Market seen opening lower; interim budget eyed

Key benchmark indices are likely to open subdued as the SGX Nifty futures for February 2009 series fell 13.50 points in Singapore. Interim budget 2009-10 scheduled to be presented in the parliament today will set the tone for the market. Global cues were mixed.

The interim Budget, to be presented by External Affairs Minister Pranab Mukherjee who is currently holding the charge of Finance Ministry, is likely to announce some measures to reduce the impact of the global economic meltdown on the Indian economy. The government has so far announced two stimulus packages including tax cuts and the capital injections for banks.

Also there are expectations of further rate cuts by the central bank. Marketmen expect the RBI to cut policy rates further after the interim general budget. The Reserve Bank of India (RBI) announced on Thursday, 12 February 2009, it will continue to closely monitor the developments in the global and domestic financial markets and will take swift and effective action, as appropriate.

Asian markets were trading mixed today, 16 February 2009, after Japan's economy shrank at an annual 12.7 percent pace last quarter, the most since the 1974 oil shock, as recessions in the US and Europe triggered a record drop in exports. China's Shanghai Composite gained 2.03% or 47.16 points at 2,367.96, South Korea's Seoul Composite was up 0.22% or 2.6 points at 1,195.04, Taiwan's Taiwan Weighted added 0.12% or 5.32 points at 4,597.82. However, Hong Kong's Hang Seng slipped 0.79% or 106.98 points at 13,447.69, Japan's Nikkei was down 0.21% or 16.37 points at 7,763.03 and Singapore's Straits Times was flat at 1,705.22.

US markets ended mixed on Friday, 13 February 2009 as persistent worries about the banking sector tempered news the Obama administration was set to announce on Wednesday, 18 February 2009, a plan to stem home foreclosures. US markets will be closed today, 16 February 2009 for President's Day holiday.

The Dow Jones industrial average fell 27.63 points, or 0.35%, to 7,905.13. The Standard & Poor's 500 index shed 2.70 points, or 0.32%, to 832.49. The Nasdaq Composite index added 1.39 points, or 0.09%, to 1,543.10.

Meanwhile, US President Barack Obama would sign into law the American Economic Recovery and Reinvestment Act in Denver on Tuesday, 17 February 2009. The bill, popular as economic stimulus package, was passed by the US Congress on Friday, 13 February 2009 after weeks of intense deliberations. The bill makes available to the Obama Administration $789 billion to revive and recover the US economy by funding projects, offering bailout packages to sinking companies and making investments in infrastructure projects.

Back home, key benchmark indices advanced on Friday, 13 February 2009, buying in metal, realty and capital goods shares. The BSE 30-share Sensex rose 168.91 points or 1.78%, to 9,634.74 and the S&P CNX Nifty advanced 55.30 points or 1.91% to 2948.35.

According to provisional data on NSE, FIIs were net sellers worth Rs 13.15 crore while mutual funds bought shares worth Rs 216.37 crore on Friday, 13 February 2009.

Meanwhile, Lalu Prasad presenting the interim railway budget 2009- 10 in the parliament on Friday, 13 February 2009 said the Railways will invest Rs 2.3 lakh crore in the year ending March 2010. Indian Railways generated a cash surplus of Rs 90,000 crore in the last five years. The Railway Minister announced fare cut in AC and mail express trains by 2% while keeping freight rates unchanged.