Market may extend last four days of gains on positive global stocks

The key benchmark indices may extend last four days of gains on positive global cues. Investors will keenly watch India's wholesale price index (WPI) in the year to 29 August due today. The annual rate of inflation fell 0.21 % for the week ended 22 August 2009 compared with previous week's decline of 0.95%.

Key benchmark indices extended gains for the fourth straight session on Wednesday, 9 September 2009. The BSE 30-share Sensex was up 59.88 points or 0.37% to 16,183.55, its highest closing since 30 May 2008 on that day.

The Sensex had jumped 785.22 points or 5.09% in four trading days to 16,183.55 on 9 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 6536.24 points or 67.75% in calendar year 2009 as on 9 September 2009. From a 3-year closing low of 8,160.40 on 9 March 2009, the Sensex is up 8023.15 points or 98.31% as on 9 September 2009. FII inflow in calendar year 2009 totaled Rs 41536.10 crore (till 8 September 2009).

The Oil India IPO which opened for bidding on 7 September 2009, was subscribed 4 times by 17:00 ST on day three, data on the National Stock Exchange showed. The Oil India initial public offer (IPO) will close today, 10 September 2009. OIL, which produces 3.5 million tonnes of oil annually, will be listed on the bourses on 29 September 2009. The government has fixed Rs 950-1,050 per share price band for the initial public offering of Oil India (OIL), the second state-run firm to hit the market this year after NHPC, and will raise up to Rs 2,777 crore.

The response to Oil India IPO is being closely watched after a tepid secondary market debut of power sector firms NHPC and Adani Power, recently.

Meanwhile, Finance Secretary Ashok Chawla said on Wednesday India's main economic worry is lifting growth in Asia's third-largest economy rather than inflation, adding he saw no need for the central bank to change policy. He further said India's government will not borrow more from the market than its budget target for 2009/10 (April-March).The government plans to borrow Rs 4,51,000 crore ($93 billion) in the fiscal year to fund a fiscal deficit forecast at 6.8 % of gross domestic product.

Asian stocks climbed today as profit from China Yurun Food Group and a higher forecast from Texas Instruments Inc. lifted confidence the global economy is recovering. The key benchmark indices in Hong Kong, South Korea, Singapore and Taiwan rose by between 1.01% to 1.57%. But, China's Shanghai Composite fell 0.82%.

Japan's Nikkei rose 1.36% even as Japanese machinery orders fell more than economists forecast in July. Orders, an indicator of capital spending in the next three to six months, declined 9.3 % from June when they jumped 9.7%.

The US markets closed higher on Wednesday, 9 September 2009 with the S&P 500 touching an 11-month high as the market was lifted through most of the day by strength in commodities, industrials and technology.

The Dow added 49.88 points, or 0.5%, to 9,547.22. The S&P 500 index rose 7.98 points, or 0.8%, to 1,033.37, while the Nasdaq Composite rose 22.62 points, or 1.1%, to 2,060.39. But US stocks had faltered for a while during the day on a Federal Reserve report that the economy will remain weak largely due to unemployment.