Market may open lower on weak global cues

The key benchmark indices may slide tracking weak global cues and on profit taking after the recent solid surge. However, volatility may remain high ahead of the expiry of May 2009 futures and options (F&O) contract today, 28 May 2009.

The Sensex is up 4,462.33 points or 46.25% in calendar year 2009to 14,109.64 on Wednesday, 27 May 2009. From a 3-year closing low of 8,160.40 on 9 March 2009, the Sensex is up 5,949.24 points or 72.9%.

Asian stocks fell today, led by banks and mining companies, after Australia & New Zealand Banking Group Ltd. sold shares and metal prices declined. Key benchmark indices in Japan, South Korea, Singapore fell by between 0.08% to 1.8%.

The US markets slid on Wednesday, 27 May 2009 after a spike in Treasury yields spurred concerns that the government's efforts to reduce interest rates would fail. The yield on the benchmark 10-year note rose above 3.7% to a fresh 2009 high.

In economic news, existing home sales for April 2009 came in at an annualized rate of 4.7 million, in line with expectations. There was some disappointment in the House Price Index for March 2009, which decreased 1.1% month-on-month. It was expected to increase 0.2%. The Dow fell 173.47 points, or 2.1%, to 8,300.02. The S&P 500 index fell 17.27 points, or 1.9%, to 893.06, and Nasdaq Composite Index slipped 19.35 points, or 1.1%, to 1,731.08.

Back home, team Manmohan is finally in place. After three days and several rounds of brainstorming, the Prime Minister and Sonia Gandhi finalised a team of 78 at around noon on Wednesday, clearing the way for the second stage of formation which will see no less than 59 ministers take oath of office today .

The 78-strong council of ministers includes 59 from the Congress and 19 from five allies: seven each from DMK and Trinamool Congress, three from Nationalist Congress Party (NCP) and one each from the Muslim League and National Conference. Nineteen cabinet ministers, including Trinamool Congress chief Mamata Banerjee and NCP's Sharad Pawar, were sworn in 22 May 2009. Fourteen will take oath Thursday morning along with 45 ministers of state, seven of whom will hold independent charge.

Former chief ministers Vilasrao Deshmukh, Vir Bhadra Singh and Farooq Abdullah were among the 14 politicians who were named as Cabinet ministers in the second list released on Wednesday.

DMK leaders Dayanidhi Maran, A Raja and M K Azhagiri will join the Manmohan Singh government as Cabinet ministers too. The list of Cabinet ministers also includes Mallikarjun Kharge, Kumari Selja, Subod Kant Sahay, M S Gill, G K Vasan, P K Bansal, Mukul Vasnik and Kantilal Bhuria.

As many as 45 politicians will join the government as Ministers of State. NCP leader Praful Patel and Congress leaders Prithviraj Chauhan, Sriprakash Jaiswal, Salman Khursheed, Dinsha Patel, Jairam Ramesh and Krishna Tirath will be Ministers of State with independent charge.

The notable omissions in the list of cabinet ministers are H.R. Bhardwaj, Shivraj Patil, Arjun Singh, Sis Ram Ola and P R Kyndiah.

Dr Manmohan Singh was on 22 May 2009 sworn-in as Prime Minister for a second consecutive term. A day after the swearing-in of the UPA government on Friday 22 May 2009, the Union cabinet met under the chairmanship of Prime Minister Manmohan Singh on Saturday 23 May 2009. The cabined took a decision to convene the Parliament session from 1 June to 9 June 2009. A meeting with leaders of various parties will be held in the first week of June 2009 for finalising the dates of the budget session, home minister P Chidambaram said after the cabinet meeting on Saturday. He said government is quite hopeful of passing the budget by 31 July 2009.

The Speaker's election would be held on 3 June 2009 and President Pratibha Patil will address the joint sitting on 4 June, the day Rajya Sabha will also be convened. This will be followed by the debate on motion of thanks. Explaining the process of passing the general budget, Chidambaram said this has to be completed by 31 July 2009 failing which a vote-on-account will have to be approved.

A comfortable victory for the Congress-led coalition government in election has raised expectations of a strong push for economic reforms by the government. Dr Manmohan Singh has reportedly prepared the broad contours of an economic revival plan to be taken up soon after the new government is formed, reports suggest. While recommendations to revive growth and ease the credit squeeze are likely to find a place in the plan, tax proposals are expected to be taken up as budget recommendations.

The telecom ministry has prioritised the much delayed auction of 3G airwaves and WiMAX spectrum. It has also prioritised introduction of a new spectrum policy.

The petroleum ministry has reportedly prepared a draft Cabinet note on a partial decontrol of petrol and diesel prices after which they will be linked to international movements. The new government is also likely to pursue disinvestment of state-run undertakings, reports suggest.

Financial sector reforms are likely to get a push in the coming days, which were relegated to the back seat due to persistent opposition from the Left parties.

The Congress party-led coalition has the support of 322 lawmakers, Prime Minister-elect Manmohan Singh said on Wednesday, 20 May 2009, giving it a clear majority in a new government. Congress said it has support of 274 members of the 15th Lok Sabha. In addition, the Bahujan Samaj Party, the Samajwadi Party and the Rashtriya Janata Dal sent letters of support for a Manmohan Singh-led government directly to the President, taking the support base to 322.

The Congress-led UPA defied predictions of a tight election and was only about 11 seats short of an majority from the 543 seats at stake in the recently concluded Lok Sabha election. Congress' alliance took 261 seats, sweeping aside its nearest rival, the bloc led by the Hindu-nationalist Bharatiya Janata Party (BJP), which won only 159 combined. Congress, which alone won 205 seats, needs a handful of partners to reach the 272 seats needed to take power, and is expected to seek the support of more smaller parties or independents