Bourses poised to remain in positive territory during Thursday’s trade
Indian markets remained highly volatile throughout the day, as they opened lower from yesterday’s close on weak global cues, followed by China’s move to curb lending. However, at the end of the day, bourses shrugged off weak global cues following strong industrial production data and on expectations that Indian firms may report good earnings in the third quarter. The Sensex gained 87 points from the previous day’s close, ending the day at 17,510, while the Nifty closed at 5,234, up 24 points.
During the day, Asia’s key benchmark indices in Hong Kong, Japan, Indonesia, South Korea, Singapore and Taiwan fell by between 0.87%-2.59%, while China’s index fell 3.09%.
As per reports, the Chinese central bank said that China will raise the proportion of deposits banks must set aside as reserves, by 50 basis points starting 18 January 2010.
On Tuesday, 12 January 2010, the Dow Jones Industrial Average fell 38 points while the S&P 500 and the Nasdaq Composite declined 11 points and 30 points respectively.
In premarket trading, the Dow was trading 10 points lower.
Back home, at 11:30 hrs, the Sensex slid by 63 points to 17,360 while the Nifty was trading below 5,200 at 5,187, down 24 points, following China raising its cash reserve ratio by 50 basis points. However, at 14:00 hrs, the Sensex was trading up 29 points from the previous day’s close at 17,451 while the Nifty was trading at 5,213, up three points.
Cement stocks rallied during the day, following reports that cement makers are set to hike prices by Rs3-Rs5 per 50-kilogram bag from Friday, 15 January 2009, in northern, southern and western markets. ACC was up 6% while Ambuja Cement and UltraTech Cements were up 5% each.
Banswara Syntex rose 14%, after the company bagged an order for supply of three-layer waterproof breathable fabrics for an undisclosed sum.
Deepak Nitrite shot up 20%, after the company launched new products in the fuel additives space.
Entertainment Network (India) was up 5%, on reports of follow-up buying after the RBI allowed foreign investors to buy further shares in the Mumbai-based media firm.
Sintex Industries posted 2% and 12% growth in sales and operating profits in the December 2009 over December 2008 quarter. The stock was down 1%.
IVRCL Infrastructures & Projects announced that it has bagged road projects worth Rs1,550 crore. The stock remained flat.
During the day, finance minister Pranab Mukherjee said that the Indian economy is expected to grow by around 7.75% in the fiscal year to March 2010, but food price inflation was a major concern. He said that the government could unload surplus wheat and rice stocks for open market sale. He also said that India’s rising expenditure for fertiliser subsidy is a matter of concern.
Montek Singh Ahluwalia, deputy chairman, Planning Commission, said in an interview to a television channel that food price inflation was a worrying problem, but he expected prices to go down.
Agriculture minister Sharad Pawar said that high food price inflation may start moderating in seven to ten days, following the measures unveiled by the government.
Meanwhile, Anand Sharma, trade minister, said that the government will give financial incentives to exports of around 2,000 products including those in engineering, electronics and chemicals. He also added that the boost, to support a nascent recovery in India’s exports sector, would cost up to an additional Rs500 crore ($110 million) in the current fiscal year ending in March.
As per a survey by leading staffing firm, TeamLease Services, India Inc still remains cautious about hiring in the January-March period. According to the quarterly report, hiring sentiment saw a marginal improvement with the employment outlook index for the January to March quarter standing at 47 index points, 1% higher than the previous quarter.
Tomorrow the market will open higher. If the Nifty ends up above 5,250, then we won’t be surprised to see it make a new high above 5,300.