Key benchmark indices retreated from higher level on selling pressure in index heavyweight Reliance Industries. Market breadth, however, remained positive.
Planning Commission Deputy Chairman Montek Singh Ahluwalia on Monday said the government will come out with a second stimulus package for this fiscal and another package for fiscal year 2009-10 in the next few days to spur economic growth.
With industrial production contracting by 0.4% in October 2008, for the first time in 15 years, and the exports declining by over 12% during the month, the government came out with a stimulus package on 7 December 2008 to spur growth and help the industry combat the impact of global financial meltdown.
As part of the stimulus package, the government cut excise duty by 4% across the board, except on petroleum products, and announced raising of the public expenditure by Rs 20,000 crore to boost demand.
Meanwhile, Prime Minister Manmohan Singh has reportedly directed the Reserve Bank of India (RBI) to reduce the mandatory cash reserve ratio (CRR) for banks and short-term interest rates. Reports suggest that the RBI may cut the CRR by one percentage point that will give banks more headroom to lend. It may also slash the short-term lending rate (repo rate) and the short-term borrowing rate (reverse repo rate) for banks by half percentage points each.
Asian markets were trading firm today, as rally in shares of energy companies triggered by higher oil prices offset concerns that increased fuel costs will drag on corporate earnings. Key benchmark indices in Hong Kong, Japan, South Korea, Singapore, Taiwan were up by between 0.08% and 3.91%. However China's Shanghai Composite fell 0.14%.
Wall Street slid on Monday, after Kuwait pulled out of a joint venture with Dow Chemical due to the deepening global recession, threatening Dow's planned takeover of Rohm & Haas. The Dow Jones industrial average slipped 31.62 points, or 0.37%, to 8,483.93. The S&P 500 index fell 3.38 points, or 0.39%, to 869.42; the Nasdaq composite index fell 19.92 points, or 1.30%, to 1,510.32.
