The Indian stock market gained for the fourth consecutive session on Monday, on the back of strong global cues and prime minister Manmohan Singh’s assurance on Sunday that financial reforms would be accelerated and the government’s economic stimulus measures would continue into the next fiscal year. The Sensex closed at 16,499, gaining 340 points, while the Nifty rose 102 points to 4,898.

Banking stocks were among the top gainers on Monday as the prime minister asserted that growth in the next fiscal year, assuming a normal monsoon season, was expected to be more than 7.0% compared with a 6.5% forecast for the current year. State Bank of India (SBI) rose 5%. Bank of Baroda (BoB) and Punjab National Bank (PNB) were up 3% and 2%, respectively, on news that they have entered into an agreement with T Rowe Price to sell a 6.5% holding each in UTI Asset Management Company and UTI Trustee Company.

Sensex heavyweight Reliance Industries (RIL) was up 3% on reports that the firm is planning to acquire some of the assets of US petrochemical major LyondellBasell, which is undergoing reorganisation under the protection of a US court.

Telecom stocks fell on worries that the ongoing price war would result in a sharp fall in revenues and profits. Reliance Communications was down 2% while Bharti Airtel declined 4% after chairman Sunil Mittal told the media that the company was not actively seeking acquisitions, after talks for a tie-up with South Africa’s MTN collapsed recently.

On Sunday, the prime minister had stated that the government would push through legislative changes in the insurance sector to attract more foreign investment. He added that the government would push through stake sales in profitable state-run firms, implement measures to deepen the corporate bond market, strengthen the insurance and pensions sectors and improve the futures market for better price discovery and regulation.

By December 2009, the government plans to introduce bills proposing to raise the foreign stake limit in insurance companies to 49% from the present 26% and to open up the pension sector to private and foreign firms. It will also propose a law to cut its holding in top lender State Bank of India to 51%.

The timing of the withdrawal of the economic stimulus measures would be decided when it becomes clear the economy is recovering, but there will be no fresh stimulus, finance minister Pranab Mukherjee said on Sunday.

Asian markets ended in the green on Monday on strong global cues. The key benchmark indices in China, Hong Kong, Japan, South Korea, Singapore and Taiwan were up by between 0.28%-2.25%. Praising China’s economic performance in the past year during the global financial crisis, Moody’s Investors Service raised the outlook on China’s A1 rating to positive from stable. The agency said the country’s strong credit fundamentals would resume its improving trend as the economy emerged from the effects of the global recession.

A Short Rally
After two weeks of decline, last week the market was up after a slew of good news hit the market. On Tuesday 3 November 2009 the Sensex declined a massive 491 points ending the day at 15,405 while the Nifty ended at 4,564, 148 points lower. Weakness in global markets weighed down on Indian stocks but the stock that was really the culprit in pulling the market down was the index heavyweight Reliance Industries (RIL). Real estate stocks continued to sell off sharply.

The economy, however, continues to show strength. The HSBC Markit Purchasing Managers’ Index (PMI), based on a survey of 500 Indian companies, fell marginally to 54.5 in October 2009 from 55 in September 2009. A reading above 50 means activity expanded during the month.

On Wednesday 4 November 2009 the Sensex gained a massive 507 points ending the day at 15,913 while the Nifty ended the day at 4711, 147 points higher. Finance minister Pranab Mukherjee’s comments that there are no immediate plans to place curbs on capital inflows and fresh buying by investors following six days of sharp market decline triggered the massive rally. It was also helped by stable Western markets overnight.

The HSBC Markit Business Activity Index, based on a survey of 400 firms, rose to a 13-month high of 56.78 in October 2009 after having dropped to a three-month low of 54.37 in September 2009. The index has been above 50, which separates expansion from contraction, for six months. It had hit a trough of 40.3 in February 2009.

On Thursday 5 November 2009 the bourses slid lower in early trade as Asian markets (except China) were weak. However, the key benchmark indices staged a solid rebound in the afternoon. During the day the Sensex ended the day at 16,064, closing 152 points higher from the previous day’s close while the Nifty closed 55 points higher at 4,766.

Telecom stocks surged on reports that the Department of Telecom (DoT) will seek a fast-track approval from the finance ministry to slash the annual licence fee by up to a third for telecom operators with a large network. Reports also suggested that it will propose to the finance ministry that all licence fees be exempted for landline services.

During the trading hours the Union Cabinet decided that state-run firms with a track record of profits in the past three years should be listed on the stock exchanges. Union home minister P Chidambaram commented that profitable listed state-run firms should have 10% of shares listed on the stock exchanges. He also said that there were a large number of Central undertakings identified by the department of disinvestment for sale of equity.

On Friday 6 November 2009 the Indian markets remained green on strong global cues. At the end of the day the Sensex closed at 16,158, gaining 94 points from the previous day’s close while the Nifty closed at 4,796, 30 points up. At one point of time in the morning the Sensex was up 220 points before a selloff took the index to a low of 16,075 during the day. As per media reports the government is expected to consider a proposal to allow foreign airlines to pick up to 49% equity in Indian carriers, despite stiff opposition from the country’s largest private airline Jet Airways. Currently, the government allows 49% foreign direct investment in domestic carriers but bars foreign airlines from holding any stake directly or indirectly.

The Reserve Bank of Australia more than tripled this year’s growth forecast to 1.75% from 0.5% it predicted in August, and raised its 2010 forecast to 3.25% from 2.25%. The United States on Thursday slapped preliminary anti-dumping duties ranging up to 99% on $2.63 billion in Chinese-made pipes used in the oil and gas industry, which is the biggest US trade action against China. The US Labour Department announced that productivity surged at a 9.5% annual rate as companies squeezed more output from a smaller pool of labour to hold the line on costs. They also reported that initial claims for state unemployment benefits dropped to 512,000 in the week ended October 31, the lowest level since early January. Markets had expected a decline to only 523,000, from the 530,000 reported in the prior week.

We expect the market to remain in a broad trading zone of 15500-17000. The current uptrend can take the Sensex to 16600 and then to 17,000 after which a new downturn may start.

Stock markets gain for the third day
The Indian markets remained green on strong global cues. During the day Asian markets shot up on reports that Australia’s central bank more than tripled its economic-growth forecast while US unemployment claims and worker productivity beat estimates.

