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Major events of 2009: INDIA

For India, 2009 till now, been a great year with the return of a stable government at centre, good FII inflow, 72% increase in the Indian stock market and less terror attacks. But H1N1 influenza and a series of bankruptcy by some big international giants are some events, which we never want to happen again.

Some major events of the year in India

January 2009

The year 2009 started with a positive wave when Indian Government,?in tandem with RBI, announced the much-awaited Second Stimulus Package, aimed at reversing the?economic slowdown. Also, RBI slashed its main policy rates to protect faltering economic growth amid the global slowdown. Reverse Repo rate cut by 1% to 4.0% and CRR cut by 0.5% to 5.0%. The government eased the foreign borrowing rules for firms, mostly in the infrastructure and real estate sectors, and raised the foreign investment limit in corporate bonds to $15 billion.

On Jan,20, Mr. Barack Obama inaugurated as the 44th President of the U.S., lifting the sentiments that recovery will be faster.

The aftermath of Satyam Scam were dragged in the month of January and Indian key indices lost ~2.5 % on the back of a scam that raised questions over the corporate governance issues & financial credibility of the companies.

February 2009

India came up with December month IIP data (-2%) and Q4′09 GDP numbers (5.3%), which were far below the expectations. India saw a big jump in local car sales by 34% on Y-o-Y basis.

The global recessionary trends emerged large over the market sentiments with Sensex shedding 5.7% & Nifty losing 3.87% in February.

President Obama signed the $787 billion economic stimulus package into law, which included a variety of spending measures and tax cuts, intended to promote economic recovery. US also came with its decreasing fourth quarter GDP at an annual rate of 6.2 percent.

March 2009

Indian govt. again cut the Repo (from 5.5% to 5%) and Reverse Repo (4% to 3.5%) rate to increase the liquidity into the system. The global recessionary trends took a breather amidst a slew of Revival Packages from all major economies across the globe. So did the Indian markets and they ended the March month on a positive note gaining 9%.

April 2009

India Inc. reported its quarterly & yearly results, which were better than expected. The month saw strong FII inflows.

But on the later half of the month, Swine Flu declared, apart from it, US?s first quarter GDP also decreased at annual rate of 6.1 percent. Then, in US, the automobile manufacture Chrysler LLC filed for bankruptcy.

The March month?s positive vibes influenced the April month also and Indian markets gained 17% during the April month.

May 2009

The biggest news in May was the Return of UPA government to powerin the 15th Indian general election. The victory was followed by first ever double upper circuit on the markets in the history, with key indices gaining 28% in the month of May. The FII recorded a net inflow of Rs. 13,886 crs in the month. But in this monh, India also confirmed first cases of (A) H1N1 influenza.

June 2009

June came with some bad bunch of news around the world. In India, Indian weather department declared delay in monsoon and stock markets saw FII outflows. On the whole, the market closed on a negative note. In US, General Motors filed for bankruptcy, then the first quarter GDP decreased at annual rate of 5.5 percent.

July 2009

July month saw a good quarterly earning numbers and huge overseas inflows. GoI also announced the financial sector reforms and stake sale in PSUs in order to raise funds.

On the US front, the economic news was mixed but mostly positive. Despite a drop in consumer confidence, better than expected GDP numbers, boost in new home sales and home prices, and rise in the Chicago PMI report all pointed to stabilisation in the economy.

August 2009

The month of August saw a mixed action on the India front. Government drafted a new direct tax code on hopes of higher disposable income in hand of individuals. There were concerns about rainfall deficit & drought being declared across various villages of the country.

On the economic front, the India`s GDP grew to 6.1% in Q1 June 2009, that was lower than 7.8% achieved in Q1 June 2008 but it was better than the 5.8% expansion witnessed in Q4 2009.

There was a sharp surge in food prices in the August due to scanty rains that might stoke inflationary pressures in the economy. But the revival in the monsoon rains cheered the prospects for rice and sugar cane. The weak monsoon led cut in kharif crop production by 18%.

Further, the planning commission projected the GDP growth rate of 6.3% for the current fiscal year and a growth rate of 8% in the coming fiscal before the economy returns to 9% growth in 2011-12.

BSE also launched its IPO index, (which will track companies with a free-float market capitalization of at least 1 billion rupees on listing day.)

On the whole, the Indian markets closed on a flat note.

In US, second quarter GDP fell 1 %, unchanged from the advance estimate in July and following a 6.4% drop in Q1.

September 2009

The ringing of the festival season brought improvement in sales in consumer driven segments. Another positive was that India’s exports fell by annual 19.4 per cent in August Vs 28.4 per cent in July as demand for merchandise picked up in the big global markets ahead of Christmas.

Interest rate futures was reintroduced, which was a significant step towards developing the debt market in India.

October 2009

India recorded a positive set of IIP numbers to 10.4%, which were above the expectations.

The traditional pre-Christmas sell-offs by FIIs had advanced by a couple of months this year. India Inc also saw poor corporate results from some of the giants. The markets shed over 7%.

In US, the third quarter GDP increased at an annual rate of 3.5 percent. The Dow closed above 10,000 for the first time in a year.

November 2009

The IIP numbers, India’s industrial output, grew 9.1% in September from a year earlier, helped by fiscal stimulus and festival demand adding to the debate on the timing of exit policy.

Next in line was a slightly cautious number for that of the wholesale price based inflation data which would now be announced on monthly basis instead of every week. The wholesale price index was up 1.34% in October from a year earlier, compared with 0.5% in September and 11.06% a year ago.

Another interesting and a positive number was India’s strong GDP data that cheered the investor sentiment that the economic recovery is gaining momentum. India’s economy grew at a spectacular 7.9% in the July-September period, up from 6.1 % in the previous quarter, bolstered by government stimulus measures and rising industrial production. The growth compares favorably to 7.7 % recorded in the July-September quarter in the previous year.

NSE launched a platform for trading mutual fund units, called Mutual Fund Service System on?Nov. 30?for trading mutual fund units, with an aim to widen the reach of mutual fund schemes to smaller cities and towns and cut operational costs.

Internationally, crude oil made its 1 year high at $82 and CIT group filed for bankruptcy in US.

Overall, Indian markets gained 7% in this month.

December 2009

Gold made its life time high at $1,226, other commodities like sugar also made its high in the Indian markets at ~$8.5.

India witnessed the IIP numbers at 10.3%, which were below the expectations of 12%.

Till now, from Jan 2009 to till now, Indian key indices have seen an increase of 72% in its value.

The news of $80billion Dubai debt default came. The market expected it a second wave of recession.?After Dubai, S&P and Fitch downgraded Greece’s credit rating. Then, S&P revised?Spain’s outlook to negative.