Indices seen halting three-day rally on lower Asian equities

Key benchmark indices are seen opening on a soft note, pausing after a three-day run-up, tracking lower Asian equities. The SGX Nifty futures for September 2009 expiry was down 6.5 points. US markets ended higher on Tuesday, 8 September 2009 after re-opening following a long weekend. Meanwhile the likely progress of the ongoing gas dispute between the Ambani brothers ahead of the formal outcome on 20 October 2009 may also influence the markets.

Asian markets were trading lower today, 9 September 2009 weighed by exporters due to the yen's recent rise against the dollar. Key benchmark indices in South Korea, Japan, China, Hong Kong, Taiwan, and Singapore were down by between 0.02% and 0.94%.

US markets gained on Tuesday, 8 September 2009 as crude prices surged more than $3 a barrel and gold made a run at $1,000 an ounce before pulling back. The Dow Jones added 56.07 points, or 0.6%, to 9,497.34. The broader S&P 500 index advanced 8.99 points, or 0.9%, to 1,025.39, and the Nasdaq Composite index rose 18.99 points, or 0.9%, to 2,037.77.

US market had re-opened after a long weekend after remaining closed on Monday, 7 September 2009 on account of the Labor Day holiday.

United Nations economists said on Monday, 7 September 2009 there would be no early recovery from global recession and warned that any move to ease back quickly on government stimulus programmes could make the crisis worse.

In its annual report, the Un trade and development agency UNCTAD also urged the creation of a new world reserve system using several currencies rather than just the US dollar, and called for tough controls on cross-border financial flows.

The world's wealthiest nations at the G20 meeting in London at the weekend have pledged a number of measures to maintain stimulus measures to boost the global economy. In a meeting held on Saturday, 5 September 2009, the finance ministers warned that the fledgling recovery was by no means assured.

Back home, in an important development, the market regulator Securities and Exchange Board of India (Sebi) is set to tweak takeover regulations, chairman C B Bhave said on Tuesday, 8 September 2009. A committee would be formed to examine the entire takeover code fairly soon, Bhave told reporters on the sidelines of an interactive session in Bangalore. The Sebi Substantial Acquisition of Shares and Takeovers Regulation was put in place in 1997. Since then, changes have been made under the framework of these original guidelines.

Meanwhile, the plan to encourage overseas firms to raise capital in India through Indian Depository Receipts, or IDRs, as they are popularly known, appears to have hit a road block, with the revenue department not in favour of granting long-term capital gains tax benefits for such issues.

IDRs are derivative instruments like Global Depository Receipts (GDRs) and American Depository Receipts (ADRs) which have shares as the underlying asset and denominated in the local currency the rupee. These instruments will help foreign companies raise capital in India by listing IDRs on local exchanges.

The finance minister, Pranab Mukherjee on Tuesday, 8 September 2009 said the government is constantly reviewing the economic situation to decide until when the stimulus measures need to be continued and it is not desirable to plan the exit strategy now

On Monday, 7 September 2009 the finance minister said that a slow down is likely in growth rate in the second and third quarters of the current fiscal due to less agricultural growth. He was a little doubtful of 6.1% expansion achieved during the first quarter of this fiscal. The economy will not grow at the pace it did in April-June period, but that does not warrant a downward revision of growth forecast.

Mukherjee said that he is, however, not revising the target of 6% plus growth rate for the fiscal as the economy will expand at a higher pace in the fourth quarter

As per the provisional figures on NSE, foreign funds bought shares worth Rs 991.75 crore and domestic funds purchased shares worth Rs 206.25 crore on Tuesday, 8 September 2009.

The BSE Sensex has jumped 725.34 points or 4.71% in three trading days to 16,123.67 on 8 September 2009 from a recent low of 15,398.33 on 3 September 2009 as revival of monsoon rains, strong response to the initial public offer of Oil India, a survey showing an improvement in business confidence of India Inc and firm global stocks boosted sentiments.

Stocks have risen sharply this year on increased global risk appetite triggered by hopes of a recovery in the global economy after a setback from a financial sector crisis. The Sensex is up 6476.36 points or 67.13% in calendar year 2009 as on 8 September 2009. From a 3-year closing low of 8,160.40 on 9 March 2009, the Sensex is up 7963.27 points or 97.58% as on 8 September 2009. FII inflow in calendar year 2009 totaled Rs 40,373.80 crore (till 7 September 2009).