Dalal St welcomes new year with a rally

The Sensex which lost 52.4 per cent in 2008 shrugged off weak economic data and surged on buying support from funds. It ignored the dip in exports by 9.9 per cent in November 2008 to 11.5 billion, a second consecutive monthly drop as the global slowdown slashes demand. 8220;A further fall in inflation will provide room for the Reserve Bank of India to further cut interest rates,8221; dealers said. Inflation, measured by wholesale price index, fell to around 10-month low to 6.38 per cent in the week ended 20 December 2008 from 6.61per cent in the previous week, data released by the government showed.

The market is also awaiting a second government stimulus package for the economy. 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.

8220;We will see the bottom in the first quarter and I think the rally will continue on throughout 2009. I think 2009 could be a very strong year for stocks,8221; said an analyst who expected the market to recover 20 per cent in 2009.