The Indian stock market opened on a positive note on the first day of the week starting February 9. The markets were buoyed with the news of new fiscal incentives in the two interim budgets (railways and general) which will be presented before the Parliament within a week?s time. There was widespread buying seen across all sectors with which helped markets post significant gains. But according to brokers, the primary reason for such optimism in the market was due to the expectations that the US Senate would give green signal to the third massive stimulus package. Significant buying was observed in capital goods, metals and energy stocks. Although strong buying action was absent from the markets, but the main reason for stocks surging higher was considerable easing of selling pressure, brokers said. With the global financial crisis continuing to put pressure on financial, manufacturing and farm output sectors, the Central Statistical Organisation considerably lowered the country?s GDP growth for 2008-09 from 9 per cent to 7.1 per cent. But as per the advance estimates for national income, the growth in per capita income will grow by 14.4 per cent in the current fiscal. Clearly, this is the slowest pace the economy will grow in the last six years. According to the government, this is an achievement when most the world economies are facing the ills effects of deepening recession.
In stock market India news, the key growth drivers for the markets will be sector-specific tax concessions. The current finance minister Pranab Mukherjee is extremely worried about the state of the economy that we went on records to say that once again the outlook for 2009 is downbeat. And therefore, the government could be planning a slew of measures to provide extension of tax relief for export units in the interim budget. The slowdown might come as a blessing in disguise for the government which might look at delivering the parting gift to the electorate. The government?s 7 per cent growth target for this year seems increasingly farfetched and further sops could also raise pressure on already mounting fiscal pressure, thus pushing up government borrowings. The BSE 30 share Sensex, surged to an intra-day high of 9,602, before ending the day at 9,584 gaining 283 points. During the day, BSE Metal index surged by 4.5 per cent to 5,334 while the Capital Goods index posted 4 per cent gains. On the same line, there was a marginal improvement in trading volumes, which includes both F&O and cash segments, from Rs 38,000 crore last week to Rs 44,000 crore. Among the top gainers were Tata Steel, Reliance Infrastructure, Sterlite and Jaiprakash Associates. In stock market news, the month of February has been pretty positive for the global markets considering the flow of bad news during the last few months. Analysts believe the Indian stock market is catching up to, with key indices expected to gain over 10-15 per cent over the next one month. However, local investors are still not clear about taking a direction call on markets. But with lot of bad news (including Satyam fiasco and Q3 earnings) behind us the market could see some fresh buying in the coming days.