The key benchmark indices in China, Hong Kong, Japan, South Korea, Singapore and Taiwan rose by between 0.28% – 1.63%. At the end of the day the Sensex closed at 16,158, gaining 94 points from the previous day’s close while the Nifty closed at 4,796, 30 points up. At one point of time in the morning the Sensex was up 220 points before a selloff took the index to a low of 16,075 during the day. On Thursday the Dow Jones Industrial Average was up 204 points to close above 10,006 while the S&P 500 Index and the Nasdaq Composite Index were up 20 points, and 50 points.

The US market was up as the Labour Department announced that productivity surged at a 9.5% annual rate as companies squeezed more output from a smaller pool of labour to hold the line on costs. They also reported that initial claims for state unemployment benefits dropped to 512,000 in the week ended October 31, the lowest level since early January. Markets had expected a decline to only 523,000, from the 530,000 reported in the prior week.

During the day, IT stocks remained red on fears of rupee appreciation affecting their operating profit margins. TCS was down 1% while Infosys remained flat. Garware Offshore Services was up 2% after the company’s platform vessel, M V Mana, won a two-year contract worth approximately Rs22.50 crore a year in the North Sea, from an exploration and production company.

Mangalam Timber Products shot up 7% after one of the promoter group companies hiked its stake in the firm while Indiabulls Power rose 6% on reports that Morgan Stanley had acquired 21 lakh shares of the company. The stock continues to trade below issue price. Fedders Lloyd jumped 5% on securing an export order worth Rs52 crore from Ethiopian Electric Corporation (EEPCO), Ethiopia, towards supply of power distribution material. Aurobindo Pharma was up 1%, after the company received approval from the US Food & Drug Administration for Lamotrigine tablets in 5 milligram and 25 milligram strengths.

Steel stocks rose on reports that major steel producers have posted strong sales volumes for the month of October 2009. Steel Authority of India (SAIL) which has posted 28% growth in saleable steel volumes to 0.85 million tonnes in October 2009 over the corresponding period rose 1% while Tata Steel, rose 3% after it announced that steel sales at its Indian operations rose 38% to 4,62,000 tonnes in October 2009 over the corresponding period. However, JSW Steel fell 2%.

As per media reports the government is expected to consider a proposal to allow foreign airlines to pick up to 49% equity in Indian carriers, despite stiff opposition from the country’s largest private airline Jet Airways. Currently, the government allows 49% foreign direct investment in domestic carriers but bars foreign airlines from holding any stake directly or indirectly.

The United States on Thursday slapped preliminary anti-dumping duties ranging up to 99% on $2.63 billion in Chinese-made pipes used in the oil and gas industry, which is the biggest US trade action against China. However, China’s ministry of commerce commented that it would protect its industry’s interests and accused Washington of double-standards in denouncing new US anti-dumping duties imposed shortly before a visit by President Barack Obama to Asia on a trip that includes stops in Shanghai and Beijing. The US non-farm payrolls report due later today may show 175,000 jobs cut in October 2009. The unemployment rate is tipped to rise from 9.8% to 9.9%. In the premarket trading, the Dow Jones is trading 16 points higher.

Markets rebound in late trade
The bourses slid lower in early trade as Asian markets (except China) were weak. On Wednesday the Dow Jones Industrial Average was up 30 points, to 9,802 while the S&P 500 index rose one point to 1,047 after falling sharply from the high of the day. However, the key benchmark indices staged a solid rebound in the afternoon. During the day the Sensex ended the day at 16,064 closing 152 higher from the previous day’s close while the Nifty closed 55 points higher at 4,766.

Telecom stocks surged on reports that the Department of Telecom (DoT) will seek a fast-track approval from the finance ministry to slash the annual licence fee by up to a third for telecom operators with a large network. Reports also suggested that it will propose to the finance ministry that all licence fees be exempted for landline services. Bharti Airtel, Idea Cellular and Reliance Communications were up by 5% each.

During the trading hours the Union Cabinet decided that state-run firms with a track record of profits in the past three years should be listed on the stock exchanges. Union home minister P Chidambaram commented that profitable listed state-run firms should have 10% of shares listed on the stock exchanges. He also said that there were a large number of Central undertakings identified by the department of disinvestment for sale of equity.

The government also decided that proceeds from the divestment of equity in state-run firms can be directly used for capital expenditure on social sector programmes, rather than routing it through the National Investment Fund. Out of 419 public sector firms under the Central government, 51 are listed. To qualify for divestment and listing, a state-run company should have a positive net worth, no accumulated losses and have made net profits for the past three consecutive years.

Meanwhile, the government has raised the price it will pay to farmers to buy new season wheat to Rs1,100 per 100 kilograms, Mr Chidambaram said. The government paid farmers Rs1,080 per 100 kg for the 2009 harvest. The government said it will release monthly wholesale price index (WPI) for October 2009 on 12 November 2009 and there will be no more weekly headline inflation data. It said food article index rose 13.39% and the primary articles index rose 8.94% in the year to 24 October 2009. The fuel price index fell 6.2%.

Asian stocks remained negative during the day as key benchmark indices in Hong Kong, Japan, South Korea, Singapore and Taiwan fell by between 0.63%-1.75%. China’s Shanghai Composite rose 0.85%. According to the ISM, the gauge of the services sector dropped to 50.6 in October from 50.9 in September. In premarket trading, the Dow Jones is trading five points lower. The Bank of England has maintained its key interest rate at a record low of 0.5%.

The market returns to black with a big bang
Sensex and Nifty recover their entire massive losses of yesterday and look to gain more tomorrow

During the day the Sensex gained a massive 507 points ending the day at 15,913 while the Nifty ended the day at 4711, 147 points higher. Finance minister Pranab Mukherjee’s comments on Tuesday, 3 November 2009 that there are no immediate plans to place curbs on capital inflows and fresh buying by investors following six days of sharp market decline triggered the massive rally. It was also helped by stable Western markets overnight.

Jaiprakash Associates (JAL) was the major gainer among the Sensex 30 stocks. It surged 9% on reports that its subsidiary Jaypee Infratech (JIL) is preparing to raise Rs2,500-Rs3,000 crore through an initial share sale. JAL is eyeing a valuation of Rs20,000-Rs25,000 crore and expects to divest 10%-15% in JIL through the public offer. Meanwhile, JAL’s cement shipments rose 41.3% to 0.816 million tonnes in October 2009 over the corresponding period.

Auto stocks rose on the back of strong growth in sales. Maruti Suzuki India was up 3% while Mahindra & Mahindra and Tata Motors surged 4% and 3% respectively. Chambal Fertilizers & Chemicals gained 3% during the day on reports that one of the promoter group companies had hiked stake in the firm.

