Market may gain on firm Asia; trading starts at 9:00 AM

The market may extend recent gains on firm trading in most of Asia. Jump in domestic exports may also support market. From today, 4 January 2010, trading will start at 9:00 IST and end at 15:30 IST compared to the earlier timing of 9:55 IST to 15:30 IST. The market remained closed on Friday, 1 January 2010, for the New Year holiday.

The Reserve Bank of India (RBI) will review interest rates at its next policy review scheduled for 29 January 2010 and not before, K.C. Chakrabarty,a deputy RBI governor said on 31 December 2009. He further said credit growth will rise to 17-18% when GDP growth reaches 8-9%.

Finance Minister Pranab Mukherjee said on 30 December 2009 that the government needs to strike a balance between economic growth and cutting fiscal deficit. India's fiscal deficit is estimated at 6.8% of gross domestic product for 2009/10 (April-March), higher than 6.2% in the previous year as the government cut tax rates and boosted spending.

Recently C. Rangarajan, Chairman of the Economic Advisory Council to the Prime Minister, raised concern over the rising food inflation, which is at an 11-month high now, stating that the task ahead was to check food inflation. He indicated that the Reserve Bank of India could look at raising the cash reserve ratio (CRR) to suck out excess liquidity from the system, even though the central bank may watch the price movements for some more time before taking any decision on rate hike.

The economy will expand 8 % in 2010/11 after growing between 7 and 7.5 % in the current fiscal year to end-March, C. Rangarajan said on Saturday 1 January 21010. Rangarajan also said the economy would return to an annual growth rate of 9 % in the fiscal year to end-March 2012 on the back of an improvement in the world economy and global trade.

Food price index rose 19.83% in the 12 months to 19 December 2009, data released by the government showed on 31 December 2009, showed. The primary article index jumped 15.49% and the fuel price index rose 4.45%. The worst monsoon in nearly four decades and flooding in some parts of the country have pushed up food prices.

Meanwhile, India's exports sector has bounced back with outward trade growing by 18% in November 2009, the commerce ministry said. The export figures turned positive after staying in the red for 13 months. The value of exports in November 2009 jumped to $13.19 billion compared to $11.16 billion.

Data earlier this month showed that corporate advance tax payments for the October-December 2009 quarter shot up sharply, suggesting a higher profit growth in corporate sector in the third quarter (October-December) of the current fiscal. Corporate advance tax payments for the quarter were up 44% to Rs 48,300 crore against a 3.7% decline in April-June quarter and a 14.7% increase in July-September quarter. The company-wise break-up of advance tax collection suggests a broad-based recovery with automobiles, cement, metals and consumer goods, doing well.

Auto stocks will be in action as the sector posted strong sales in December 2009. TVS Motor, a maker of two- and three-wheeled vehicles, said its sales rose 34% to 119,701 units in December 2009 over December 2008. Maruti, the local unit of Suzuki Motor Corp. and India's biggest carmaker by sales, posted a 51% rise in total sales in at 84,804 units in December 2009 over December 2008..

Mahindra & Mahindra (M&M) India's largest tractor maker by sales, reported 122% rise in its domestic sales to 22,754 units in December 2009 over December 2008. The company sold a total of 24,001 vehicles (Domestic + Exports) in December 2009 as against 11,172 vehicles sold in December 2008. The country's largest commercial vehicle maker by sales, Tata Motors registered 105 % growth in sales to 51,627 units in December 2009 over December 2008.

The shares of JSW Energy will be listed on the bourses today, 4 January 2010.

In global news,most of the Asian stocks rose on Monday after Chinese manufacturing expanded in December and a stronger dollar boosted the earnings outlook for Japanese car and electronics manufacturers. The key benchmark indices in Hong Kong, Indonesia, Japan and South Korea rose by between 0.02% to 1.17%. But the key benchmark indices in Singapore and Taiwan fell by between 0.19% to 0.3%.

China's Purchasing Managers' Index climbed to a seasonally adjusted 56.6, the Federation of Logistics and Purchasing said on 1 January 2010. It was the fastest expansion in 20 months. South Korean exports increased 33.7 % in December from a year earlier, the fastest pace in 17 months, the Ministry of Knowledge Economy said on 1 January.

Singapore's economy shrank for the first time in three quarters. Gross domestic product contracted an annualized 6.8 % in the fourth quarter to December from the previous three months after climbing a revised 14.9 % from July to September, the trade ministry said in a statement today.

U.S. stocks closed out 2009 on Thursday 31 December 2009 with their first annual advance in two years, underpinned by strength in technology and natural resource shares on bets that the recovery will brighten the profit outlook. The Dow Jones industrial average fell 120.46 points, or 1.14 % to end at 10,428.05. The Standard & Poor's 500 Index declined 11.32 points, or 1%, to finish at 1,115.10. The Nasdaq Composite Index lost 22.13 points, or 0.97 %, to close at 2,269.15. US markets remained close on Friday, 1 January 2010 on New Year's holiday.

Closer home, the key benchmark indices attained their highest closing level in nearly 20 months on the last trading day of calendar 2009 as Asian stocks rose. The BSE 30-share Sensex rose 120.99 points or 0.7% to 17,464.81 its highest closing since 5 May 2008.

As per provisional figures on NSE, foreign funds bought shares worth Rs 516.10 crore and the domestic funds sold shares worth Rs 472.16 crore on Thursday, 31 December 2009.