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Sensex, Nifty rally; Satyam falls

March 13, 2009

The Sensex closed 4.9 percent higher on Friday to post its biggest rise in three months, as investor confidence was bolstered by a jump in other Asian markets following positive news from the United States.

The benchmark closed 412.86 points up at 8756.61, supported by index heavyweights Reliance Industries (up 6.6percent), ICICI Bank (up 8.6 percent) and Infosys (up 5.6 percent).

Financial stocks across the world were boosted after Bank of America Chief Executive Kenneth Lewis said the largest U.S. bank was profitable in January and February

The BSE Realty Index was the frontrunner, closing 7.57 percent higher on hopes of a rise in demand for housing if there is a further rate cut.

Shares in Unitech, Indiabulls Real Estate, HDIL, DLF were up in the range of 5-12 percent.

There was good news for Satyam with investment banking sources saying about eight potential bidders had registered with Satyam to buy a 51 percent stake in the fraud-hit outsourcer.

Despite this, shares in Satyam closed 3.6 percent lower at 45.5 rupees. INDIA-BUDGET

The BSE Banking Index closed 5.8 percent higher on hopes that a dip in interest rates will boost lending growth and help cushion the sagging economy.

Shares in HDFC Bank, SBI, Kotak Mahindra Bank, ICICI Bank were up in the range of 4-9 percent.

FII data showed a negative net investment in equities of $24.6 million, while a net sell off was seen in debt of over $1 million. Foreign funds have sold a net of $2.2 billion worth of shares so far in 2009.

The rupee extended gains on Friday as a 5 percent rise in benchmark indices helped ease outflow worries with the dollar’s drop against some Asian currencies also boosting the local unit.

On the economic front, there are some early signs of the government’s efforts to shore up the economy taking effect.

Inflation numbers have started easing and car sales, an important measure of consumer demand, have risen 22 percent from a year earlier. Latest data from the RBI showed bank loans grew 18.3 percent on year as of Feb 27, a sign of easing liquidity.

But a further fall in IIP numbers cannot be ruled out till the economy bottoms out, as expensive credit and the global slump have dented overseas demand.

In this scenario of mixed data, do you think the Sensex will move further up when it opens next week?


Friday the thirteenth was a day that belonged to the bulls.Sensex took a much-needed dose of steriods and took off by 412 points.It has gained by 7.3% in past two sessions.
It may be too early to predict if recession has hit the bottom.A fall in IIP numbers in Jan. 09 of 0.5% was somewhat encouraging in sense that worst may have been contained.The health of real estate industry is still a cause of worry.It is not facing a ‘slow-down or recession’ but more serious a malaise called ‘melt-down’.
A revival in real estate demand should positively impact GDP growth. has progressively brought down repo rates to 5%.It is hoped that more monetary reliefs would be forthcoming.But what is the wisdom in keeping PLR as high as 12.75-13.25%.Let us hope that Finmin shows impatience with such recalcitrant bankers who are doing more harm than good to industry.
Finally,the great Indian political drama due in April-May 09 remains a big uncertainity.The public wants a government with a clear agenda on economy and national security.
Amidst such amount of uncertainity,let us wait and watch the developments.However Sensex Futures are +18 points.This may point to a smiling Monday?

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