Indian Weekly Market Update May 29 2009
Optimism of an economic recovery coupled with better-than-expected macroeconomic data from leading economies pushed global equity markets to a new high during the week ended May 29, 2009. The US GDP growth contraction improved to 5.7 percent in the first quarter of 2009 as against the provisional data, which indicated a decline of 6.1 percent. Furthermore, consumer sentiments rose to the highest level (since September 2008) to 68.7 in May 2009 from 65.1 in April 2009. This boosted investor confidence. Improved GDP growth in India and positive industrial growth in Japan indicated recovery in these economies. The Dow Jones Industrial Average (DJIA) and FTSE100, with a gain of 2.69 percent and 1.2 percent, respectively, rallied during the week.
The rupee appreciated 0.08 percent during the week as a decisive mandate of the UPA government in the general election increased foreign institutional investors (FIIs) inflow, which totaled US$1.34 billion during the week. Crude oil prices jumped 7.5 percent to close at US$66.31 per barrel after rising 8.2 percent the previous week. The weakening dollar against major currencies and the abating recessionary threat raised investments in crude oil that led to an increase in prices.
Improved investor sentiment across the US and better economic data released in Asian economies positively benefitted the Asian equity markets, as six of the seven indices ended the week in green. Hong Kong’s benchmark index, Hang Seng, was the top gainer among Asian indices (up 6.5 percent) during the week under review. India’s benchmark index, BSE Sensex, gained 5.31 percent, led by increased buoyancy after the statistical data illustrated that GDP grew 5.8 percent in the fourth quarter of 2008–09.
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