Indian market witness an upward trend

Mixed response witnessed in Indian Capital Market during the month of November. In terms of figures it was
definitely an upward trend. Indian indices recorded a decent growth in November. Renewed buying interest and
investor confidence along with some good news were the main factors behind the growth story. But the recent
news of Dubai crisis affected not only Indian market but markets all over the world. Later it has been proved as
an over reaction. The unsatisfactory monsoon during 2009 is another concern for Indian Capital Market. The
growth figures of the country came as a relief for India Inc as a whole.
During November Bombay Sensitive Index recorded a growth of 6.48 percent against it's last month figure to
close at 16926. Sensex was with in the range 15331-17290 in November. Nifty gained 6.81 percent against it's
October closing and the rate is 5033. Buying interest witnessed across Midcap and Smallcap stocks. They
increased by 6.67 percent and 6.57 percent respectively.
Buying interest spread across all sectors except reality. Recent Dubai crisis was the main reason behind the sell
off in reality counter during November. Real Estate stocks were down by 4.36 percent. Metal stocks were the
major gainers in November, up by 16.87 percent which is a record for the beaten down sector during the
financial crisis. Auto sector was up by 11.26 percent, thanks to the auto buying interest expressed by Indian
consumers. Health Care and PSU sector stocks were up by more than 8 percent.
Indian market continued to be the hot spot for FIIs during November also. They bought equities worth Rs. 5497
Crore. But the domestic Institutions continued their selling for the second consecutive month. Rs. 695.60 worth
equities were sold by them in November. FII inflow played a lead role in the 1030 point increase in sensex. It is
assumed that money pumping by FIIs will continue in the recent future owing to India's shining growth figures.
In the July-September quarter Indian GDP rate is at 7.9 percent which was unexpected by the street. In the first
quarter the rate was 6.1 percent. Altogether India grew at a rate of 7 percent in this financial year sofar. There is
confidence that we will achieve the projected target of 6.5 percent growth in FY09-10. The insufficient monsoon
is major concern in the coming quarter. Due to this the farm growth will definitely decline which will have an
impact on all other sectors. Mining, Manufacturing and Electricity were the major sectors contributed largely to
the growth figures in the second quarter. Natural Gas production in the country increased significantly. Which is a
silver lining in the growth story of India.
Reports are coming from Dubai about the recent crisis. Indian Indices over reacted when report about the crisis
first came. During trading hours sensex was down by over 600 points and Nifty by over 200 points. But both
Indices came back strongly and the severe reaction lasted only for one day. Dubai asked for a freeze on its US $
80 billion debt due to troubles at Dubai World – the emirate's corporate arm. This came as a shock for the world.
Primary reports said that it was the beginning of another financial crisis. But later the picture became clear and
there will be limited impact on Indian market due to Dubai crisis.
Looking forward the dust over financial crisis finally settles down. Indian market emerged winner among
developing nations-the continued FII inflow proves the same. Sensex started the year 2009 at 9721, the
November closing figure is 16926 with an upward inclination. Sometimes there were selling pressure but Indian
market overcame it in style. Now Indian investors can invest in Mutual Funds through NSE terminals. The
inauguration of the same took place on 30th November. It is a drastic change in Indian capital market. It is
believed that this move will increase retail participation in the market. Now investors can contribute to the growth
story of India by investing continuously.

Pramod Thomas.