Indian Markets Monday Wrap-Up: Buoyed on Global Cues

After languishing in the red for the first half of the trading session, markets bounced back in the afternoon session. Expectations of a stimulus package and hopes of further rate cuts catapulted the markets. BSE Sensex closed higher by 215 points and NSE Nifty closed higher by 65 points. BSE Midcap and Smallcap indices also closed higher, up by 1.5% and 1% respectively. While stocks from metal and banking sectors emerged as key gainers, stocks from the auto sector were amongst the losers. Rupee closed at 48.48 against the US dollar. While Asian markets closed in the green, the European indices are also trading in the positive currently.

Satyam (up 10%) emerged as a top gainer of the day today. The company has postponed its board meeting which was scheduled for today to January 10, 2009 to mull options beyond share buyback. Satyam’s board will consider measures to strengthen Satyam's governance structure, including increasing the size and altering the composition of the board. This move is in line to restore investors’ faith in the company.

As per a leading business daily, the steel industry is calling for a hike in import duty and imposition of countervailing duty to check cheap overseas arrivals of the commodity. Members of the Steel industry have asked for imposition of additional 10% import duty on steel items, apart from 10% Common Veterinary Entry Document (CVED) on TMT bars and a special additional duty of 4% to protect domestic industry. The current import duty in India is around 5%. The industry is asking for these measures as steel companies from countries like China and Ukraine started routing their piled up stocks to India in bulk quantities on the face of global economic slowdown. Indian steel companies are facing pressure on margins as steel prices have declined in recent times. With imports flooding in, the competition would further increase, thereby affecting the domestic steel companies. Steel stocks ended the day on a firm note.

As per a survey conducted by Federation of Indian Chambers of Commerce and Industry (FICCI), the Indian service sector has shown resilience amidst the global economic slowdown. 12 out of 31 segments surveyed by FICCI recorded high to excellent growth rates ranging between 10% to 20% during April to November 2008. Although the slowdown is expected to hit some segments of the service sector in the medium term, the service sector is expected to drive the GDP growth going forward. It may be noted that at present, the service sector contributes 63% of GDP.

As per a leading business daily, oil prices rose to near US$ 40 a barrel today mainly on account of the widening conflict between Israel and Gaza, raising tensions in the oil-rich Middle East. Oil prices have fallen 73% since peaking at US$ 147a barrel in July as a credit crisis in the U.S. sparked a steep drop-off in consumer demand and corporate earnings.