Mahindra Satyam jumped 4% after the company won an IT outsourcing contract from Swedish defence and aerospace firm, SAAB, to develop solutions in India for the global defence and homeland security market.

The HSBC Markit Business Activity Index, based on a survey of 400 firms, rose to a 13-month peak of 56.78 in October 2009 after having dropped to a three-month low of 54.37 in September 2009. The index has been above 50, which separates expansion from contraction, for six months. It had hit a trough of 40.3 in February 2009. The business expectations sub-index recorded its fastest expansion since March 2008, at 79.47 in October 2009, compared with 74.82 in September 2009.

The Planning Commission expects India’s economy to expand by 6.3% in the year to March 2010 and wholesale price inflation to go beyond 4-5% by end of March 2010. All Asian markets traded higher during the day. Key benchmark indices in Japan, China, Hong Kong, Singapore, South Korea, and Taiwan were up by between 0.42% and 1.97%.

The final Markit euro-zone composite purchasing managers’ index rose to 53 in October 2009, the fastest pace since December 2007 from 51.1 in September 2009, matching a preliminary estimate. The World Bank today raised its forecasts for Chinese growth this year and projected a slightly faster pace of expansion in 2010. Gross domestic product will increase 8.4% this year and 8.7% in 2010 on the back of massive fiscal and monetary stimulus, the bank said. However it also said that Beijing did not need to embark on major policy tightening at this stage.

In the US markets the Dow Jones industrial average was down 18 points while the S&P 500 index and the Nasdaq Composite index added three points and eight points respectively. The market saw mixed reaction as caution prevailed before a Federal Reserve statement on interest rates and the economy. According to US economic data, factory orders rose 0.9% in September 2009, after a 0.8% drop in August 2009. Economists were expecting a gain of 1%. However on Wednesday, in premarket trading, Dow futures was trading up 62 points. There is speculation that the Fed policy makers will keep borrowing cost low to sustain growth.

Market crashes for the sixth day in a row
The Sensex has lost 2,000 points from its 17 October 2009 peak and is slated for further decline tomorrow

During the day the Sensex declined a massive 491 points from the close of Friday 30 October, ending the day at 15,405 while the Nifty ended the day at 4,564, 148 points lower. Weakness in global markets weighed down on Indian stocks but the stock that was really the culprit in pulling the market down was the index heavyweight Reliance Industries (RIL).

RIL slumped 6% on reports that the Comptroller and Auditor General (CAG) has set up a team to examine the expenses RIL incurred on its D6 natural gas field in the Krishna-Godavari (KG) basin in the Bay of Bengal.

Real estate stocks continued to sell off sharply. DLF tumbled 9% to Rs337. Last week, the Reserve Bank of India in its monetary policy review meet on 27 October 2009 raised the provisioning requirements for loans to commercial real estate from 0.4% to 1%. On the positive side, India’s largest cellular services provider Bharti Airtel jumped 3% to Rs300 after a sharp recent slide, as value investors moved in to buy following the news that Singapore Telecom will increase its stake in Bharti.

The HSBC Markit Purchasing Managers’ Index (PMI), based on a survey of 500 Indian companies, fell marginally to 54.5 in October 2009 from 55 in September 2009. A reading above 50 means activity expanded during the month.

As per media reports G Bhujabal, economic advisor in the ministry of commerce and industry, expects declining trend of exports reversing by December 2009 or January 2010. Exports declined 13.8% in September 2009 to $13.6 billion. Exports fell 28.5% in the April 2009-September 2009 period to $77.9 billion.

During the day most Asian stocks fell. Key benchmark indices in Hong Kong, Singapore, Taiwan, and South Korea were down by between 0.17%-1.76% respectively. However, China’s Shanghai Composite index rose for two days in a row on the back of strong PMI data. Japanese markets were closed today for a national holiday.

Elsewhere in Asia, Australia’s central bank raised its key policy rate for a second month in a row, hiking it by a quarter of a percentage point to 3.50%, as expected.

At Wall Street on Monday, 2 November 2009, the Dow Jones industrial average gained 77 points, closing the day at 9,789 while the S&P 500 index and the Nasdaq Composite index ended the day at 1,043 and 2,049 respectively as manufacturing expanded more than expected last month. But the market was slated to swoon again on Tuesday, after a fresh set of poor economic news hit the global market. Royal Bank of Scotland Group Plc and Lloyds Banking Group Plc will receive 31.3 billion pounds ($51 billion) in a second bailout from UK taxpayers.

A Pull Back?
On Monday 26 October 2009 the Sensex declined 70 points from Friday 23 October 2009’s close ending the day at 16,741. The next day, the fall was even bigger. The index crashed by 387 points ending the day at 16,353 after the Reserve Bank of India (RBI) suggested that it may withdraw emergency liquidity support measures that were implemented in the aftermath of the global financial crisis.

The central bank warned of possible asset price bubbles, raised banks provisioning requirements for commercial real estate loans and lifted inflation forecast. Bank stocks declined as the RBI did not relax mark-to-market rules for bank’s debt holdings. Another trigger for the sharp slide in banking stocks was the central bank’s decision to streamline provisioning requirement on non-performing assets. The RBI asked banks to ensure by September 2010 that the total provisioning coverage against non-performing or bad loans aren’t less than 70% of the outstanding amount.

The RBI kept its benchmark lending and borrowing rates on hold at a quarterly monetary policy review on Tuesday. It also kept steady cash reserve ratio (CRR) at 5% but raised the statutory liquidity ratio to 25% from 24% with effect from 7 November 2009. Funds in CRR fetch no return for banks, while returns from SLR are small. The RBI forecasted 2009-2010 GDP at 6% with upside bias and raised inflation projection to 6.5% with an upside bias at end March 2010 from earlier 5%.

Effective immediately, the RBI ended a special repurchase facility for banks and another for the funding needs of non-banking financial companies, mutual funds and housing finance companies. It also ended a forex swap facility for banks, and cut an export credit refinance facility to a pre-crisis level of 15% from 50% with immediate effect. On Wednesday 28 October 2009 the Sensex declined 128 points from the day’s high of 16,411 ending the day at 16,283.

