Market may slide

Key benchmark indices are geared for a weak start mirroring weak global cues. US markets tumbled overnight on fears the new bank rescue plan announced by the government may not be enough to revive the economy from deepening recession. The SGX Nifty futures for February 2009 series lost 56 points in Singapore.

The index of industrial production (IIP) data for December 2008 will be released today, 11 February 2009. The IIP for the November 2008 stood at 2.4%, compared to contraction of 0.4% in October 2008.

Asian markets declined today, 11 February 2009 following a steep sell-off on Wall Street overnight, as investors reacted with skepticism to the US government's latest plan to heal the country's ailing banking industry. Hong Kong's Hang Seng fell 3.35% or 465 points at 13,415, South Korea's Seoul Composite slipped 1.83% or 22 points at 1177, China's Shanghai Composite went down 1.32% or 30 points at 2235, Singapore's Straits Times fell 1% or 17 points at 1686, Japan's Nikkei lost 0.29% or 23 points at 7946 and Taiwan's Taiwan Weighted fell 0.85% or 38 points at 4487.

US markets plunged on Tuesday, 10 February 2009, as investors soured on the financial rescue and seemed to ignore the Senate's approval of its $838 billion economic stimulus package. The Dow industrials slumped 381.99, or 4.62%, to 7,888.88. Broader stock indicators also tumbled, with the Standard & Poor's 500 index down 42.73, or 4.91%, to 827.16.

The US government on Tuesday, 10 February 2009 announced details of the new bank rescue plan. The 'financial stability plan,' as it's now called, consists of four main components. It will set up a public-private fund to mop up to $ 500 billion of spoiled bank assets. It will also set up a consumer-lending facility to support up to $ 1 trillion in new lending. The plan will devote up to $ 50 billion to help stem home foreclosures and provide new funding to banks after a "stress test" to determine if the bank is healthy.

Back home, key benchmark indices advanced for the third straight day on Tuesday, 10 February 2009, on hopes an interim budget will contain fiscal incentives to revive sagging growth. The BSE 30-share Sensex rose 63.58 points or 0.66% to 9,647.47 and the S&P CNX Nifty gained 14.60 points or 0.5% to 2934.50.

The BSE Sensex jumped 556.69 points or 6.12% in the last three trading sessions from its close of 9090.88 on 5 February 2009.

According to provisional data on NSE, FIIs were net buyers worth Rs 368.96 crore while mutual funds sold shares worth Rs 116.99 crore on Tuesday, 10 February 2009.

The Congress party-led coalition government will unveil an interim railway budget on Friday, 13 February 2009 followed by a mini general budget on 16 February 2009, ahead of national elections due by May 2009.

A full budget for 2009-2010 will come only after a new government takes over. Foreign Minister Pranab Mukherjee, who is also responsible for finance and will present the mini budget, said on Friday, the government would take measures to boost growth, especially in sectors where jobs are at stake.

The market is agog with talks that the forthcoming interim budget may offer tax sops and sector-specific stimulus package. The government has so far announced two stimulus packages including tax cuts and the capital injections for banks.