Market may gain on positive Asia

The market may gain tracking higher Asian stocks. Sentiment may also get a boost after a sharp rise in core sector growth in month of August 2009. However, investors may refrain from building large positions in a truncated week as market will remain close on Friday, 2 October 2009 due to Mahatma Gandhi Jayanti. The market had remained closed for a public holiday on Monday, 28 September 2009.

The Index of Six core industries having a combined weight of 26.7 % in the Index of Industrial Production (IIP) registered a growth of 7.1% in August 2009 compared to a growth of 2.1% in August 2008. During April-August 2009-10, six core industries registered a growth of 4.8% as against 3.3% during the corresponding period of the previous year. Coal and cement sector boosted overall growth in six infra for August 2009.

The next trigger for the market is Q2 September 2009 results of India Inc next month. There is optimism about Q2 September 2009 results after advance tax collections registered a positive growth in the second quarter after witnessing a negative growth in the first quarter. Corporate advance tax and advance personal income-tax were up by 14.7% and 1.7%, respectively in the September 2009 quarter.

Pointing out signs of economic recovery, Mr V. Sridhar, Chairman, Central Board of Excise and Customs (CBEC) said, on Friday, that the excise duty collection for the month of August had grown 23 % over July 2009.

Coming back to stocks, a section of the market is concerned that a glut in share sales may suck liquidity from the secondary market. The corporate sector has raised large sums of money through equity and equity related instruments in the past six months or so to either to retire high cost debt or to fund expansion. The supply of paper by Indian firms appear limitless, raising concerns that additional share sales will suck liquidity from the secondary market.

As per one report, companies plan to raise at least Rs 40,000 crore through initial public offers (IPOs)/follow on public offers (FPOs) in the second half of the current financial year. Power companies such as GMR Energy, Indiabulls Power and JSW Energy and state-run Bharat Heavy Electricals and NTPC are likely to tap the primary market. Reliance Infratel also announced on Tuesday, 22 September 2009, its intention to raise Rs 5,000 crore from the primary market. A number of companies are also in the fray to raise funds by way of qualified institutional placement (QIP), reports suggest.

India's largest mobile telecom player by sales Bharti Airtel will be in action as South African government expected to communicate its stance on Tuesday 29 September 2009 to the two companies seeking to create the world's third largest mobile firm.

South African president Jacob Zuma will consult the team of government officials that visited India last week as well as the ruling African National Congress and take a decision on whether the government's insistence on a dual listed company or DLC structure can be waived. The period for exclusive talks between Bharti and MTN which had been extended twice before is set to expire on 30 September 2009.

Asian stocks rose today led by oil and technology companies. The key benchmark indices in Hong Kong, South Korea, Singapore and Taiwan rose by between 0.95% to 2.03%. Bu, China's Shanghai Composite fell 0.93%.

U.S. markets rose on Monday 28 September 2009 halting a three-day losing streak, as a spurt of corporate takeovers in the technology and healthcare sectors fueled optimism about share values. The Dow rose 124.17, or 1.3 % to 9,789.36. The Standard & Poor's 500 index rose 18.60, or 1.8 % to 1,062.98, and the Nasdaq composite index rose 39.82, or 1.9 % to 2,130.74.

Meanwhile, the International Monetary Fund will increase its forecast for global growth next year in the next few days to account for a faster recovery in major economies, its deputy director said on Monday.

The IMF will raise its forecast for 2010 global growth to about 3 percent from 2.5% said Murilo Portugal, the fund's deputy managing director. The revised forecast could come as soon as Tuesday.

Back home, volatility ruled the roost as the key benchmark indices slipped on Friday, 25 September 2009 with investors taking home some cash ahead of a long weekend. The BSE 30-share Sensex fell 88.43 points or 0.53% to 16693 on that day.

As per provisional data, foreign funds on 25 September 2009, sold stocks worth a net Rs 37.72 crore. Domestic funds mopped up equities worth a net Rs 227.26 crore.