Meanwhile, the latest economic data showed infrastructure sector output grew 4% in September 2009 from a year earlier, slower than upwardly revised annual growth of 7.8% in August 2009. The infrastructure sector accounts for 26.7% of the industrial output. During April-September, the first half of the 2009-2010 year, output rose 5% compared with 3.4% in the same period in 2008-2009. On Thursday 29 October 2009 the Sensex declined 231 points from the previous day’s close ending the day at 16,053. On Friday the decline continued. Indeed, on that day, the Sensex declined a massive 464 points from the day’s high of 16,361 ending the day at 15,896, despite the fact that all Asian markets were higher on Friday and the US market was sharply up on Thursday. The US gross domestic product (GDP) grew at 3.5% in Q3 September 2009. This was the fastest pace in GDP growth for the US economy since the third quarter of 2007.

According to the government data, exports declined by 13.8% to $13.6 billion in September 2009 over September 2008. The fall in exports in September 2009 was the least in the current financial year, showing gradual signs of recovery in the country’s export sector. Commerce secretary Rahul Khullar said exports are likely to touch $165-$175 billion during 2009-2010 if the current trend continues. The country had exported goods worth more than $168 billion during 2008-2009. Indiabulls Power, the newly listed IPO settled at Rs39.25, a 12.80% decline over the initial public offer price of Rs45. The decline that everyone was expecting has come about quite sharply. The Sensex has broken through various support levels and will possibly stabilise at around 15,500.

Under pressure
We were expecting more gains given the way the market closed the previous Friday but the week saw the market coming under pressure for a variety of reasons. On Tuesday 20 October 2009 the Sensex declined 103 points, ending the day at 17,223. A correction has started which will take the Sensex to 16,600 and then further to 16,000.

Trade minister Anand Sharma said on Monday the Union Cabinet had approved a 5% stake sale in NTPC, and 10% in, an unlisted power firm Satluj Jal Vidyut Nigam. Finance secretary Ashok Chawla said the Reserve Bank of India (RBI) would hopefully continue its current easy monetary stance when it reviews policy later this month as it was justified for the present economic scenario.

Chinese vice premier, Li Keqiang, was quoted as saying that China’s economy is growing faster with every month and its overall recovery is improving. However Federal Reserve chairman Ben Bernanke warned on Monday that Asian export-promotion policies and large US budget deficits could refuel global economic imbalances and put efforts to achieve more durable growth at risk if not curbed.

According to Hedge Fund Research Inc, hedge funds attracted $1.1 billion from investors in the third quarter ended September 2009, ending a one-year streak of net withdrawals. More than two-thirds of hedge funds experienced inflows in the quarter. Fund tracker EPFR Global had quoted that emerging-market equity fund inflows surged in the second week of October 2009 on improving US earnings and China’s trade figures which signal increased demand for commodities. Heavy inflows were seen in funds specialized in BRIC countries — Brazil, Russia, India and China. Asia ex-Japan funds received $823 million in the week ended 14 October 2009.

On Wednesday 21 October 2009 the Sensex shed 214 points ending the day at 17,009 while on Thursday 22 October 2009 the Sensex breached the 17,000 barrier by plunging another 219 points to close at 16,770. On Friday the market was flat.

Govinda Rao, a member of the prime minister’s economic advisory council said the government may collect Rs4 lakh crore as direct tax for the current fiscal year ending March 2010. There is an unexpected increase in recent direct tax collections, he said. Commenting on fuel price Govinda Rao said there is no need to raise fuel prices, if global oil prices remain in the range of $70 to $75 a barrel. He said the government expects international crude oil prices to hover around $70 to $75 per barrel.

According to a survey by Hewitt Associates, base salary levels in India are poised to jump nearly 10% in 2010 as the Asian region continues to rebound from global recession. Salaries in Indonesia and China will also rise by 8.7% and 6.7% respectively, according to the survey. The survey covered more than 2,000 local and joint-venture companies in the Asia-Pacific region.

According to automobile sales figures released by the Society of Indian Automobile Manufacturers (Siam), total domestic automobile sales in the country in the first half of the financial year 2009-2010 rose by 14.51% year-on-year to 57,82,920 units. The jump in sales for the April-September period came from the double-digit growth posted by the passenger vehicle segment (comprising cars and sports utility vehicles) which grew by 13.46%, by the 15.68% spurt in two-wheeler sales and by an increase of 12.37% in sales of three-wheelers.

A committee headed by RBI executive director Deepak Mohanty has suggested discontinuing the usage of a bank’s prime lending rate (PLR) as the benchmark for variable rate loans. Instead, it wants banks to arrive at a base rate that reflects the cost of one-year deposits and price loans over this base rate. The panel has also proposed a ceiling on the extent of loans that can be granted below the benchmark rate. Most banks typically pass on the benefit of falling rates only to fresh customers. RBI governor D Subbarao has repeatedly said though the central bank has slashed its repo rate (at which it lends to banks) by 425 basis points in the last one year, prime lending rates of banks have fallen by only around 200 basis points.

Lenders currently offer loans at less than the benchmark prime lending rate to about 10 categories of borrowers, according to the central bank. Some of these loans are at rates that don’t ‘make much commercial sense for the banks, according to the report.

Meanwhile, the central bank may hike the ceiling on the portion of government securities that banks can park in held-to-maturity (HTM) category, possibly at a quarterly monetary policy review on 27 October 2009. Banks do not have to make any mark-to-market provisions on securities held this basket if prices of securities fall. Provisions have to be made out of profit and therefore, impact a bank’s bottom line. Yields on ten-year government bonds have risen sharply this year. Bond prices and bond yields are inversely related. Indian banks can put bonds equal to 25% of the value of deposits in their HTM accounts. The market expects an increase in the ceiling by up to 2% points.

China’s gross domestic product expanded 8.9% in the third quarter compared to the same period a year ago, according to data released by the National Bureau of Statistics. The increase was greater than the 7.9% expansion in the second quarter. In other figures, urban fixed-asset investment in China rose 33.3% in the first three quarters, edging up from 33% growth in the first eight months of the year. Industrial production in September rose 13.9% on year, higher than expectations of a 13.3% rise and above August’s 12.3% gain. For the first nine month of the year industrial production rose 8.7%.

On Friday 23 October 2009 the Sensex declined 196 points from the days high of 17,006 finally ending the day at 16,811. The Securities and Exchange Board of India has allowed stock exchanges to set their trading hours between 9:00 IST and 17:00 IST.

