Sideways movement to continue

Indian investors continued to stay cautious ahead of the Union Budget as share prices slumped towards the end of the day

Indian markets moved sideways throughout the day as railway minister Mamata Banerjee announced a populist railway Budget for 2010-2011. However, the market slumped towards the end of the day. The market sentiment continued to remain cautious ahead of the Economic Survey and the Union Budget 2010-11 which will be tabled in Parliament on 25 February 2010 and 26 February 2010, respectively. The Sensex declined 30 points from the previous day’s close to 16,256 while the Nifty closed at 4,859, down 11 points. The market is expected to remain highly volatile tomorrow with the focus being on the derivatives expiry.

Rollover in Nifty futures from February 2010 series to March 2010 series stood at about 35% at the end of Tuesday’s trading. Rollover in Mini Nifty futures was about 32% and the market-wide rollover was about 43%. The trend will stay sideways until the Union Budget is tabled in Parliament.

At 12:00 hrs IST, the Sensex was trading down six points from the previous day’s close at 16,281; but at 14:00 hrs IST, the Sensex was trading at 16,294, up eight points.

At the end of the day, index heavyweight Reliance Industries (RIL) remained flat after petroleum minister Murli Deora reportedly stated on Tuesday that oil and natural gas producers, including RIL, need not share the marketing margin they charge from their clients with the government.

Parenteral Drugs (India) gained 3% after the company signed a pact with a Kenyan firm to form a joint venture company for manufacture and supply of pharmaceutical formulations for the entire African continent McNally Bharat Engineering Company bagged an order worth Rs5.80 crore. The stock was down 1%.

Gateway Distriparks gained 1% after a foreign fund bought 0.59% stake in the logistics firm.

REpower Systems AG, a subsidiary of Suzlon Energy, and French company Akuo Energy SAS have signed three agreements for the supply of 25 wind turbines. The Suzlon stock was down 1%.

Mamata Banerjee kept passenger fares as well as freight rates unchanged in the Railway Budget presented today. The freight rate for foodgrains and kerosene was cut by Rs100 per wagon. The railway minister said that the service charge on air-conditioned fares will be cut. Ms Banerjee said the time was ripe for private partnership in Indian Railways, but clarified that the railways would not be privatised. She said that clearance to private investment would be provided within 100 days to speed up projects. Ms Banerjee appealed to business houses to join hands for building partnerships with the Railways. She said a special task force will be set up for early clearance of projects. She added that the need of the hour was to invite domestic investments through public-private partnership.

During the day, Asia’s key benchmark indices in Hong Kong, Japan, Indonesia, South Korea, Singapore and Taiwan fell by 0.56%-1.48%, while China rose 1.33%.

As per media reports, Japan’s shipments abroad advanced 40.9% from a year earlier, the biggest increase since February 1980.

On Tuesday 23 February 2010, in the US markets, the Dow Jones Industrial Average was down 101 points while the S&P500 and the Nasdaq Composite declined 13 points and 29 points, respectively.

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