Economic News

December fiscal deficit declined sharply to $19.7 billion on 9% rise in tax collection. The deficit at the end of nine months ending in December 2007 stood at 51.4% of the target of 1.51 trillion rupees. Government expenditures in the period were at 4.74 trillion rupees and revenues were 3.97 trillion rupees with a fiscal deficit of 775.78 billion.

The sharp decline in deficit will improve government’s ability to increase its infrastructure spending and repay external debts.

Market Sentiment

Stocks in India closed weak on Thursday with the Bombay Stock Exchange benchmark index sliding 0.6% or 109 to 17,648. In the broader markets, Nifty fell 0.6%. The 50-share index closed at 5,137 levels.

The market had opened on a firm note after the US Federal Reserve slashed the key interest rate by 50 basis points on Wednesday but it lost ground during the late trading session. It had recovered in the afternoon trade but failed to sustain higher levels as European markets were trading lower after a positive start. Buying was evident in oil and gas stocks while selling was visible realty, banking and healthcare shares.

Of the BSE 1,760 shares declined, 989 stocks advanced while 40 shares remained unchanged. Of the index shares 16 fell while the rest advanced.

ONGC, Hindustan Unilever, Bajaj Auto and HDFC Bank led the positive sentiment in the BSE index with a rise of 2% or more.

Of the NSE-50 stocks, Nalco, Zee Entertainment, Wipro and Idea Cellular were among key gainers with a rise of 4.3% or more.

Hindalco, GlaxoSmithKline, ACC and Punjab National Bank were among key draggers in the broader index with each falling 3.6% or more.

Trading turnover on the BSE was recorded at 5,152 crore rupees while on the National Stock Exchange was at 21,087 crore rupees.

Reliance Industries was the most active stock recording a turnover of 304 crore rupees followed by Reliance Natural Resources, Reliance Energy, Reliance Petroleum and Essar Oil.

International Markets

The U.S. Federal Reserve lowered interest rates by 0.5% to 3%, a second rate cut in eight days. Eight days ago, the Fed had lowered rate by 0.75% ahead of the regular scheduled meeting to calm jittery international markets.

Elsewhere in the Asian region, South Korea rose 2.3%, Japan added 1.9%, Hong Kong fell 0.8%, but Thailand increased 2.7%.

Market Gainers and Losers

Of the BSE shares, Hindalco Industries led the decliners in the Sensex index. The company fell 6% to 165.5 rupees.

Hindustan Unilever led the advancers in the Sensex index with a rise of 5.3% to 207 rupees.

DLF fell 5.2% to 817, ICICI Bank shed 3.1% to 1,148 rupee, and State Bank of India shed 2.8% to 2158.75 rupees.

Infosys surged 1.6% to 1,516 rupees. Wipro and TCS gained 1.7% each to close at 418.9 and 880.3 rupees respectively. Satyam Computers however declined 0.4% to 393.1 rupees.