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Indian markets powered ahead on the back of strong manufacturing and export data
A jump in manufacturing activity in December 2009, and the latest data showing a surge in exports in November 2009, helped Indian markets to remain positive throughout the day. The Sensex was up 94 points from Thursday’s (31 December 2009) close, ending the day at 17,559, while the Nifty closed at 5,232, up 31 points. Indian markets may open higher tomorrow on the back of today’s strong data.
During the day, auto stocks gained on the back of strong sales in the month of December 2009.
Mahindra & Mahindra (M&M) shot up 5%. The company reported 122% rise in its domestic sales to 22,754 units in December 2009 over December 2008. The company sold a total of 24,001 vehicles (domestic plus exports) in December 2009, as against 11,172 vehicles sold in December 2008.
Tata Motors rose 4% on reports that it registered 105% growth in sales to 51,627 units in December 2009 over December 2008.
TVS Motor zoomed 10% after the company said that its sales rose 34% to 1,19,701 units in December 2009 over December 2008.
JSW Energy closed at Rs101. The stock debuted at Rs102, a premium of 2% over the initial public offer (IPO) price.
Sical Logistics gained 6%, extending gains for the second consecutive day, after a unit of the company secured a contract worth Rs163 crore.
Reliance Industries Ltd (RIL) declined 1%. As per reports, the company has sold 2.5 crore shares at a weighted average price of Rs1,035 each or at a 5 % discount to Thursday’s (31 December 2009) market close, to State-run Life Insurance Corporation of India.
Ranbaxy Laboratories remained flat after the company said that it has launched a skin-care drug in India.
Marico declined 1% after the firm’s Malaysian unit acquired hair styling brand ‘Code 10’ from Colgate Palmolive for an undisclosed sum.
As per the HSBC Markit survey, the rate of growth in manufacturing rose for the first time in three months in December 2009, with activity reaching its highest since May 2009 on sharp rises in new work and output. The HSBC Markit Purchasing Managers’ Index (PMI), based on a survey of 500 companies, rose to 55.6 in December from 53.0 in November. The reading was the strongest since May's 55.7, which was the strongest in 2009. A reading above 50 means activity expanded during the month.
According to the commerce ministry, India’s export sector has bounced back with outward trade growing by 18% in November 2009. The export figures turned positive after staying in the red for 13 months. The value of exports in November 2009 jumped to $13.19 billion compared to $11.16 billion in the year-ago period.
On Thursday, 31 December 2009, KC Chakrabarty, RBI’s deputy governor, said the apex bank would review interest rates at its next policy review scheduled for 29 January 2010 and not before. He further said that the credit growth will rise to 17%-18% when GDP growth reaches 8-9%.
Meanwhile, on Saturday, 2 January 2009, C Rangarajan, chairman of the Economic Advisory Council to the prime minister, said that the economy will expand 8% in 2010/11 after growing between 7 and 7.5% in the current fiscal year to end-March. He also said the economy would return to an annual growth rate of 9% in the fiscal year to end-March 2012 on the back of an improvement in the world economy and global trade.
Kaushik Basu, the finance ministry’s chief economic advisor, said that the economy is expected to grow at more than 7.5% in the fiscal year ending March 2010, boosted by better growth in the December 2009 quarter. He also added that the government is not expected to announce any monetary tightening measures for now.
During the day, Asia’s key benchmark indices in Indonesia, Japan, Taiwan and South Korea rose by between 0.24%-1.03%, while indices in Hong Kong and Singapore fell by between 0.14%-0.23%.
China’s Shanghai Composite was down 1%, despite Chinese manufacturing activity climbing for the ninth straight month in December 2009. The HSBC Purchasing Managers' index climbed to 56.1 for the month, compared to 55.7 in November.
Meanwhile, the ministry of knowledge economy said on 1 January 2010 that South Korean exports increased 33.7% in December from a year earlier, the fastest pace in 17 months.
Singapore’s trade ministry said that the economy contracted an annualised 6.8% in the fourth quarter to December from the previous three months after climbing a revised 14.9% from July to September.
On Thursday, 31 December 2009, the Dow Jones Industrial Average fell 120 points while the S&P 500 and the Nasdaq Composite index were down 11 points and 22 points respectively. US markets remained closed on Friday, 1 January 2010, on account of the New Year holiday.
In premarket trading, the Dow was trading 67 points higher.