GOI announces the Fiscal stimulas package 2.0 , for INDIA INC releases Rs: 25k cr..

The Central Government of India gave INDIA Inc the a good NEW YEAR gift by announcing the second fiscal stimulus package which can be the last for this fiscal, the focus of which is to provide more liquidity and cut the cost of funds. “The scale of liquidity potentially available through this window is Rs.25,000 crore,” said Ahluwalia, who briefed reporters here, after it was approved by Prime Minister Manmohan Singh.This came almost a month after the first on December 7' 2008 and covers a series of measures aimed at easing credit delivery to sectors impacted most by the economic slowdown, but contains limited deficit-financed government spending.
The second instalment liberalised overseas borrowing norms, restored benefits to exporters, set up an alternative channel of finance for non-banking finance companies and allowed state-run India Infrastructure Finance Company Ltd (IIFCL) to issue additional tax-free bonds.
Exporters, too, will benefit with an extension of the duty-entitlement passbook (DEPB) scheme and enhanced duty drawback benefits on items like knitted fabrics, bicycles, farm hand tools and some categories of yarn.
Apart from the higher depreciation benefit, the automobile industry can benefit from an arrangement that is being worked out with leading public sector banks to provide a line of credit to lending institutions to finance commercial vehicles.
The realty industry can benefit from the permission to use external commercial borrowings if intended for the development of integrated townships, while enhancing the level of credit for micro units.
In order to give a boost to the corporate bond market, foreign institutional investment limit in rupee-denominated securities would be increased from $6 billion to $15 billion.

With the package the government is hopeful of seven per cent growth and there won't be another package till June.
Now we have to watch whether this will act as just a sentimantal booster to the entire industry or will result in a helping hand to the economic slowdown.

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RBI cuts repo and crr

RBI Cuts REPO RATE by 100bps and CRR by 50 bps.

The Reserve Bank of India has cut the cash reserve ratio by 50 basis points, and both the repo and reverse repo rates by 100 bps. (100 bps=1%) The repo rate, after the cut, now stands at 4% from the 4.5% earlier.
In a statement, RBI said, “The global financial situation continues to be uncertain. Since the official recognition of recession in the US, the UK, the Euro area and Japan, the downside risks to the global economy have increased. On a review of current global and domestic macroeconomic situation, the Reserve Bank decided to take the measures.”
The release added, “The reduction in the CRR will inject additional liquidity of around Rs 20,000 crore to the financial system. It is expected that the reduction in the policy interest rates and the CRR will further enable banks to provide credit for productive purposes at appropriate interest rates. The Reserve Bank on its part would continue to maintain a comfortable liquidity position in the system.”

"The fundamentals of our economy continue to be strong. Once the crisis is behind us, and calm and confidence are restored in the global markets, economic activity in India would recover sharply. But a period of painful adjustment is inevitable," it stated.

Source Moneycontrol.com

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Nifty Futures Jan-09 - Pivot - 3025
Resistance : 3074 - 3102 - 3152
Support : 2996 - 2947 - 2918

Bank Nifty Futures Jan-09 - Pivot - 5029
Resistance : - 5088 - 5188 - 5247
Support : 4929 - 4870 - 4770

INTRADAY Trade:
Polaris has shown a good technical move, buy above 46 sl 42 tgt 52 >> 55
IDFC seen good accumulation in the recent days, Buy
NTPC if sustains above 181 with a stoploss of 177 upside trend till 185/189 SL 179
BHEL , buy above 1405 SL 1380 upside trend till 1460

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Sell below 998 S/L 1009 Tgt  985  - 979

CAIRN
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