More Gains
On Monday, the Sensex gained a massive 384 points from Friday 9 October 2009 close ending the day at 17,027 on optimism about a patch-up between the warring Ambani brothers and on better-than-expected industrial output data for August 2009. The stock market remained closed on Tuesday, 13 October 2009, on account of Assembly elections in Maharashtra. Industrial production (IIP) rose a robust 10.4% in August 2009, government data showed. It is the fastest pace of growth in 22 months. Manufacturing output rose 10.2%. The government revised upwards industrial production growth for July 2009 to 7.2% from an earlier estimated 6.8%.

China’s economy is likely to grow by 8.3% and expansion could hit 9% next year, a leading state think-tank said, adding to signals the government is confident of meeting its growth target for 2009. In its latest quarterly report on the economy, the Chinese Academy of Social Sciences said that if the world financial crisis does not worsen next year and China avoids major natural disasters, the nation’s GDP growth could reach 9% in 2010, the China Securities Journal reported.

Meanwhile, the government of Singapore sharply upgraded its economic outlook for 2009, as it now expects the economy to contract by just 2.5% to 2% from the previous year – a sharp improvement over its previous forecast of a decline of 6% to 4%’but remained cautious about a full-scale recovery. In economic data, US trade balance unexpectedly dropped to $30.71 billion in August 2009. On Wednesday 14 October 2009 the Sensex gained further 204 points from Monday’s close ending the day at 17,231.

C Rangarajan, chairman of the prime minister’s Economic Advisory Council, said the Reserve Bank of India is unlikely to revise benchmark interest rates when it reviews monetary policy later this month. RBI holds its quarterly policy review on 27 October 2009. He said the economy would grow 6%-6.5% with an upward bias in the year to March 31, 2010. Rangarajan forecast inflation to touch 5%-6% by then. He said that the Reserve Bank of India can continue with its present easy monetary stance as long as inflationary pressures are moderate. He also said the central bank would first have to stop injecting liquidity, and then consider draining off excess cash.

Meanwhile industrial production in the 16-nation euro zone rose by a weaker-than-expected 0.9% in August compared to July, the statistics agency Eurostat reported. Compared to the same month last year, production was down 15.4%. Economists had forecast a 1.1% monthly rise, while the year-on-year figure was in line with forecasts. China’s exports declined at the slowest pace in nine months, helping government efforts to sustain the recovery in the world’s third-biggest economy. Shipments dropped 15.2% in September 2009 from a year earlier, the customs bureau said compared with a 23.4% slide in August 2009. On Thursday 15 October 2009 the Sensex declined 155 points from the days high of 17,350 finally ending the day at 17,195.

Inflation based on the wholesale price index (WPI) rose 0.92% in 12 months to 3 October 2009, slightly above previous week’s annual rise of 0.7%, data released by the government showed. Within the WPI, the food articles index rose 13.34%. Meanwhile, the government revised upwards inflation for the year through 8 August 2009 to a much smaller decline of 0.37% from an estimated fall of 1.53%.

Prime Minister Manmohan Singh said the government is encouraging the listing of public sector enterprises on the stock markets as this will unlock the true value of companies, improve their corporate governance standards and help them raise resources for future expansion. He said the government would try to restructure and revive loss-making PSUs.

Meanwhile, the IPO of Indiabulls Power was subscribed 21.83 times. Indiabulls Power, a unit of Mumbai-based developer Indiabulls Real Estate, is developing five thermal power plants in western and central India, with total capacity of 6,600 megawatts. The company has allotted 6.11 crore shares to anchor investors at Rs45 per share, at the top end of the Rs40 to Rs45 price band for the IPO. On Friday 16 October 2009 the Sensex closed 128 points higher ending the day at 17,323.

Emerging-market equity fund inflows surged in the second week of October 2009 on optimism over improving US earnings and China’s trade figures signal increased demand for commodities, fund tracker EPFR Global said. Heavy inflows were seen in funds specialized in BRIC countries’Brazil, Russia, India and China. Asia ex-Japan funds received $823 million in the week ended 14 October 2009.

The water level in main reservoirs rose three percentage points to 63% of capacity in the week to Thursday as unseasonal rain filled the tanks to levels closer to normal, government data showed. Over the last 10 years, water levels in India’s 81 main reservoirs have on average been steady at 67% for three consecutive weeks at this time of the year. Reservoirs are important for hydropower, which account for a quarter of India’s generation capacity. They also provide water to irrigate winter crops such as wheat and rapeseed. A special one hour Muhurat trading session will be held on 17 October 2009. The market remains closed on Monday, 19 October 2009 on account of Diwali .

Last week we had suggested that the market would rally on Monday; it did so and continued rallying. We may see the rally to continue as the market is currently on a strong upward trend.

Trade the Range
Last week we had suggested that we still believe that it is right to be cautious; no fresh commitments are advisable. A close below 4,900 would suggest a reversal. The market dipped quite a bit last week. The Sensex was down 492 points and Nifty 138 points.

Among the biggest losers were telecom shares following a 50p call offer by Reliance which will hurt all operators and also reports that the Telecom Regulatory Authority of India (TRAI) will make the per second billing a mandatory tariff option for all operators. On Monday 5 October 2009 the Sensex declined 268 points from Thursday 1 October 2009’s close ending the day at 16,866.

According to planning commission deputy chairman Montek Singh Ahluwalia, India’s economy is likely to grow at 6.3% or more in the year to March 2010. He also added that annual inflation was likely to be around 5% by end-March 2009. India’s monsoon running between June 2009 to September 2009 was the worst since 1972 with cumulative seasonal rainfall for the country as a whole being 23% below the Long Period Average (LPA), the India Meteorological Department (IMD) said. The water level in the main reservoirs was at 60% of the capacity on Thursday, unchanged from a week ago and about 10% below the 10-year average following a poor monsoon, government data showed.

