Positive global cues and short covering in April 2009 derivatives contracts which expired today, 29 April 2009, boosted the bourses in a volatile trading session. A sharp surge was witnessed in late trade. The BSE 30-share Sensex attained its highest closing in more than six months.
Banking, realty, auto and IT stocks were in the limelight. The Sensex jumped 401.50 points or 3.65%. A recovery in the economy also boosted the bourses. Index heavyweight Reliance Industries jumped past the Rs 1,800 mark.
The market was volatile as traders roll over positions from April 2009 contracts to May 2009 contracts ahead of the expiry of the near month April 2009 derivatives contracts. After a firm opening the market surged in early trade as strong Q4 results from mobile services giant Bharti Airtel and gains in Asian stocks bolstered sentiment. Profit taking after a recent solid surge in share prices pulled the market off the higher level in morning trade. The market bounced back again in early afternoon trade before paring gains. Volatility continued in afternoon trade. The market firmed up again in mid-afternoon trade. It surged in late trade.
The expiry of April 2009 derivatives contracts was advanced by a day from 30 April 2009 as the stock market remains closed on 30 April 2009 on account of voting for the parliamentary elections in Mumbai on 30 April 2009. As per reports, rollover of Nifty positions from April 2009 series to May 2009 series stood at 61% while those of stock futures were 54%, as on Tuesday, 28 April 2009.
A recovery in the economy supported stocks today, 29 April 2009. India's industrial production may have risen 10% on a monthly basis in March 2009 as the effects of a recent spate of fiscal and monetary measures started showing up, Macquarie Research said in a recent note.
UBS's lead economic indicator in India has climbed for three consecutive months pointing to a strong recovery in industrial activity by June 2009, it said in a note late on Friday, 24 April 2009. UBS said the key variables which have boosted its lead indicator index was the government bond yield spread, real (M1) money supply and a revival in foreign capital inflows. "Our base-case scenario is for the Indian economy and corporate earnings to bottom out by the second half of 2009/10 and for full recovery in 2010/11," it said. UBS said it is positive on the Indian stock market on a 12 month view with overweight recommendation for autos, metals, banks, real estate and conglomerates.
The Reserve Bank of India (RBI) said on Tuesday it had extended up to 31 October 2009, the ceiling on the rates of interest on pre-shipment rupee export credit of up to 270 days and post-shipment rupee export credit up to 180 days at benchmark prime lending rate minus 2.5%. The earlier validity was up to 30 April 2009.
The Reserve Bank of India (RBI) governor D. Subbarao on Saturday, 25 April 2009, said unwinding of fiscal stimulus in an orderly manner is one of the major challenges going forward. The central bank governor also highlighted other challenges ahead. These include implementing the fiscal stimulus packages, particularly stepping up public investment, revival of private investment demand, maintaining flow of credit while ensuring credit quality.
For the central bank, which is also the regulator of the financial markets, preserving financial stability along with provision of adequate liquidity is another task that will have to be addressed, according to the RBI governor. Besides, it will have to ensure an interest rate environment that supports the return of the economy to a high growth path.
Trading in US index futures showed the Dow could rise 71 points at the opening bell on Wednesday 29 April 2009.
Better-than-expected US consumer data helped support Wall Street late Tuesday, with indexes ending only mildly lower. The Dow Jones Industrial Average shed 8.05 points, or 0.10%, to 8,016.95, the Standard & Poor's 500 Index dropped 2.35 points, or 0.27%, to 855.16. The Nasdaq Composite index fell 5.60 points, or 0.33%, to 1,673.81.
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