A reading showing fall in India's manufacturing output in the month just gone by and lower US index futures pulled the domestic bourses off the higher level.
The 30-share BSE Sensex was up 150.61 points, or 1.66 per cent, shedding close to 80 points from the intraday high. The end of the operation in Mumbai to flush out terrorists, a reshuffle of key government ministers after the last week's deadly attacks in the financial capital and expectations of a further cut in interest rates supported the market.
India's manufacturing output shrank for the first time in three and a half years in November 2008 as credit conditions tightened and the global financial crisis hurt sentiment and reduced demand. The ABN AMRO Bank purchasing managers' index (PMI), based on a survey of 500 companies, fell sharply to a seasonally adjusted 45.8 in November 2008, the first time it has contracted since the survey began in April 2005 and well below October 2008's 52.2.
A reading above 50 signals economic expansion while a figure below 50 suggests contraction.
Prime Minister (PM) Dr Manmohan Singh took charge of the finance portfolio after P Chidambaram was named the home minister on Sunday, 30 November 2008, to replace Shivraj Patil, who resigned over the Mumbai terror attacks. Singh was the architect of India's economic reforms in the 1990s.
There are expectations that the Reserve Bank of India (RBI) will cut rates further to shore up confidence battered by the global financial crisis and the series of attacks around the city. There has been criticism in recent weeks that a series of policy measures of the RBI were being driven by the finance ministry with Chidambaram in charge of the ministry. But now with Prime Minister (PM) Dr Manmohan Singh, himself a former RBI governor, holding additional charge of the finance ministry, the prospects of the governor coming into his own are far greater.
The PM, the architect of early 1990s economic reforms, holding additional charge of the finance ministry will also be perceived as a positive sign for the stock markets in terms of ensuring continuity and signaling a pro-reform image even though just a few months are left as parliamentary elections must be held before May 2009.
The National Security Guard (NSG) on Saturday, 29 November 2008, took control over Taj Hotel at the Gateway of India, in Mumbai, ending a nearly 60-hour operation to flush out terrorists.
At 11:27 IST, the BSE 30-share Sensex was up 150.61 points, or 1.66 per cent, to 9,243.33. At the day's high of 9,326.68 hit in mid-morning trade, the Sensex gained 233.96 points. The Sensex rose 59.72 points at the day's low of 9,152.44 in early trade.
The S&P CNX Nifty was up 59.85 points, or 2.17 per cent, to 2,814.95.
The market breadth, indicating the overall health of the market, was strong. On BSE, 1,058 shares rose as compared with 4681 that declined. 60 shares remained unchanged.
Among the 30-member Sensex pack, 27 stocks rose while the rest fell.
India's largest private sector company by market capitalization and oil refiner Reliance Industries (RIL) rose 2.4 per cent to Rs 1,158.80 on reports it has inked a pact with 3 power companies to sell solar energy. RIL is setting up a 5 mega watt (MW) solar power generation plant at the Khimsar village in Nagaur district in Rajasthan.
Jaiprakash Associates, Reliance Communications, ONGC, and Sterlite Industries rose by between 3.26 per cent to 7.23 per cent.
Steel stocks rose on government's latest initiative to protect the domestic industry from cheap imports. JSW Steel, Tata Steel, Jindal Steel, Steel Authority of India rose by between 2.11 per centt o 3.6 per cent. The domestic steel industry struggling against falling international prices and cheap imports from China is all set to get more help from the government. The centre, which already imposed import restrictions on a number of steel products, has now initiated anti-dumping investigations on imports of a wide range of stainless steel and steel items from countries including China, Japan, South Korea, the US and the EU.
Cement stocks rose on reports cement manufacturers have urged the government to rationalise the tax structure for the industry to help achieve strong economic growth. ACC, Ambuja Cements, Ultratech Cement, Grasim Industries, Birla Corporation of India rose by between 0.87 per cent to 2.29 per cent.
