Sensex extends gains for 7th straight day

The benchmark index BSE Sensex rose for the straight seventh day on firm global cues. It hits its highest closing since 12 August 2008.The BSE 30-share Sensex rose 94.87 points, or 0.63%, off close to 155 points from the day's high and up close to 110 points from the day's low. Banking stocks pared gains and index heavyweight Reliance Industries faltered. While IT stocks rose. Hopes of renewed reforms and rekindled growth by the new government also bolstered investor sentiment

Read more...

Sensex Up by 49.17%

Indian market has risen sharply in the past two months on hopes the worst of the global economic recession may be over. From a 3-year closing low of 8,160.40 on 9 March 2009, the Sensex has jumped 4,013.02 points or 49.17% to 12,173.42 on 15 May 2009. The BSE Sensex has risen 2,526.11 points or 26.18% in calendar year 2009. 

Foreign funds have turned sellers after recent aggressive buying of Indian stocks. Foreign institutional investors (FIIs) sold shares worth a net Rs 345.70 crore on 14 May 2009. FII inflow in May 2009 totaled Rs 9270.40 crore (till 14 May 2009) while their inflow in calendar year 2009 totaled Rs 9627 crore. 

Read more...

Foreign Institutional Investors Buying Shares Again !!

Buying demand from foreign institutional investors (FIIs) aided the recent upsurge. FIIs bought shares worth a net Rs 1491.20 crore on Monday, 4 May 2009. Their inflow in calendar year 2009 totaled Rs 2203.90 crore. 

Recovery in the Indian economy triggered a solid rally on the domestic bourses in the past few days. The rally was also a part of a sharp surge in global equities triggered by hopes the worst of the global economic recession may be over. From a 3-year closing low of 8,160.40 on 9 March 2009, the Sensex jumped 3974.35 points or 48.70% to 12134.75 on 4 May 2009. 

Activity in Indian factories expanded for the first time in five months in April 2009 as a swelling orders pipeline pointed to a tentative recovery, a survey showed on Monday, 4 May 2009. The ABN AMRO Bank purchasing managers' index (PMI) based on a survey of 500 companies, rose to 53.3 in April 2009 from 49.5 in March 2009, climbing above the threshold of 50 that separates expansion from contraction. The latest reading is the highest in seven months and it has steadily risen after hitting a trough of 44.4 in December 2008.

Manufacturing makes up about 16% of India's gross domestic product. The boost in manufacturing index came from a surge in new orders. The new orders index rose to 54.9 in April 2009 from 49.5 in March 2009. Several research notes in the past few days have pointed to improvement in economic activity in the months ahead. 

European shares rose with financials the biggest gainers on hopes that the results of US government stress tests on banks would reveal only modest shortfalls for the sector. Key benchmark indices in UK, France and Germany were up by between 0.10% to 2.87% 

Read more...

Sensex surges to six-month high as global stocks rally

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. 

Read more...

A good news for the economy is ..

A good news for the economy is forecast of a near normal monsoon by the India Meteorological Department (IMD) on 17 April 2009. The IMD said rainfall in the June-September 2009 monsoon season was expected to be 96% of the long-term average. The outlook is among the nation's most widely watched indicator as monsoon rains are a major influence on output of key crops, economic activity and also affects sentiment in the country's financial markets. 

Read more...

Foreign funds have resumed buying

Foreign funds have resumed buying. According to provisional data on NSE, foreign institutional investors (FIIs) were net buyers worth Rs 241.13 crore while domestic institutional investors funds bought shares worth Rs 425.83 crore on Thursday, 23 April 2009. Foreign institutional investors (FIIs) bought shares worth a net Rs 1.70 crore on Wednesday, 22 April 2009, as against an outflow of Rs 62.70 crore on Tuesday, 21 April 2009. FII inflow in April 2009

totaled Rs 4548.70 crore (till 22 April 2009). FII outflow in calendar year 2009 totaled Rs 2,122.90 crore (till 22 April 2009). 

FIIs had resorted to heavy selling of Indian stocks in the first two months of calendar 2009. Domestic institutional investors had absorbed the selling by FIIs. 

Read more...

Reserve Bank of India (RBI) Cuts Interest Rates

The Reserve Bank of India (RBI) on Tuesday, 21 April 2009 cut its key short-term rates by 25 basis points each to shore up faltering growth in the face of the global economic slowdown. The Reserve Bank also repeated a call for banks to pass on its rate cuts to customers and said deposit rates should also fall. "There
is scope for the overall interest rate structure to move down within the policy rate easing already effected by the Reserve bank," it said, adding its latest rate cut reinforced the case. 

Reacting to the RBI rate cut, ICICI Bank, India's largest private sector bank by net profit, announced a reduction in both deposit and lending rates after trading hours on Tuesday, 21 April 2009. 

The RBI cut is growth estimate for the year ended March 2009 (FY 2009) to 6.5% to 6.7%, from 7% projected earlier. It has forecast growth of around 6% for the year ending March 2010 (FY 2010). The fiscal and monetary stimulus measures initiated during 2008-09 coupled with lower commodity prices could cushion the downturn in the growth momentum during 2009-10 by stabilizing domestic economic activity to some extent, RBI said in a statement. However, any upturn in the growth momentum is unlikely in view of the projected contraction in global demand during 2009, particularly decline in trade, it added. 

Strong rural demand, lagged impact of monetary and fiscal stimuli,softening of domestic input prices, investment demand from brown-field expansion projects and some restructuring initiatives are expected to have a positive impact on industrial production in the coming months, the RBI said. 

While moderation in internal accruals has an adverse effect on corporate investment, decline in input prices and reduction in borrowing costs may have a favourable impact on profitability of the corporate sector going forward, the RBI said. 

The central bank said that managing large government borrowing in FY 2010 in a non-disruptive manner would be a major challenge, and said it would used a mix of monetary and debt management tools to ensure this was done smoothly. Large borrowings also militate against the low interest rate environment that the RBI is trying to maintain to spur investment demand in keeping with the stance of monetary policy, the central bank said in its policy statement. 

The RBI said wholesale-priced based inflation was expected to turn negative early in the current fiscal year, but this should not be interpreted as deflation for policy purposes. It projected WPI inflation would be around 4% at the end of FY 2010. 

The RBI said a planned April 2009 review of the policy on foreign banks in India would now not go ahead until there was greater clarity regarding stability, recovery of the global financial system and better global coordination on regulation and supervision. 

ICICI Bank also cut rates for retail customers by 50 basis points. The rates on deposits have been cut between 25 to 50 basis points, with effect from Friday 24 April 2009, the bank said. 

India's second largest private sector bank by operating income HDFC Bank rose 0.68%. Its ADR gained 6.4% overnight. The banks' net profit rose 33.9% to Rs 630.88 crore on 53.1% rise in operating income to Rs 5,365,52 crore in Q4 March 2009 over Q4 March 2008. The results were more or less in line with market expectations. 

HDFC bank's gross non performing assets (NPA) stood at 1.98% of advances as of 31 March 2009 compared to 1.91% as of 31 December 2008. Net NPA as of 31 March 2009 was at 0.63% of net advances. 

India's biggest dedicated housing finance firm by operating income HDFC rose 0.73%. 

Read more...