Market may remain volatile

Key benchmark indices may open lower tracking weak Asia. However volatility may remain high this week ahead of the expiry of May 2009 futures and options (F&O) contract on Thursday, 28 May 2009.

Investors
may also book profits after recent sharp rally in Indian stocks. From a 3-year closing low of 8,160.40 on 9 March 2009, the Sensex is up 5,752.82 points or 70.49% to 13,913.22 on Monday 25 May 2009. The Sensex is up 4,265.91 points or 44.21% in calendar year 2009.

While, recent buying by the foreign institutional investors (FIIs) may support the market . As per the provisional figures on NSE, foreign funds bought shares worth Rs 427.97 crore on Monday 25 May 2009 while domestic funds bought shares worth Rs 197.68 crore. FII inflow in May 2009 totaled Rs 14,242.40 crore (till Friday, 22 May 2009). FII inflow in calendar year 2009 totaled Rs 14,955 crore (till 22 May 2009).

Most of the Asian stocks were trading lower today, 26 May 2009. Japan's Nikkei stock average fell 0.86% on Tuesday, weighed down by tech shares such as TDK Corp though slides were checked by rises in shares such as drugmakers and telecommunications companies. But trade was thin, with a number of investors waiting to see how Wall Street will reopen after the Memorial Day holiday and in the wake of a public holiday in the United Kingdom.

South Korea's stocks fell 0.97% on concern that North Korea will conduct more nuclear tests after the communist state said yesterday it successfully held an underground explosion. Singapore's Straits Times fell 0.17% in a choppy trade. Hong Kong's Hang Seng fell 0.05%. Key benchmark indices in China, and Taiwan rose by between 0.19% to 0.24%.

US markets remained shut on Monday, 25 May 2009 due to Memorial Day holiday.

Back home in the political front, activity regarding expansion of the Manmohan Singh ministry gathered momentum on Monday 25 May 2009 with the Prime Minister meeting Congress chief Sonia Gandhi to finalize the list of inductees even though the sudden outbreak of violence in Punjab occupied the government's attention.

While there was no official word on the ceremony, it was hoped that the expansion could still be held today with the nominees of Trinamool Congress and DMK already in or on their way to Delhi.

. If the swearing-in of ministers does take place, it is expected to include the DMK contingent and several minister of state (MoS) nominees from Trinamool.

The UPA government got down to business in its second term with five of the six key Cabinet ministers alloted portfolios assuming charge of their respective offices on Monday 25 May 2009 and setting out their priorities.

P Chidambaram, A K Antony and Sharad Pawar returned to the Home, Defence and Agriculture ministries they were in-charge during Manmohan Singh's first term while Pranab Mukherjee came back to the Finance Ministry, a portfolio he had held 25 years back in the Indira Gandhi government.

S M Krishna, the former Karnataka chief minister and ex-Maharashtra governor, assumed office as the new External Affairs minister after making his Cabinet debut.

All the ministers convened meetings of their top officials to get a quick update on pressing issues. Mamata Banerjee, who was given the Railways portfolio, is in Kolkata and was yet to assume charge. Only six of the 19 Cabinet ministers who took oath along with Prime Minister Manmohan Singh last Friday have been allocated portfolios.

Dr Manmohan Singh was on Friday 22 May 2009 sworn-in as Prime Minister for a second consecutive 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.

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 newspaper report quoted Mukherjee as saying that the President's address on 4 June 2009 will unveil the new agenda of the government. Mukherjee said the government is all set to take legislative measures to put the economy back on track. When a stable government is in place, credit flows and other measures needed to boost the economy become easier, Mukherjee said. The Finance Minster (FM) said he was hopeful that the economy will recover by the second half of the year ending March 2010.

On the impact of the stimulus packages, the minister said that their effect would be felt in sectors like automobiles soon. The minister said that he was not in the alarmists' column over fiscal deficit.

Soon after taking charge of his office on Monday, the finance minister, Mr Pranab Mukherjee, held closed-door consultations with senior ministry officials and advisers where the talks focused on efforts to present the general budget 2009-10 in time to complete the entire process by 31 July 2009. The government had earlier indicated that it might take another vote on account for a brief period in case the finance bill was not passed before 31 July.

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.

Meanwhile, three days after the Congress and Dravida Munnettra Kazhagam (DMK) cracked the formula over portfolio allocations, DMK seems to have taken a soft approach. It now says it's ready to accept any portfolio that the Prime Minister Dr Manmohan Singh offers. With three DMK leaders being accommodated in the Cabinet and four as Ministers of State (MoS), a deal which for now seems to have the backing of the DMK.

However, now speculation is rife over what portfolios lies in store for the DMK. DMK supremo M Karunanidhi's nephew Dayanidhi Maran is slated to get the Textile portfolio. Karuna's son MK Azhagiri will be given the Chemical and Fertilizers portfolio. Another former minister A Raja will be handed the reigns of the information technology portfolio.

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.

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.