Market may extend losses on weak global stocks

Indian invesors will closely follow global developments after worries about fiscal woes in Europe pushed global equities sharply lower on Friday 5 February 2010, as the cost of insuring Greece, Spain and Portugal's debt against default rose sharply. European Commission's endorsement Wednesday of Greece's deficit-cutting plan failed to assuage investor fears. Adding to the pressure was a lack of fresh or reassuring news from European Central Bank President Jean-Claude Trichet at the ECB's press conference on Thursday 4 February 2010. Investors continue to worry that various euro-zone members will not be able to bring their budgets under control, jeopardizing its fragile economic recovery.

Expectations that the dollar carry trade, which fuelled a rally in emerging market stocks in the past one year, may pause for a while may further affect stocks. The carry transaction, where global fund managers borrowed dollar and converted it into currencies of countries they chose to invest in, had captured the imagination as the greenback weakened and the US Federal Reserve cut interest rate to battle recession. Investors, who have been banking on the cheap dollar to punt, are now feeling the jitters with the dollar beginning to harden against currencies like the euro. A stronger dollar means that they will have to convert more of other currencies to pay the interest on the dollar loan.

Closer home, the Centre of Statistical Organization (CSO) will, on Monday 8 January 2010 release advance estimates of GDP growth for 2009-10. It will be based on the provisional data for the first half of the year and partial data for third quarter and no data on the fourth quarter, which contributes the highest to the annual Gross Domestic Product. The advance estimate will facilitate in the making of the Union Budget, to be presented in Lok Sabha on 26 February 2010.

The government will announce the industrial output data for the month of December 2009 on Friday, 12 February 2010. The industrial output rose 11.7% in November 2009.

The government will also unveil data on some wholesale price indices for the year through 30 January 2010 viz. the food price index, the primary articles index and the fuel price index on Thursday, 11 February 2010. Food inflation rose to 17.56% in the week ended 23 January 2010 from 17.40% in the previous week

The two top stock exchanges, the National Stock Exchange (NSE) and the Bombay Stock Exchange (BSE) have decided to hold a special trading session on Saturday, 6 February 2010, as NSE is testing an upgraded trading system. Trading will begin at 11:00 IST and end at 12:30 IST