Market may snap last two days losses on positive Asian stocks

The market may snap last two days losses on positive Asian stocks after strong trade data from China in the month of December 2009. US market closed moderately higher on Friday, 8 January 2010. The expectations of better Q3 December 2009 result by India Inc may further support market. IT bellwether Infosys kickstarts Q3 result season on Tuesday, 12 January 2010.

The government will present its annual budget in Parliament on 26 February 2009 and was aiming at enacting legislation in the second half of this year for introducing a new Goods and Services Tax (GST), the finance minister Pranab Mukherjee said on Saturday 9 January 2010.

Pranab Mukherjee also said he is hopeful growth rate of Asia's third largest economy could touch 8 % in the fiscal year to March 2010, faster than 6.7 % in the previous year. With faster growth in output in recent months and rise in inflation, the government is widely expected to withdraw some of its fiscal stimulus in the forthcoming budget.

The economy is likely to return to an annual growth rate of 9 % by the fiscal year ending in March 2012, Montek Singh Ahluwalia, deputy chairman of the Planning Commission.said on Saturday. Prime Minister Manmohan Singh on Friday 8 January 2010 said he was optimistic that India, which along with China is leading the drive out of a global recession, could return to annual growth of 9-10 % in a few years time.

Industry bodies have urged the government to extend fiscal stimulus by six months this year, but a 16-year high fiscal deficit of 6.8 % of gross domestic product estimated for 2009/10, has left little room for extending tax concessions. Mukherjee said it would take 7-8 months for the government to bring in legislations for introducing GST, which was earlier scheduled on April 2010.

The government expects the proposed tax reform along with higher growth in the economy leading to more revenues and stake sales in state-run firms, could help lower the fiscal deficit in 2010/11 to an estimated at 5.5 %. The government aims to sell shares of about 60 state-run firms in the coming years, with offers for power utility NTPC, miner NMDC, Rural Electrification Corp and Satluj Jal Vidyut expected by end-March 2010.

In global news, Asian stocks rose on Monday, after Chinese trade figures boosted metals prices. The key benchmark indices in Hong Kong, Japan, Indonesia, South Korea, Singapore and Taiwan rose by between 0.41% to 1.29%.

China's stocks rose 1.29%, led by brokerages and banks, after the government approved index futures, fanning speculation the new derivatives will boost trading volumes. China's exports climbed 17.7 % in December 2009 from a year earlier, the first increase in 14 months, and imports jumped 55.9 %, the customs bureau said over the weekend.

U.S. stocks closed up on Friday as December's unemployment report, despite showing job losses, was seen supportive of a slow recovery. The Dow Jones Industrial Average was up 11.33 points, or 0.11%, to 10,618.19. The Nasdaq was up 17.12 points, or 0.74%, to 2317.17 and the S&P 500 was up 3.29 points, or 0.29% to 1144.98.

Closer home, the key benchmark indices in India edged lower extending losses for the second straight day, defying gains in global stocks on Friday, 8 January 2010 .The BSE 30-share Sensex fell 75.43 points or 0.43% at 17,540.29 on that day.

As per provisional figures on NSE, foreign funds bought shares worth Rs 69.38 crore and domestic funds bought shares worth Rs 182.87 crore on Friday.