A superb rally on Wall Street overnight as well as strength in Asian markets are set to propel Indian stocks higher at open on a day of derivatives contracts expiry but traders will likely be wary of large intraday swings.
In Singapore, SGX Nifty futures were trading 92 points, or 1.2 percent, higher to 7,878 points.
Globally, the US market surged 3.7 percent while key Asian markets were trading between 2 percent and 2.3 percent higher.
Sentiment eased in the Chinese market too, after a number of top economists including RBI Governor Raghuram Rajan and Harvard’s Kenneth Rogoff said the Chinese slowdown was worrying but not a full-scale crisis yet.
In other asset classes, the US dollar rose, gold fell while crude held steady.
Closer home, traders expect shares to continue to remain volatile even after a strong start, especially as the market closes out the monthly derivatives contracts.
“The problem is that this has become a sell-on-rally market,” said CNBC-TV18’s Anuj Singhal, who said, traders should wait out today’s rally, if it takes place, before taking long positional trades.
“But if Nifty trades above 7,900, further short covering will likely be seen,” he said.
Investors will also likely eye action on the legislative front: the Cabinet yesterday cleared the Arbitration Bill while there is talk the government may sign an executive order to keep its version of land acquisition law alive but after making changes to some key clauses that have met with opposition.
In stocks in news, Tata Steel has shut down a plant in Wales and announced job cuts, Ultratech is said to be eyeing a JP cement plant in Chattisgarh while Power Grid has sought shareholder nod to raise Rs 14,000 crore.