Market may open lower

Key benchmark indices may open lower tracking weak global cues. While, volatility may remain high ahead of the expiry of May 2009 futures and options (F&O) contract next Thursday, 28 May 2009. However, newly sworn in finance Minister Pranab Mukherjee's affirmation that his administration will take steps to fire growth might support the market.

Asian stock markets fell today after North Korea said it conducted a nuclear test, erasing an earlier rally that was fueled by gains in mining and shipping companies. Key benchmark indices in China, Hong Kong, South Korea and Taiwan fell by between 0.28% to 3%. While key benchmark indices in Japan and Singapore rose by between 0.05% to 1.14%.

The US markets finished lower on Friday 22 May 2009 after a late sell-off erased the day's gains. Stocks struggled to hold on to gains for much of the day but worries about a possible downgrade of the US credit rating left the market on rocky ground.The Dow Jones industrial average slipped 14.81 points, or 0.18%, to 8,277.32. The S&P 500 Index was down 1.33 points, or 0.15%, to 887. The Nasdaq Composite Index dropped 3.24 points, or 0.19%, to 1,692.01.

Manmohan Singh on Friday 22 May 2009 sworn-in as Prime Minister for a second consecutive term. He is only the second Prime Minister after Jawaharlal Nehru to return to power after serving a full five-year term. Among others who took oath as Cabinet Ministers include Pranab Mukherjee, Sharad Pawar, A K Antony, P Chidambaram, Mamata Bannerjee, S M Krishna, Ghulam Nabi Azad, Sushil Kumar Shindae, S Jaipal Reddy, Vayalar Ravi, Meira Kumar, Ambika Soni.

Among the key portfolios, Mr Pranab Mukherjee will head Finance Ministry, Mr P Chidambaram- Home ministry, Mr A K Antony-defence ministry and Mr S M Krishna- foreign & external affairs ministry.

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 decided 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 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 first two days will be taken up by members of the 15th Lok Sabha taking oath of the rest of the cabinet ministers. 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.

The new finance Minister Pranab Mukherjee suggested that the his administration was all set to take legislative measures to put the economy back on track and will take steps to fire growth.

Meanwhile, after holding out for three days, DMK has finally relented on the power-sharing formula offered by Congress at the Centre, settling for seven ministerial berths, including three Cabinet and four minister of states (MoS) slots. The MoS slots will be filled by S S Palanimanickam, who was a minister in the previous government too, actor-turned-politician D Napoleon, educationist S Jagatratchagan and the relatively unknown MP from Namakkal, S Gandhiselvan, who is one of the three Vanniyar faces of DMK in the 15th Lok Sabha. Ms Kanimozhi, for whom a MoS post was being sought by the party, is believed to have opted out.

DMK on Thursday 21 May 2009 said it has decided not join the the Congress-led UPA government but the party will provide support the government from outside. This after the talks between DMK and Congress over ministerial berth for DMK broke down over berth sharing.

Meanwhile, 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 who will be sworn in as the Prime Minister today has reported 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. The disinvestment department under the finance ministry is reportedly working on expanding the list of companies in which the government could reduce its stake. Among these are Power Grid Corporation, Cochin Shipyard, and Rashtriya Ispat Nigam.

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. Dr Singh was renominated as Congress Parliamentary Party leader on Tuesday (19 May 2009).

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.