Andrew L Dcunha

Mumbai, Aug 23: With several blue chip stocks holding gains on sustained support, the market remains fairly high up in positive territory in early afternoon trade today. A good recovery in most of the markets in the Asian region and positive cues from European markets contributed to the buoyant mood on the Indian bourses today. Hopes of more stimulus from the US central bank also buoyed markets. U.S. stock futures pointed to a strongly higher start for Wall Street Tuesday, with sentiment boosted by Chinese data and expectations Federal Reserve Chairman Ben Bernanke will signal readiness later this week to support the struggling economy. 

 The Sensex, which had dropped to a low of 16,213 in early trades, recovered in noon deals on back of buying in technology, consumer durables, capital goods and realty stocks. The Sensex touched a high of 16,549 - recovering  334 points from the day's low. However, it pared some gains towards close and ended at 16,498 - up 157 points. And the Nifty ended 50 points higher at 4,949.Biggest gainers in the 30-share index were Tata Consultancy Services (6.60%), Bajaj Auto (5.32%), Infosys Technologies (4.51%), Bharat Heavy Electricals (2.62%), Hindustan Unilever (1.55%), and Tata Steel (1.46%)  This rally in IT stocks today  was probably on the back of Software Body, NASSCOM stating that it is confident that the IT industry will grow at a projected rate of 16-18% in the financial year 2011-12

European markets opened on a firm note . The CAC and DAX gained 1.7% each, while the FTSE was up 1.2% in trades.   Asian markets posted a strong rebound Tuesday after a string of recent losses as data showed an improvement in Chinese manufacturing activity and optimism the Federal Reserve may take steps to boost the U.S. economy.  South Korea’s Kospi  and Taiwan’s Taiex — the two regional indexes that rank among this month’s biggest losers posted the biggest gains, rising 3.9% to and 3.3% respectively  Hang Seng gained 2%

Decline of GOLD intensity

Gold futures dropped Tuesday, snapping their recent rally, as global equity markets posted gains, buoyed by better-than-expected data from China. Gold futures on Tuesday afternoon declined more than 1 percent % from earlier record high.  On the domestic front, gold of 99.9% and 99.5% purity fell by Rs 350 each to Rs 28,190 and Rs 28,040 per 10 grams, respectively

Plan panel scales down fiscal targets

The Planning Commission has given the Centre fiscal consolidation targets that are relaxed compared to the recommendations by the 13th Finance Commission.

The Planning Commission projected the Centre’s fiscal deficit to come down to three per cent of the gross domestic product (GDP) by the third year (2014-2015) of 12th Five-Year Plan, and stay there for remaining two periods, even though one-time payments like spectrum sale or disinvestment in public sector units are unlikely to fetch too much revenues as a proportion of the GDP.  Officials now say the approach paper to the 12th Five-Year Plan assumes the fiscal deficit number to come down largely on the back of buoyant tax collections. The fiscal deficit projections are based on the assumption of 14 per cent nominal GDP growth rate a year on an average in the 12th Plan, comprising 9 per cent GDP growth and 5 per cent inflation.

Andrew L D Cunha, Managing Director, WinWin Fin  Advisory Pvt. Ltd. Mangalore. Email:  finadvisoryltd@yahoo.com