Banking stocks rose on strong American Depository Receipts (ADRs) and on hopes of further cut in interest rates by the RBI. India's largest private sector bank by net profit ICICI Bank rose 1.95 per cent as ADR gained 7.8 per cent on Friday, 28 November 2008. India's second largest private sector bank by net profit HDFC Bank jumped 4.46 per cent as ADR added 5.54 per cent on Friday. India's largest commercial bank State Bank of India (SBI) gained 2.64 per cent.
India Infoline surged 3.90 per cent to Rs 37.30 on a decision to buyback own shares at a price not exceeding Rs 43.20 a share, a 15.82 per cent premium to the ruling market price.
IT stocks rose on a weaker rupee and on rise in ADRs rose on Friday, 28 November 2008. India's third largest IT exporter by sales Satyam Computer Services rose 1.48 per cent as its American depository receipt (ADR) rose 0.87 per cent on Friday.
India's second largest IT exporter by sales Infosys rose 0.94 per cent, as ADR gained 3.46 per cent. India's fourth largest IT exporter by sales Wipro jumped 1.46 per cent as ADR rose 1.2 per cent. India's largest IT exporter by sales Tata Consultancy Services rose 3.4 per cent.
The rupee hovered near a record low. The rupee quickly recovered from a weaker opening on Monday, but was unable to strengthen past Rs 50 per dollar. The partially convertible rupee was at 50.06 per dollar, little changed from its previous close of 50.09/12 on Friday. It had touched a record low of 50.60 on 20 November 2008. A weaker rupee augurs well for the sector as IT firms earn most of their revenues from exports.
India's largest commercial vehicle maker by sales Tata Motors rose 0.77 per cent on plan to raise deposits from public. Tata Motors will pay as much as 11 per cent annual interest on deposits held for three years, the company said today in a newspaper advertisement.
India's largest car maker by sales Maruti Suzuki India fell 3.7 per cent on reporting 24.4 per cent fall in vehicle sales to 52,711 units in November 2008 over November 2007.
Ashok Leyland declined 0.72 per cent on reports it has put expansion on hold due to fall slowdown in the domestic market.
Balaji Distilleries was locked at an upper limit of 5 per cent to Rs 27.75 on BSE after its board approved merger with United Spirits.
Astra Microwave Products jumped 9.89 per cent after company received an order worth Rs 57.31 crore.
Asian markets were mixed. Japan's Nikkei average fell 1.37 per cent as global recession fears prompted investors to book profits after last week's rally, with exporters such as Toyota Motor Corp slipping on a firmer yen. Key benchmark indices in South Korea and Singapore were down by between 0.47 per cent to 0.81 per cent. But key benchmark indices in China, Hong Kong and Taiwan were up by 0.07 per cent to 2.14 per cent.
Trading in US index futures indicated the Dow could fall 67 points at the opening bell as an early shopping rush in the weekend that marks the start of the Christmas shopping season in the United States, is seen unlikely to save what is shaping up to be a bleak retail sales season. Early results from the Black Friday weekend that marks the start of the Christmas shopping season in the United States showed that sales grew in shops and online, fuelled by repeat trips and deep discounts.
US stocks rose on Friday, 28 November 2008, on light volume in an abbreviated session, as investors hoped the latest government and central bank moves will boost the economy. The Dow Jones industrial average shot up 102.43 points, or 1.17 per cent, to end at 8,829.04. The Standard & Poor's 500 Index .SPX advanced 8.56 points, or 0.96 per cent, to finish at 896.24. The Nasdaq Composite Index added 3.47 points, or 0.23 per cent, to close at 1,535.57.
The US Federal Reserve on Tuesday, 25 November 2008, outlined an $800 billion lending facility to support the market for consumer debt securities. The US central bank will buy billions of dollars worth of debt and mortgage-backed securities to increase the flow of credit for mortgages, student loans, car loans and credit cards.
US light crude for January 2008 delivery fell $1.13 to $53.30 a barrel after producer cartel Organization of Petroleum Exporting Countries (Opec) decided over the weekend to delay a third supply cut to its next meeting later in December as economic woes cripple oil demand. Gulf producers want to see strict compliance with recent output curbs of 2 million barrels per day (bpd) before considering further reductions when the Organization of the Petroleum Exporting Countries (OPEC) meets in Algeria on 17 December 2008.