Telecom minister A Raja said the auction of airwaves to offer third-generation mobile services will be concluded by the end of the financial year, making it clear that the government will miss the 7 December 2009 date to hold the auctions originally scheduled for 2007. The DoT was slated to release the Information Memorandum (IM), a key document containing all details of the auction, including availability of radio frequencies across circles, policy changes, the rules of the auction and mode of payment among several other issues to all potential bidders by 29 September 2009, but has failed to do so. This has resulted in the 8 October 2009 deadline for submission of questions for pre-bid conference also being postponed. All other timelines, such as those for submission of bids and mock auctions, are also likely to be changed, which may push the December bid plan to early next year. ??On Tuesday 6 October 2009 the Sensex gained 92 points from the previous day’s close finally ending the day at 16,959. The Reserve Bank of India (RBI) governor D Subbarao said that while there was broad agreement that the Central bank needs to wind back some of its easy policy stance, there were risks if the move was mistimed. An early exit from the accommodative monetary stance on inflation concerns runs the risk of derailing the fragile growth, while a delayed exit may engender inflation expectations, he said. A surprise hike in interest rate by a quarter-point to 3.25% by Australia on Tuesday, 6 October 2009, eased pressure on the Reserve Bank of India from holding back on raising its own rates. The RBI may have to reverse its loose monetary policy if inflation surges. The Central bank has pumped huge liquidity into the system and drastically cut policy rates in the aftermath of the global financial crisis last year. The Australian Central bank said it was prudent to gradually take back policy accommodation since the worst danger for the economy had passed. Australia is the first G20 nation to raise rates since markets crashed after the failure of Lehman Brothers in September last year. On Wednesday 7 October 2009 the Sensex declined 314 points from the day’s high of 17,121 finally ending the day at 16,807. HDFC chairman Deepak Parekh during the trading hours said he expects the Central bank to raise interest rates in the March 2010 quarter on inflationary concerns. It would be a marginal, token hike, he said. Mr Ahluwalia said the economy may growth over 7% in 2010-2011. After trading hours a surprise bonus issue was announced by India’s biggest private sector firm by market capitalisation and oil refiner Reliance Industries (RIL).

On Thursday 8 October 2009 the Sensex ended the day closing at 16,844. Telecom stocks were under severe selling pressure after telecom regulator TRAI said telecom operators would be free to offer various tariff plans to their subscribers, including the per-second billing scheme, and they would also be free to fix the tariff per second.

Inflation based on the wholesale price index (WPI) rose 0.7% in the year through 26 September 2009, lower than the rise of 0.83% in the year through 19 September 2009, data released by the government showed. Food article index in the WPI was up sharply at 15.45%. Meanwhile, the government revised upwards inflation for the year through 1 August 2009 to a decline of 0.83% from an estimated fall of 1.74%. On Friday 9 October 2009 the Sensex declined a massive 201 points from the previous day’s close finally ending the day at 16,643. The market is slowly breaking down. It may rally on Monday on global cues but it won’t be sustained. A close below 16,600 will lead to a sharp decline.

Trade the Range
We have been cautious on the markets for the last few weeks but the market has headed higher. We still believe that it is right to be cautious; no fresh commitments are advisable. A close below 4,900 would suggest a reversal.

On Monday 28 September 2009 and Friday 2 October 2009 the Sensex remained closed on account of a public holiday and Gandhi Jayanti. On Tuesday 29 September 2009 the Sensex gained 160 points from Friday’s close finally ending the day at 16,583. Most of the traders refrained from building large positions this week because the week was shortened only to three days and banks were closed on Wednesday 30 September 2009.

Economic outlook continues to improve. The index of six core industries having a combined weight of 26.7% in the index of industrial production (IIP) registered a growth of 7.1% in August 2009 compared to a growth of 2.1% in August 2008. During April 2009-August 2009, six core industries registered a growth of 4.8% as against 3.3% during the corresponding period of the previous year. Coal and cement sector boosted overall growth in the six infrastructure industries in August 2009. According to V Sridhar, chairman, Central Board of Excise and Customs (CBEC), the excise duty collections were up 23% in August 2009 over July 2009. On Wednesday 30 September 2009 the Sensex surged further 274 points from the previous day’s close ending the day at 17,127 on hopes of a strong September 2009 quarter results of India Inc which would start from the second week of October 2009. A listing of Oil India at a premium of 8.62% over the initial offer price (IPO) of Rs1,050 also supported the market.

During the trading hours S Pradhan, the joint secretary of the department of disinvestment, Government of India, said the government plans to sell stakes in at least five state-run firms by the end of the fiscal year in March 2010 following successful IPOs of two firms that raised $1.8 billion.

Germany’s unemployment rate edged lower in September, surprising the market which was expecting an increase, the Federal Labor Office data showed. Germany’ s seasonally adjusted unemployment declined by 12,000 over the month, bringing the jobless rate to 8.2% from 8.3% in the previous month. Japanese manufacturers increased production for a sixth month in August, capping the longest stretch of gains in 12 years, as emergency spending by government’s worldwide rekindled global trade. Factory output rose 1.8% last month after climbing 2.1% in July, the Trade Ministry said. The HSBC Purchasing Managers Index, a gauge of China’s manufacturing activity indicated expansion for the sixth straight month in September, suggesting the rebound in industrial activity remains intact. The PMI’s employment conditions index, rose to 53 in September from 51.8 in August, its highest level in 25 months. As per media reports Chinese banks may have extended between 600 billion yuan ($87.88 billion) and 700 billion yuan worth of new loans in September 2009.

The US consumer confidence index dropped to 53.1 in September from 54.5 in August. Economists had expected the gauge to rise to 57. Meanwhile, the S&P/Case-Shiller home price report for July was better-than-expected. The report showed a 13.3% year-over-year decline, which was better than the 14.2% decline expected. Home prices continued to rebound, up for a third straight month in July, after a three-year slide.

On Thursday 1 October 2009 the Sensex remained highly volatile finally ending the day at 17,135, gaining 8 points from the previous day’s close. The HSBC Markit Purchasing Managers’ Index (PMI), based on a survey of 500 companies, surged 55 in September 2009 from a five-month low of 53.2 in August 2009. A reading above 50 shows expansion while below 50 reading denotes contraction. The new orders index rose to 58.3 in September 2009, from August’s 56.2, which was its lowest in four months. Inflation based on the wholesale price index rose 0.83% in the year through 22 September 2009, higher than previous week’s annual gain of 0.37%, government data showed. Exports fell 19.4% to $14.29 billion in August 2009 over August 2008, the government data showed as the global slump crimped demand for Indian goods. Imports dropped 32.4% to $22.66 billion in August 2009 over August 2008. India’s trade deficit shrunk to $8.37 billion in August 2009 from $15.79 billion a year earlier.

According to the final Markit euro-zone manufacturing purchasing managers index the rate of deterioration in the euro-zone factory sector continued to slow down in September 2009. The index rose to a 16-month high of 49.3 in September 2009 from 48.2 in August 2009 and exceeded a preliminary estimate of a rise to 49. A reading of less than 50 indicates a majority of managers saw a decline in activity, while a figure of more than 50 signals expansion. The index has been below the neutral 50 level for 16 consecutive months. The Chicago purchasing-manager’s index fell to 46.1 in September 2009 from 50 in August 2009 indicating a contraction. Also the jobs data report disappointed. US private employers cut 254,000 jobs from their payrolls in September 2009, more than expected but less than the revised 277,000 loss recorded in August 2009. Meanwhile, the US economy contracted at a 0.7% rate in the second quarter, less than the 1% plus decline expected.

