Indices seen extending rally

Key local benchmark indices are set to extend yesterday’s, 13 October 2008 rally as governments all over the world came to rescue credit crisis, pouring cash into the financial system. Markets across the globe welcomed this move with US markets staging the biggest single-day stock rally since the Great Depression, 1929. Japan's Nikkei surged over 13%.

On Monday, 13 October 2008, the US government agreed to take $25 billion stakes in several big banks in a bid to shore up the banking system and arrest the financial crisis. The move follows pledges by the governments of Britain, Germany, France and other European countries of more than 1 trillion euros to bolster their own banks.

Further, the Bush administration is reportedly expected to notify Congress that it intends to use the next $100 billion available to it under the $700 billion market rescue plan passed by Congress earlier this month.

US markets surged on Monday, 13 October 2008 cheered by the government’s plan to buy stakes in banks and a Federal Reserve-led push to flood the global financial system with dollars. The Dow Jones industrial average snapped an eight-day losing streak, surging 936.42 points, or 11.08%, to 9,387.61. The Nasdaq Composite jumped 194.74 points, or 11.81% to 1,844.25 and the broader S&P 500 index was up 104.06 points, or 11.57% to 1,003.31.

Asian markets surged in opening trade today, 14 October 2008 after world policymakers led by Europe readied plans to inject cash into banks in the biggest effort yet to ease the global financial crisis.

Japan's Nikkei surged 13.04% or 1079.13 points at 9,355.56, China's Shanghai Composite rose 1% or 20.82 points at 2,094.39, Hong Kong's Hang Seng gained 3.78% or 617.33 points at 16,929.49, Singapore's Straits Times advanced 5.37% or 111.46 points at 2,187.81, South Korea's Seoul Composite added 4.41% or 56.76 points at 1,345.29, and Taiwan's Taiwan Weighted was up 5.40% or 271.28 points at 5,291.72.

Back home, the BSE 30-share Sensex jumped 781.24 points or 7.42% to 11,309.09 and the S&P CNX Nifty rose 210.75 points or 6.43% to 3,490.70, on Monday, 13 October 2008 on assuring statements from Finance Minister P Chidambaram, coupled with strong global cues.

Foreign institutional investors (FIIs) were net equity sellers worth Rs 1060.60 crore while mutual funds bought shares worth Rs 582.31 crore on Monday, 13 October 2008, according to provisional data on NSE. FIIs were net buyers of Rs 2,382.25 crore in the futures & options segment on Monday, 13 October 2008.

On the New York Mercantile Exchange, November crude gained $3.49, at $81.19 a barrel, on Monday, 13 October 2008 as governments in the US and Europe acted to stem the financial crisis.