A bout of volatility was witnessed as the key benchmark indices regained strength in early afternoon trade on buying in select pivotals. A recovery in Asian markets after an initial slackness and higher US index futures helped the domestic bourses to reverse early losses. The BSE 30-share Sensex was up 72.87 points or 0.46% to 16,008.48, up 145.58 points from the day's low and off 17.57 points from the day's high. The Sensex regained the psychological 16,000 mark.

The market breadth was positive. Cement stocks gained on reports of price hike effective from 1 February 2010. IT stocks gained on bargain hunting after a recent fall caused by disappointing US economic data. Infrastructure stocks gained on fresh buying. Auto pivotals saw divergent trend. However, rate sensitive realty shares declined on fears a hike in interest rate following inflationary pressures in the domestic economy.

Market had seen a dull start after the US markets suffered a severe setback on Monday with the Dow sliding below the 10,000 mark. Rising fears of possibility that the government may start to unwind its fiscal stimulus in the forthcoming budget and budget deficits in Europe may slow the global economic recovery had also helped triggered the early fall. The market staged a strong intraday rebound in morning trade as Asian stocks rose. The market erased all its gains and slipped into the red briefly in mid-morning trade. Sustained buying demand in select pivotals triggered a recovery in early afternoon trade.

Most Asian indices were trading higher today, 9 February 2010, reversing early fall. The key benchmark indices in China, South Korea, Hong Kong, Singapore and Taiwan were up by between 0.14% to 2.01%. However, Japan's Nikkei 225 index fell 0.19%.

US markets edged lower on Monday, 8 February 2010, as investors sold financial shares due to heightened concerns about the euro zone's sovereign debt troubles, sending the Dow below the psychological 10,000 mark for the first time since November 2009. The Dow Jones Industrial Average slid 103.84 points, or 1.04%, at 9,908.39. The Standard & Poor's 500 Index dropped 9.45 points, or 0.89%, at 1,056.74. The Nasdaq Composite index declined 15.07 points, or 0.70%, at 2,126.05.

Trading in US index indicated the Dow could rise 23 points at the opening bell on Tuesday, 9 February 2010.

According to EPFR Global, that tracks foreign inflows, emerging market equity funds lost $1.6 billion in weekly withdrawals, the biggest outflows in 24 weeks. The report further added that investors pulled out almost $1 billion from global emerging market stock funds in the week ended 3 February 2010, the most in more than a year.

Markets across the globe have been under pressure recently following the recent European fiscal woes, rising US jobless claims and China holding back bank lending

While fears over possible sovereign defaults in Greece, Portugal and Spain gripped global markets, the possibility of a contagion to other European economies causing a double-dip recession worsened the mood. Credit default swaps in several European countries are on the rise, indicating a certain lack of reliability on government debt.

Back home, equities have been in a tailspin recently following unwinding of dollar carry trade, muted expectations in the run-up to the Union budget 2010-11 and concerns over valuations. Rising fears of possibility that the government may start to unwind its fiscal stimulus in the forthcoming budget also added to woes.

With barely weeks to go before the presentation of the Railway Budget 2010-2011, the Ministry said it has registered earnings of Rs 70,501 crore in the 10 months from 1 April 2009 to 31 January 2010, an 8.5% increase over the Rs 64,943.32 crore it recorded during the same period the previous year. The national transporter booked approximately 600 crore passengers, a 5% increase over last year, the railways said in an emailed press statement.

Government on Monday, 8 February 2010, forecast its economic growth for the fiscal year ended March 2010 at 7.2%, as against 6.7% achieved in the previous fiscal, raising fears of possibility that the government may start to unwind its fiscal stimulus in the forthcoming budget. The advance estimates of the country's gross domestic product released by the Central Statistical Organisation (CSO) forecasts a growth of 9.9% in services and 8.9% in manufacturing, the highest among the eight broader economic activities.

Earlier, Reserve Bank of India Governor Duvvuri Subbarao on 29 January 2010 raised India's growth forecast to 7.5% in the year ending March 2010 and said the central bank will target inflation in the next few months. He estimated inflation to accelerate to 8.5% from 6.5% forecast earlier.

The government will announce the industrial output data for the month of December 2009 on Friday, 12 February 2010. The industrial output rose 11.7% in November 2009. Also inflation numbers in the week ended 30 January 2010 will be out on Thursday. Stock markets remains shut on Friday on account of Mahashivratri.

Chairman of the prime minister's economic advisory council C. Rangarajan recently said the government is no hurry to roll back economic stimulus measures in one go. He also said that efforts will be made in the budget later this month to lower the fiscal deficit. It has been pointed out repeatedly that the process of exit must be gradual, coordinated and must not be sudden, should not disrupt the economy and efforts will be made to bring down the fiscal deficit in the coming budget, Rangarajan said.

As regards government's divestment plan, Rural Electrification Corporation (REC) will be the next Government- owned entity to come out with a follow-on public offer (FPO). Its 17.1-crore share FPO will open on 19 February 2010 and will close on 23 February 2010. This will be followed by NMDC's FPO.

As per reports, in the next fiscal, the Government is likely to divest its stake in state-run firms such as Engineers India, Coal India through initial public offers (IPOs) and Power Grid and Sail through FPOs.

India can gradually start raising interest rates as Asia's third-largest economy is among the first to recover after the global financial crisis, the International Monetary Fund (IMF) said in a report published on 4 February 2010 on its website. India's economy is one of the first in the world to recover and the central bank should take a gradual approach to ensure the recovery reaches its full potential, the IMF report said.

