Market seen snapping four-day losses on strong global cues

The market is likely to see an upbeat start, snapping four-day losses, on strong global cues after data showed the US economy is out of the recession. However fall in Reliance Industries (RIL)'s net profit, which reports its earnings after market hours on 29 October 2009, may cap gains. Companies announcing their September 2009 results today, 30 October 2009 and those who have reported their earning after market hours on 29 October 2009, will be in spotlight

RIL reported a fourth straight decline in quarterly profits on shrinking refining margins and reduced exports due to a global economic downturn. The company today posted a 6.4% fall in net profit at Rs 3,852 crore despite 6% rise in total income to Rs 47,476 crore in Q2 September 2009 over Q2 September 2008. Refining margins more than halved to $6 a barrel from $13.3 a barrel a year earlier. The results were announced after market hours on 29 October 2009

On the other hand, ONGC's net profit rose 5.9% to Rs 5,090 crore in Q2 September 2009 over Q2 September 2008 on account of lower subsidy outgo and higher per barrel realisation on crude oil sales. The company's turnover for the quarter stood at Rs 15,134 crore (Rs 14,820 crore). The results were announced after market hours on 29 October 2009

Bharti Airtel, ICICI Bank, IOC, Nalco, Sail, ABB, Ackruti City, Ashok Leyland, Divi's, Educomp, Federal Bank, Gammon India, GE Shipping, Godrej Consumer, Indiabulls Real Estate, Indian Hotels, IRB Infrastructures, IVRCL Infrastructures, MTNL, Mundra Port, Nestle India, Oracle Financial, Orchid Chemicals, Reliance Capital, Thermax, Torrent Power and Uttam Galva Steels among others will announce their September 2009 quarterly results today, 30 October 2009.

Asian markets rallied after data showed the US economy is out of recession. Key benchmrk indices in Honk Kong, China, Japan, Singapore, South Korea and Taiwan were up by between 0.48% and 3.17%

Stocks on Wall Street rallied on Thursday, 29 October 2009 after four days of losses after data showed the world's largest economy grew for the first time in a year as a spate of stimulus measures brought an end to the longest period of contraction since the Great Depression.

The Dow Jones industrial average jumped 199.89 points, or 2.1%, to 9,962.58. The broader S&P 500 index rose 23.48 points, or 2.3%, to 1,066.11, while the Nasdaq Composite Index rose 37.94 points, or 1.8%, to 2,097.55.

US GDP grew at an annualised rate of 3.5% in the July to September quarter after shrinking in each of the last four quarters, commerce department figures showed on Thursday. This was the fastest pace in GDP growth for the US economy since the third quarter of 2007.

Back home, key benchmark indices declined for the fourth day on 29 October 2009 on weak global cues in a highly choppy trading session. The BSE 30-share Sensex fell 230.77 points or 1.42% to 16,052.72 and the S&P CNX Nifty dropped 76.45 points or 1.58% to 4,749.70.

As per provisional data, foreign funds dumped stocks worth a net Rs 2546.67 crore on 29 October 2009 whereas domestic funds bought equities worth a net Rs 977.06 crore.

The market remains closed on Monday, 2 November 2009, on account of Guru Nanak Jayanti.

Inflation based on the wholesale price index (WPI) rose 1.51% in the year through 17 October 2009, higher than previous week's annual rise of 1.21%, data released by the government showed on Thursday. Within the WPI, the food articles index rose 12.85%. The government revised upwards inflation for the year through 22 August 2009 to rise of 0.17% from an estimated fall of 0.21%.

The Reserve Bank of India at its monetary policy review early this week left its key rates unchanged, but raised the wholesale price-based inflation projection for end-March 2010 sharply to 6.5% with an upward bias, from 5 % earlier.

The IMF said on Thursday the economies of India, China and Australia were recovering especially rapidly, suggesting it notices growing pressures for authorities there to tighten monetary policy ahead of others in the region. It called the three economies special cases, while adding a tightening of monetary policy seemed unnecessary elsewhere in the region in the near future.

It also advised Asian central banks not to raise interest rates only to calm asset price growth, saying lifting rates ahead of advanced economies could attract "carry trade-type" capital inflows and aggravate asset price pressures.

The supply of paper by Indian firms appear limitless, raising concerns that additional share sales will suck liquidity from the secondary equity market. As per reports, Indian firms have garnered about $9 billion (Rs 32,400 crore at the current exchange rates) through sale of shares and convertible bonds to institutional buyers since April 2009. Indian companies are taking advantage of a surge in liquidity to recapitalize and fund capital expenditure after being starved of cash last year.

Unlisted Reliance Infratel announced on 22 September 2009 its intention to raise Rs 5,000 crore from the primary market. Divestment of state-run firms by the government may also increase the supply of paper in the market.

The government recently approved stake sales in state-run power producer NTPC and another unlisted power firm Satluj Jal Vidyut Nigam which reflects the country's resolve to speed up reforms and raise more resources for social schemes.

The government has approved a follow-on public offering of 20% of state run Steel Authority of India, the steel minister said on 21 October 2009. The Government of India owns nearly 86% of Sail.

Also the government gave its approval for 15% follow on public offer for Rural Electrification Corporation on 29 October 2009.