Directionless, but limited downside
We mentioned last week that the market may rally but it is right to be cautious. Over the course of the week, the Sensex actually moved down from 16,741 to 16,674 even though it touched a new short-term high of 16,943. The market rallied on Tuesday by 145 points (Monday was a holiday) after a news agency quoted an unnamed finance ministry official as saying that corporate advance tax is expected to rise 14.7% to Rs44,010 crore in the September 2009 quarter. Higher advance tax payment indicates good Q2 September 2009 results from India Inc. The report also quoted an official as saying that he sees better growth in advance tax collection in the December 2009 quarter. The market sentiment also got a boost from reports that the stock market regulator is planning to simplify norms on foreign portfolio investments which could boost inflows from foreign institutional investors. Comments by the finance minister that the stimulus package would continue, also underpinned sentiment.

On Wednesday, 23 September 2009, the Sensex plunged 167 points from the previous day’s close finally ending the day at 16,720. One of the reasons was the huge fund raising by Jaiprakash Associates (promoters have raised nearly $250 million through the sale of treasury shares), Suzlon (promoters sold seven crore shares to raise about $142 million) and Cipla ($140 million by selling shares to institutional investors at Rs263.75 each).

As per reports, Indian companies plan to raise at least Rs40,000 crore through initial public offers (IPOs)/follow on public offers (FPOs) in the second half of the current financial year. Power companies such as GMR Energy, Indiabulls Power and JSW Energy and State-run Bharat Heavy Electricals and NTPC are likely to tap the primary market. Reliance Infratel also announced on Tuesday its intention to raise Rs5,000 crore from the primary market. A number of companies are also in the fray to raise funds by way of qualified institutional placement (QIP), reports suggest. This is another reason to be cautious about the market direction.

Meanwhile, Indian companies and individuals have also started borrowing from banks to build factories, buy cars and homes, taking advantage of low interest rates, another sign that economic growth may accelerate. The uptick is reflected in the latest data unveiled by the Reserve Bank of India. Bank loans aggregated Rs56,303 crore more in second quarter (July 2009-11 September 2009) compared to a drop of Rs7,456 crore in the April 2009-June 2009 quarter.

The Federal Reserve kept interest rates unchanged, as expected on Wednesday, but it also said the US central bank would slow purchases of mortgage debt. The move was seen as a step toward a measured withdrawal of its extraordinary support for the economy during the downturn. On Friday, 25 September 2009, the Sensex declined 88 points from previous day’s close finally ending the day at 16,693. Meanwhile, the market will remain closed for a public holiday on Monday, 28 September 2009 and again on Friday, 2 October 2009.

We expect the market to decline, but very reluctantly. Watch out for solid support at 16,200 and then at 16,000 from where we may see another rally. However, if there is a series of adverse news and the Sensex goes below 16,000 decisively, the current long rally would seem to be over. – Swapnil Suvarna

A Short Rally?
For the last two weeks we have been warning of a short decline but this has not come about. The market has in fact shot up and is now on the way to make higher highs. However, we suggest you hold your enthusiasm and refrain from making fresh commitments. There will be a chance to buy stocks cheaper.

On Monday 14 September 2009 the Sensex declined 50 points from the close of Friday 11th September finally ending the day at 16,214 whereas on Tuesday 15th September the Sensex gained 240 points to close at 16,454. The National Council of Applied Economic Research (NCAER) business confidence index jumped to 118.6 points in the June 2009 quarter, up 37 points from previous quarter, when it was at its the lowest level since February 1998. NCAER said that economic conditions are expected to improve in the coming months as the impact of the Union budget 2009-2010 begins to be felt. The increased government spending may provide some impetus to the domestic investment and consumption.

A Securities and Exchange Board of India (SEBI) panel has recommended rotation of audit partners, selection of the chief financial officer by a company’s audit committee and standardisation of earnings disclosure, in an attempt to prevent another accounting scandal such as Satyam Computer. The committee has also proposed that companies publish their balance sheets, which show the assets and liabilities, half yearly, against the present annual system. This would help investors know the company’s solvency position, instead of just the profitability which comes out in quarterly results. The committee has invited comments and suggestions from the public on these proposals before a final recommendation.

On Sunday, Beijing singled out US automotive and poultry product imports for investigation after the Obama administration decided to put steep import duties on Chinese tires. The Chinese commerce ministry said the US decision to impose added duty on Chinese-made tires is an abuse of World Trade Organization safeguard measures. It also said it would launch its own investigation into chicken parts and automotive imports from the United States. China’s securities regulator said it would start reviewing applications from companies seeking to list on the Growth Enterprise Market (GEM).

In US, the University of Michigan-Reuters gauge of consumer sentiment jumped higher than expected to 70.2 in a mid-September reading against a final reading of 65.7 in August 2009. Their outlook for the next year was the highest since September 2007. Among other economic data, wholesale inventories fell 1.4% to their lowest level in nearly three years in July 2009 and import prices spiked 2% last month.

On Wednesday 16 September 2009 the Sensex gained 223 points from the previous day’s close ending at 16,667 as the preliminary data showed a strong growth in advance tax payment by India Inc raising expectations of decent-to-strong September 2009 quarter results. As per reports, State Bank of India, India’s biggest commercial bank by branch network, has paid Rs1,838 crore in advance tax in the second instalment as against Rs1,500 crore paid in last year. HDFC Bank paid Rs425 crore advance tax against Rs315 crore last year but, ICICI Bank paid lower tax of Rs501 crore against Rs575 crore last year. Larsen & Toubro paid Rs210 crore as against Rs150 crore last year. Reliance Industries paid Rs1,157 crore in advance tax against Rs683 crore paid in last year. But, Tata Steel paid a sharply lower advance tax of Rs400 crore against Rs1,000 crore paid in last year. Software major TCS has reportedly paid Rs220 crore as against Rs81 crore. Tractor major Mahindra & Mahindra paid Rs112 crore as against Rs17.5 crore. Tata Motors paid advance tax of Rs130 crore in the second installment, much higher than Rs60 crore last year. Tata Power Company paid Rs75 crore as against Rs14 crore in last year.

