Monthly auto, cement sales may set the tone

For the trading fraternity, the New Year begins early as trading starts at 9:00 IST from Monday, 4 January 2010, with stock exchanges deciding to extend trading hours by 55 minutes. Trading will end at 15:30 IST as usual.

The first trading day of the New Year marks listing of power utility JSW Energy on Monday. The company had priced its initial public offer (IPO) at the lower end of the Rs 100-115 price band following a tepid investor response. The company will issue shares to retail individual bidders at discount of Rs 5 to the issue price.

Auto, cement and steel stocks, will be focus in the first trading week of 2010 as companies unveil their sales data for December 2009. Steel shares may get a boost from a likely hike in steel prices in the New Year.

Asian stocks have bounced sharply from March 2009 lows, reflecting renewed risk appetite from investors as the global downturn began to ebb early in the year. The BSE Sensex jumped 81% in calendar 2009, its biggest yearly gain since 1991, when it jumped a record 82.1%. Markets in Asia and elsewhere next year will be influenced by the pace of economic recovery, the expected timing of US interest rate hikes and policymakers' strategies for unwinding emergency stimulus plans introduced during the global financial crisis.

The July 2010 fed-funds contract on Wednesday, 30 December 2009, priced in a 76% chance for the Federal Open Market Committee to raise the Fed funds rate to 0.5% at its meeting in late June 2010. On Tuesday, 29 December 2009, the July 2010 contract had priced in a 78% chance for a 0.5% rate. The funds rate has stayed inside a record low range of 0% to 0.25% for the past year, one of many Fed actions designed to stimulate the economy.

A likely record fund raising by Indian firms in 2010 could suck liquidity from the secondary market. As per one report, Indian companies have lined up equity raising plans of Rs 150000 crore in calendar 2010, close to two-and-a-half times of what they raised through share sales in calendar 2009.

Stock and sector-specific activity may dominate trade on the domestic bourses in the near term as Q3 December 2009 results start trickling in. IT bellwether Infosys and two-wheeler major Bajaj Auto, kickstart the reporting season on 12 January 2010.