Indian markets set to continue with their positive momentum next week
The Sensex was up 121 points from the previous day’s close, ending the day at 17,465 while the Nifty closed at 5,201, up 32 points. The markets pared gains towards the end of the day as the near-month December 2009 futures & options (F&O) contracts expired today.
Rollover in Nifty futures from December 2009 series to January 2010 stood at 58% at the end of Wednesday’s (30 December 2009) trade whereas rollover in Mini Nifty futures stood at about 50%. The market-wide rollover was about 67%.
Markets will remain closed on Friday, 1 January 2010, for the New Year holiday. However, from 4 January 2010, trading will start at 9:00 IST and end at 15:30 IST, as against the current timing of 9:55 IST to 15:30 IST.
We expect the Indian bourses to continue with their upward momentum next week.
During the day, Larsen & Toubro rose 1% after it won orders worth Rs581 crore in its coal handling & water business.
NTPC rose 1% on reports that the government plans to allow the firm to sell around 10% of its power capacity at market-determined prices.
Ruchi Infrastructure rose 2%, after the company said that it had bought back foreign currency convertible bonds aggregating $8 million.
Hotel LeelaVenture rose 1% after the firm completed the second round of buyback of foreign currency convertible bonds within the deadline specified by the Reserve Bank of India.
The year gone by was terrific for stocks. Among the BSE 500 stocks, the major gainers were those that were badly beaten down in 2008—Ahluwalia Contracts (532%), Jindal South West Holdings (486%), Sterlite Technologies (456%), Aurobindo Pharma (447%), McLeod Russel (415%), Bajaj Auto Finance (407%), Oracle Financial Services Software (397%), Orbit Corporation (373%), Tata Motors (364%) and KPIT Cummins Infosystems (352%).
The major losers among the BSE 500 stocks were Maharashtra Seamless
(-89%), Cranes Software (-60%), Cals Refineries (-58%), Sterling Biotech
(-40%), Vishal Retail (-38%), Koutons Retail (-33%), Tata Communications
(-33%), Rei Agro (-31%), Reliance Communications (-30%) and Lakshmi Energy & Foods (-25%).
During trading hours, the government announced that the food price index rose 19.83% in the 12 months to 19 December 2009. The primary article index jumped 15.49% and the fuel price index rose 4.45%. The worst monsoon in nearly four decades and flooding in some parts of the country have pushed up food prices.
As per media reports, the government is expected to sell shares in 17 to 18 State-owned firms in each of the next two fiscal years, with an issue happening every two to three weeks. The report also said that the ministry of disinvestment was consulting with administrative ministries of more than 50 State-owned firms to assess the preparedness for public offer.
Meanwhile, in the report submitted to Pratibha Patil, president of India, the 13th Finance Commission has suggested the path of fiscal consolidation and sharing of tax revenues between the Centre and the States. The report has assessed the impact of the proposed goods and services tax (GST) on trade. It has also suggested steps to deal with the growing off-budgetary expenditure, especially, oil bonds, the implications of environment and climate change, and ways to improve outcomes and outputs of public expenditure.
The Reserve Bank of India commented that credit growth will rise to 17%-18% when gross domestic product (GDP) growth reaches 8%-9%.
During the day, Asia’s key benchmark indices in China, Hong Kong, Singapore and Taiwan rose by between 0.45%-1.75%. Meanwhile, markets in Japan, South Korea, Thailand, Indonesia and the Philippines were closed.
As per reports, Zhou Xiaochuan, governor, People’s Bank of China, said that Beijing will stick to its loose monetary stance, but will try to be more flexible in implementing its policies.
On Wednesday, 30 December 2009, the Dow Jones Industrial Average was up 3 points while the S&P 500 remained flat. The Nasdaq Composite added 3 points.
As per US media reports, the Chicago purchasing manager's index jumped to 60 in December 2009 from 56.1 in November 2009, the highest since January 2006 and well above expectations. The employment gauge also rose, hitting its highest level since November 2007.
In premarket trading, the Dow was trading 10 points higher.
If Morgan Stanley is right it will be the biggest annual increase since 1999 and the best sale of the US Treasuries in 2010. Yields on benchmark 10-year notes will climb about 40% to 5.5%, according to Morgan Stanley chief fixed-income economist David Greenlaw.
PIMCO’s chief executive of giant bond manager Mohamed El-Erian says that the burst of economic activity fed by government spending and near-zero interest rates will soon whether. He adds the within a spam of three or four weeks stocks will drop 10%, the unemployment rate will be up 8% a year from now and the US gross domestic product will grow at an average 2% or so for years to come.