Following rising prices of potato and pulses, food inflation rose to 17.56% in the week ended 23 January 2010 from 17.40% in the previous week, government data released on Thursday showed. The inflation for primary articles, which include food and non-food items, marginally eased to 14.56% in the reporting week from 14.66% in the previous week. The fuel price index rose 5.88%

Pronab Sen, the country's chief statistician, said last week the government should wait till May to roll back stimulus, as the strength of the demand recovery visible in available data may not be for real, pulling the finance minister, Pranab Mukherjee, away from a policy direction which the Reserve Bank of India (RBI) desires.

At 12:20 IST, the BSE 30-share Sensex was up 72.87 points or 0.46% to 16,008.48. The index opened 5.12 points higher at 15,940.73. At the day's high of 16,026.05, the Sensex rose 90.44 points in morning trade. The Sensex lost 72.71 points at the day's low of 15,862.90 in early trade.

The S&P CNX Nifty was up 25.45 points or 0.53% to 4784.10

The market breadth, indicating the overall health of the market, was strong. On BSE, 1449 shares advanced as compared with 1107 that declined. A total of 92 shares remained unchanged.

The total turnover on BSE amounted to Rs 1939 crore by 12:25 IST as compared with Rs 1581 crore by 11:25 IST

From the 30-member Sensex pack, 20 gained while the rest slipped. Reliance Infrastructure (down 1.23%), HDFC (down 0.65%), and Hindalco Industries (down 0.49%), edged lower from the Sensex pack.

Cement stocks gained on reports prices are again on the boil. India's largest cement producer by sales ACC jumped 3.04% to Rs 867 and was the top gainer from the Sensex pack.

UltraTech Cement (up 1.71%), India Cement (up 2%), Shree Cements (up 3.35%), Madras Cement (up 2.35%), and JK Lakshmi Cement (up 4.23%), advanced.

After a series of rises since November 2009, a fresh round of price increase, effective from 1 February 2010 by almost all manufacturers has pushed the rate up by Rs 3-5 for a 50 kg bag, pushing the average national price to about Rs 235. In November, the average rate was Rs 210-215 a bag.

Index heavyweight Reliance Industries (RIL) slipped 0.49% to Rs 991.45. As per reports, RIL has submitted a $2 billion expression of interest for Value Creation Inc, a Canada-based private firm which holds oil sands assets.

India's largest power utility firm by sales NTPC rose 0.07% to Rs 202.55. The company's follow on public offer managed to scrape through with the issue getting subscribed 1.2 times. The issue, through which the government is divesting 5% of its stake, at a floor price of Rs 201 a share, opened on 3 February 2010 and closed on 5 February 2010. At the floor price, the follow-on-public offer (FPO) is valued at Rs 8,286 crore.

IT stocks rose on a recent steep slide of the rupee against the dollar. India's second largest IT exporter by sales Infosys surged 2.05%.

India's third largest software services exporter Wipro rose 1.74%. As per recent reports, Wipro Consumer Care and Lighting, the FMCG arm of Wipro, is in advanced talks to buy Nigeria-based skincare company, Tura International.

India's largest IT exporter by sales Tata Consultancy Services gained 1.76%. Reportedly TCS' Passport Seva Project, which aims to issue passports in flat three days, is all set to be launched in a week or two.

The Indian rupee strengthened on Tuesday from a seven-week trough reached in the previous session, as broadly higher Asian peers lifted sentiment. It was hovering at 46.67/68 a dollar, higher than its close of 46.83/84 on Monday.

A weak rupee boosts revenue of IT firms in rupee terms as the sector derives a lion's share of revenue from exports

Infrastructure stocks rose after road transport and highways minister Kamal Nath reportedly set the ambitious target of building roads at the rate of 20 kilometer a day to be achieved by June 2010. He had earlier said this would be done by April.

Larsen & Toubro (up 0.76%), Jaiprakash Associates (up 0.99%), GVK Power & Infrastructure (up 0.11%), Lanco Infratech (up 3.04%), and Gammon India (up 0.24%), rose.

India's largest power equipment maker by sales Bharat Heavy Electricals rose 0.52% after it secured a contract for the electro-mechanical equipment package for a 1,200 megawatt hydroelectric project in Bhutan valued at Rs1,016 crore.

Nagarjuna Construction Company rose 0.32% after the company bagged five orders aggregating Rs 583 crore. The company announced winning fresh orders during trading hours on Monday, 8 February 2010.

Jyoti Structures rose 1.87% after the firm said its board will meet on 15 February 2010 to consider issuing non-convertible debentures carrying a right to subscribe to equity shares, on rights basis.

India's top small car manufacturer by sales Maruti Suzuki India fell 0.66%. As per reports the company expects a 20% growth in sales and hopes to double its exports to around 1.6 lakh units this fiscal ended March 2010.

However India's biggest tractor maker by sales Mahindra & Mahindra (M&M) rose 0.82%. Reportedly M&M and Britain's BAE Systems plan to inject a total of $21.25 million over a three-year period into their joint venture company Defence Land Systems India. The joint venture firm will roll out high mobility vehicle Axe, armoured and bulletproof Scorpios, Boleros, Rakshak, rapid intervention vehicles and the Marksman light-armoured vehicles.

Rate sensitive realty shares declined on fears a hike in interest rate following inflationary pressures in the domestic economy. India's largest realty firm by sales DLF lost 1.41% to Rs 307.05 and was the top loser from the Sensex pack.

Strides Arcolab jumped 5.42% after the company received approval from the US Food & Drug Administration for labetalol hydrochloride injection. The company made the announcement during trading hours today, 9 February 2010.