Market seen extending two-day gains on firm global cues

Replying to questions in the Rajya Sabha, Mukherji said the government is regularly monitoring the problem of hoarding and has been holding discussions with state governments on measures to curb it. For checking price rise, Mukherjee said the government has taken measures like reducing import duties on wheat, pulses, maize and raw sugar and banned export of non-Basmati rice.
Exports fell 6.6% to $13.19 billion in October 2009 over October 2008, their 13th straight monthly fall, the government said on Tuesday. Imports dropped 15% from a year earlier to $22 billion. The trade deficit shrunk to $8.8 billion in October 2009 from $11.74 billion a year earlier.
Exports for April-October, the first seven months of the 2009-10 fiscal year, were down 26% at $91.05 billion from the same period in the previous year.
C. Rangarajan, chairman of the prime minister's Economic Advisory Council on Tuesday said the robust growth of the economy in July-September indicated it could expand at around 7% in 2009-10. The latest numbers do indicate that industry and services are growing very strongly, Rangarajan said adding that this could help offset to a very large extent the impact of the decline in agricultural production.
Finance Minister Pranab Mukherjee told parliament on Tuesday that the current trend in inflation in India is a result of a shortage of food items and not due to a demand-push factor. The food articles index rose an annual 15.6% as at 14 November 2009, up from the previous week's 14.6% rise. Weak monsoon and floods in parts of the country have hurt farm output and pushed up food prices. The government is keeping a close watch on futures trading in commodities, Mukherjee said
The finance minister said buoyancy in government's revenue seen earlier may not be there till 2011/12. He said the government will time stake sale in state-run firms so as to get maximum value. He added that there is no plan for a strategic stake sale in state-run firms. The government, last month, decided to cap its holdings in state-run firms at 90% and said it would sell off shares in the firms where this limit was exceeded.
India's manufacturing activity expanded for the eighth straight month in November 2009 but at its weakest pace since March 2009 due to a slowdown in growth of output, new business and employment, a survey showed on Tuesday. The HSBC Markit Purchasing Managers' Index (PMI), based on a survey of 500 companies, fell to 53 in November 2009 from 54.5 in October 2009. A reading above 50 means activity expanded during the month.
Meanwhile, after witnessing substantial redemptions and erosion in assets under management (AUM), the mutual funds industry seems to have got its cheer back. The AUM of 22 fund houses, out of 39, have seen an increase of 7% in the overall average in November over the previous month of the same year.
Government data released on Monday showed the gross domestic product (GDP) grew by 7.9% in Q2 September 2009, from 7.1% in the previous year, shattering forecasts as stimulus measures boosted demand and manufacturing activity surged. The economy had registered a 6.1% growth in the first quarter.
Reacting to the GDP figures Montek Singh Ahluwalia, Deputy Chairman, Planning Commission said economic growth forecast for the year to March 2010 may have to be revised upwards as data released on Monday showed a faster expansion in September quarter. He added that there was no serious concern on inflation as of now and conventional monetary policy was unlikely to be effective in curbing food price rise.
Finance minister Pranab Mukherjee on Monday said he expects the economy to grow around 7% in the fiscal year ending March 2010. During the weekend, the finance minister said that Dubai's debt crisis would not affect India much, but the government is keeping a close watch and will act to prevent any fallout.
Key benchmark indices surged for the second running day on Tuesday, 1 December 2009, as markets across Europe and Asia rallied after worries about Dubai's finance woes receded. The BSE 30-share Sensex was up 272.05 points or 1.61% to 17,198.27 and the S&P CNX Nifty was up 89.30 points or 1.77% to 5122
As per provisional data on NSE, foreign funds bought shares worth Rs 579.09 crore and domestic funds sold shares worth Rs 125.07 crore on Tuesday, 1 December 2009.