016.

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