The market may extend the solid recent rebound that followed a steep fall, tracking rally in Asian stocks. Expectations of cut in interest rates by state-run banks that would result in lower borrowing costs for the corporates would support the market. The sentiment will also be firm following a statement by the Commerce and Industry Minister Kamal Nath after trading hours on Tuesday, 3 November 2008, that the government will further ease foreign investment rules, including those relating to defence production.
Asian stocks surged as investors welcomed the impending end to the uncertainty around the US presidential election, while resource firms rose on the back of an overnight surge in oil prices. Democrat Barack Obama moved to the brink of capturing the presidency on Tuesday, 4 November 2008, scoring a breakthrough win in Ohio that left him in easy reach of becoming the first black elected to the White House. Votes for the US presidential election were being counted through the Asian morning session.
US stocks had their biggest Election Day rally ever on Tuesday as investors looked forward to the end of the uncertainty surrounding the long fight for the White House, while global credit markets showed more signs of a thaw. The Dow Jones Industrial Average jumped 305.45 points or 3.28%. The tech-laden Nasdaq Composite Index surged 53.79 points or 3.12%.
Meanwhile, a string of state-run banks confirmed on Tuesday, that they were considering rate cuts following last week's move by the Reserve Bank of India to slash reserve ratio and cut short-term rates and the government assurance of favourable policy measures.
The market has staged a solid rebound after a recent steep fall. From a low of 8,509.56 on 27 October 2008, the BSE Sensex rose 2,121.56 points or 24.93% in five trading sessions to 10,631.12 on Tuesday, 4 November 2008.
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