Nifty seen higher; Tech Mahindra, Tata Motors watched

The 50-share Nifty index is seen opening higher on Friday while Asian markets drifted in red after euro slipped to a record low against Swiss Franc and a slight pull back in commodity prices weighed on the markets.

US economic data on Thursday showed the economy grew at an annual 1.8 percent rate in the first three months of the year, weaker than most forecasts. The weak economic data weighed on commodity markets, particularly oil, which dropped more than 1 percent overnight, but showed some signs of stability on Friday, according to a report.

Increasing concerns of high inflation, rising borrowing costs along with Europe debt crisis will keep investors on the edge. Also, surging inflations fanned concerns of further tightening by the Reserve Bank of India.

Food inflation rose to a four-week high of 8.55% for the week ended May 14 as prices of cereals, vegetables and milk rose during the week. Food inflation was up a sharp 1.08 percentage points during the week from 7.47% in the previous week, official data showed.

Markets ended the May F&O series with intense last minute tussle between options buyers and sellers while the Nifty managed to close above 5400 should give some heart to the bulls.

"There is a fair chance that markets will see a sharp pullback back to 5500 levels on the Nifty in the next few trading sessions", says Kunal Saraogi, CEO, Equityrush. Traders must initiate long positions on select stocks with tight stop losses. Automobiles and pharma companies look best positioned on the charts and may lead the recovery, he adds.

According to a report, benchmark share indices - Sensex and Nifty as well as broader indices such as BSE-200 are trading below their 200-day moving averages indicating markets are in a bearish phase.

The benchmark index is still down 1.5 per cent on the week and nearly 6 per cent down for the month of May but losing interest of FII in Indian markets which pulled out nearly $1.7 billion this month remains key concerns for investors. The benchmark index slipped more than 12 per cent in 2011.

At 07:50 A.M, the Nifty India stock futures in Singapore trading 63 points higher.

Shares in Tata Motors will be in focus after the largest truck and bus maker posted its highest-ever quarterly consolidated profits for the March 2011 quarter in line with the Street's expectations. Profits were mainly driven by higher sales at home and at its Jaguar and Land Rover unit, but warned of competition and high commodity prices

Shares in State Bank of India will be in focus after the biggest lender said it will submit the revised proposal to the government for Rs 20,000 crore right issue next month.

Other important results to watch out in today are - Bank of Baroda , HDIL, NHPC, Reliance Infra and Reliance Power .

Stocks to watch:

HPCL after the state-run refiner posted 48 per cent jump in quarterly profits from a year earlier. The company has also revived plans to build in a consortium a $10 billion refinery-cum-petrochemical project in Vizag city.

BGR Energy after the power project firm said it expects its sales to grow by 15 per cent in FY12 and expect good order flow.

Zee TV after the company it has joined hands with Murdoch's News Corp, Star India to distribute their television channels in the domestic market.

According to sources, Coal India is in talks to buy up to 40 per cent stake in Indonesia's Golden Energy Mines. The shares of the company are expected to move higher in trade today.

Reliance Industries after the largest company by market value has submitted an expression of interest to buy Australia's Premier Coal. According to sources, RIL is likely to initiate due diligence on the assets of Premier Coal.

Tech Mahindra after the India's No. 5 software company reported 59 per cent drop in fourth quarterly profits on account of legal expenses incurred by Mahindra Satyam.

Shares in Aanjaneya Lifecare will be watched in today's trade which lists on India bourses today.

Cairn India after a Group of Ministers (GOM) are likely to decide today (1630 hours) if the government should approve Cairn Energy Plc's sale of stake in its Indian unit to mining group Vedanta Resources.