STIMULATION FOR BULLS

Concerns about the credit-crisis eased a bit after a report said Indian corporates raised Rs 37800 crore in Q1 March 2009 through bond sales, a record quarterly collection. Expectations of a further easing of the monetary policy by the Reserve Bank of India also supported stocks.

There will be absence of support from mutual funds in the near term. Mutual funds had supported the market last month to prop-up their net assets value for the year ended 31 March 2009 (FY 2009) which ended on Tuesday. Domestic institutional investors which includes mutual funds and insurance firms had mopped up stocks worth a massive Rs 1039.07 crore on Tuesday, 31 March 2009, as per the provisional data released by the stock exchanges. Mutual funds bought shares worth a net Rs 849.90 crore in the month of March 2009, till 30 March 2009.

Indian manufacturing activity contracted for a fifth straight month in March 2009 as demand remained depressed by the global economic downturn, although there were some signs of improvement, a survey showed on Wednesday, 1 April 2009. The new orders index rose to 49.5 in March 2009 from 45.9 in February 2009.

Signs of improvement in the manufacturing sector helped offset dismal exports data. India's exports fell an annual 21.7% in February 2009 to $11.91 billion, government data released today afternoon showed. It was a fifth straight monthly fall in exports as the global slowdown slashed demand for Indian goods. The trade deficit narrowed to $4.9 billion in February 2009 from $6.1 billion in January 2009 due to a sharp fall in imports. Imports fell an annual 23.3% to $16.82 billion in February 2009. Oil imports fell 47.5% during the month from a year earlier to $4.05 billion.

Prime Minister Manmohan Singh on 24 March 2009 said India's economy will revive in a big way in six to seven months as stimulus packages start to take effect. On the same day, Planning Commission Deputy Chairman Montek Singh Ahluwalia scaled down the GDP (gross domestic product) growth projection for the current fiscal to 6.5% from the 7.1% increase estimated by the government earlier during the year, owing to the ongoing global crisis.