US government reported that retail sales jumped 2.7% in August 2009, more than the 2% expected and at the fastest pace in three-and-half years. In other economic news, the August producer price index rose 1.7%, higher than economists’ expectations while core prices saw a 0.2% increase. On Thursday 17 September 2009 the Sensex closed at 16,711, 34 points higher from the previous day’s close.

Inflation based on the wholesale price index rose 0.12% in the year through 5 September 2009 compared to previous week’s annual decline of 0.12%. A surge in food price index was responsible for the rise in the headline inflation.

The cabinet extended limits on stocks that can be held by traders of sugar, vegetable oils, lentils and rice until September 2010. The move is aimed at keeping a lid on prices of those commodities.

Meanwhile, market expectations of strong September 2009 quarter results were tempered after a news agency quoted an unnamed government official as saying that the government expects only a marginal improvement in corporate advance tax in second quarter. Japan’s Bank of Japan (BoJ) held a key policy rate steady at 0.1% as expected. The BoJ also slightly upgraded its economic view for the first time since July 2009.

US industrial production rose 0.8% in August 2009, better than expected, and the data for the prior month was revised to a 1% gain double the 0.5% originally reported.

U.S. industrial production rose 0.8% for a second straight month in August 2009 after gaining 1% in July, reinforcing views the recession had ended.

On Friday 18 September 2009 the Sensex gained 30 points from the previous day’s close finally ending the day at 16,741. RBI deputy governor Shyamala Gopinath said it was too soon for the central bank to unwind its accommodative monetary policy even though the economy has shown signs of resilience while RBI deputy governor KC Chakrabarty said inflation based on wholesale prices could hit 6% by March 2010. After a strong revival since 15 August 2009, rains weakened again last week. The government-run India Meteorological Department (IMD) said the south west monsoon rains were 41% below average in the week to 16 September 2009. IMD also said the total rainfall since 1 June 2009, the start of the season, was 21% below average because of exceptionally dry spells earlier in the season. Meanwhile, the initial public offer (IPO) of the private sector ship builder, Pipavav Shipyard, was subscribed 6.64 times. The company said it has allotted 1.52 crore shares to anchor investors at the top-end of the Rs55-Rs60 price band.

As per reports, the government would release pay arrears to government employees under the second and final instalment ahead of big festivals in October 2009. The payout would boost consumer spending. China’s steel sector was hit hard by reports the United States might impose extra heavy duty on Chinese-made steel tubes, sparking fresh worries over a possible escalation of the Sino-US trade dispute. In US, the Philadelphia Fed said its manufacturing gauge rose to 14.1 in September 2009 from 4.2 in August 2009. This is its first back-to-back monthly gain since October and November of last year. Initial jobless claims unexpectedly fell last week, dropping by 5,000 coming in at 545,000. Continuing claims climbed to 6.23 million from 6.10 million. Another report showed housing starts and permits rose 1.5% and 2.7% respectively in August 2009 to their highest level since November 2008. – Swapnil Suvarna

Still Caution!
Last week we had said that the maket may go up but we have to be cautious. The market did go up but struggled quite a bit. A signifcant decline may still be round the corner. On Monday 7 September 2009 the Sensex gained 327 points from the Friday’s closing the day at 16,016 on strong response to the initial public offer of Oil India, an improvement in business confidence of India Inc and revival of monsoon rains. The government has fixed Rs950-1,050 per share price band for the initial public offering of Oil India (OIL), the second state-run firm to hit the market this year after NHPC, and will raise up to Rs2,777 crore.

Meanwhile, a survey to gauge business confidence sentiment, carried out by Federation of Indian Chambers of Commerce and Industry (FICCI), for the month of September 2009, suggested that the confidence level of India Inc is on the rise thanks to government’s fiscal stimulus measures. Some 80% of the companies believe that the Indian economy is on the road to recovery and expect improvement in corporate performance.

On Tuesday 8 September 2009 the Sensex gained 107 points closing the day at 16,124. The Minister of State for Finance Namo Narain Meena said that the government is committed to clear the Insurance Amendment Bill that seeks to bring in more foreign investments in the sector. Currently, foreign direct investment (FDI) in insurance is capped at 26% and the bill seeks to raise the FDI ceiling to 49%.

The Finance Ministry asked all government ministries and departments to cut expenses on domestic and foreign travel, publications, advertising and purchase of vehicles. The plan would see a 10% reduction in government’s non-plan expenditure, pegged at Rs6.9 lakh crore for the year to March 2010. Finance Minister Pranab Mukherjee said that a slowdown is likely in growth rate in the second and third quarters of the current fiscal due to lower agricultural growth.

Chanda Kochhar, managing director ICCI Bank, said that lending and borrowing rates in India have bottomed out and rates will harden from here on. Meanwhile, D Subbarao, RBI governor said that the central bank may have to reverse its easy money policy sooner than most other countries as inflationary pressures are mounting. India’s strong fundamentals, which helped drive its strong economic growth before the global financial crisis, remain intact and will accelerate any future upturn. The Reserve Bank of India (RBI) Deputy Governor K.C. Chakrabarty said that interest rates would not come down until banks lowered their rates. Rising rates would be bad for the stockmarket. On Wednesday 9 September 2009 the Sensex gained 60 points from Tuesday’s close ending the day at 16,184.

Meanwhile, car sales rose 26% to 120,669 units in August 2009 over August 2008 boosted by new launches and availability of cheaper loans. Sales of trucks and buses rose 18.5% to 40,624 units and motorcycle sales rose 26% to 611,173 units. On Thursday 10 September 2009 the Sensex declined 218 points from the day’s high of 16,435 ending the day at 16,217, up XX points. India’s exports declined the least in eight months in August 2009 as overseas sales of coal, rice and tobacco picked up, commerce secretary Rahul Khullar said. Merchandise shipments dropped 19.7% from a year earlier to $14.3 billion after sliding 28.4% in July 2009, Khullar said.

India’s industrial output in July 2009 grew 6.8% compared with 6.9% growth in the same month last year. The industrial output for the month of June 2009 was revised higher to 8.2%. Meanwhile, foreign direct investment (FDI) flows into India in July 2009 were up 56 % from the same month in 2008. FDI flows into India were $3.5 billion in July, up from $2.25 billion a year earlier, Trade Minister Anand Sharma said. On Friday 11 September 2009 the Sensex gained 47 points from the previous day’s close finally closing the day at 16,264.