Indian Weekly Market Update October 9 2009
Positive macroeconomic indicators emanating from the US reversed the previous week’s bearish undertone, encouraging investors to make purchases in major markets across the globe for the week ended October 9. The Institute for Supply Management’s index of non-manufacturing businesses, which accounts for 90 percent of the US economy, rose unexpectedly to 50.9 in September (a level above 50 indicates expansion) from 48.4 in August. Furthermore, US initial jobless claims fell by 33,000 to 521,000, the lowest level since January, for the week ended October 3. US trade deficit unexpectedly narrowed by 3.6 percent to US$30.7 billion in August from US$31.9 billion in July. Inventories at US wholesalers also dropped 1.3 percent in August after falling 1.6 percent in July. Encouraging news from the world’s largest economy generated positive sentiment among investors, triggering widespread buying across the US and Europe. Consequently, the Dow Jones Industrial Average (DJIA) gained 3.98 percent, while the FTSE 100 rose 3.47 percent for the week ended October 9.
Asian markets ended the week on a strong positive note, with six of the seven major indices closing higher due to positive global cues and a surprise increase in the interest rate in Australia. Hang Seng, Hong Kong’s benchmark index (up 5.52 percent), was the best performer in anticipation of an economic recovery. India’s benchmark BSE Sensex, the worst performer, declined 2.87 percent during the week due to concerns pertaining to overstretched valuations and massive selling of telecom stocks.
The Rupee appreciated 2.80 percent during the week as foreign institutional investors (FII) remained net buyers. Crude oil prices rose 2.6 percent to US$71.77 per barrel from US$69.95 last week. Crude oil prices rose during the week as the International Energy Agency (IEA) increased its global consumption forecast for a third month to an average of 86.1 million barrels a day next year.
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