The market started on a strong note and gained strength throughout the trading session as buying continued even at higher levels. Hopes of more inflows to mutual funds contributed to the rally. All the sectoral indices save one logged gains, with shares from auto, banking, real estate, capital goods and metal sector contributing to the rally, supported by firm global markets. IT pivotals, however, underperformed.
The 30-shares BSE Sensex surged 181.42 points or 1.22% at 15,092.04. This is an all-time closing high for the Sensex. It opened higher at 14,963.53, tracking upbeat global markets, and advanced to an intra-day high of 15,112.22 by 15:15 IST, coming close to crossing the all-time high of 15,114.95, which was touched on 10 July 2007. The benchmark index oscillated in a range of 148 points. However, there was absence of volatility.
The S&P CNX Nifty struck an all-time high of 4,451.95. It rose 59.15 points to 4,446.15. It also settled at its lifetime closing high. The Nifty July 2007 futures settled at 4,443.35, a slight discount of 2.8 points compared to spot closing
The market breadth was strong on BSE with a little over 2 gainers for every loser: 1,820 shares advanced as compared to 894 that declined, while 61 remained unchanged.
The BSE Mid-Cap Index 1.17% higher at 6,782.69, after striking an all time high of 6,803.35. The BSE Small-Cap Index rose 1.74% to 8,215.56. It also struck an all time high of 8,222
The turnover on BSE vaulted in last one hour of trade. BSE clocked a turnover of Rs 6,080 crore as against Rs 5,494 crore on Wednesday, 11 July 2007. Today's high turnover indicates fresh buying momentum.
The NSE F&O turnover was at Rs 43,187.29 crore as compared to Rs 34,043.56 on Wednesday, 11 July 2007.
Today's rally was despite industrial production growth slowing for the second month, in May 2007, as the highest interest rates in five years crimped demand and currency gains weakened exports. Output at factories, utilities and mines rose 11.1% from a year earlier, following a revised 12.4% increase in April 2007.
Manufacturing output was up 11.9% in May from a year earlier, the slowest pace in four months, while consumer goods output growth halved to 9.8%.
Among the Sensex stocks, 22 gained, while only five declined.
Aluminium and copper major Hindalco Industries galloped 6.94% to Rs 165.70 on high volumes of 55.31 lakh shares. It was the top gainer among the Sensex stocks. The stock advanced on hopes of consolidation of global aluminum industry. As per reports, Alcan Inc. is closer to arranging a friendly deal involving Rio Tinto as it fights a hostile $28.8-billion bid from Alcoa Inc.
Other metal shares Tata Steel (up 2.35% to Rs 670.90), JSW Steel (up 3.28% to Rs 690), Hindustan Zinc (up 0.76% to Rs 738.95), Sterlite Industries (up 5.41% to Rs 643), and Sail (up 4.72% to Rs 144.35) edged higher.
The BSE Metal Index surged 3.34% to 11,475.26, and was the top gainer among the sectoral indices on BSE.
Reliance Energy (REL) vaulted 6.50% to Rs 666.50 on its plans to invest Rs 60,000 crore to add 15,000 mega watts (MW) of power over the next five years. This will boost the company's generation capacity almost 17 times from 941 MW now. The stock was also boosted by market rumors that promoters may hike their stake in REL by 5%, taking it around to 40%
Auto shares surged on renewed buying as fears of further interest rate hike receded. The BSE Auto Index rose 1.8% to 5,006.55. Maruti Udyog (up 2.80% to Rs 828.40), Tata Motors (up 1.09% to Rs 740) and Mahindra & Mahindra (up 3.38% to Rs 807.25) gained.
Motorcycle maker Bajaj Auto advanced 3.30% to Rs 2,199 after the company said its profitability will increase in the second half of the fiscal year as it introduces new models to woo buyers deterred by higher borrowing costs.
The company reported during market hours today, 12 July 2007, a 21% decline in consolidated net profit at Rs 201.15 crore in the first quarter ended June 2007 when compared with Rs 255.77 crore in Q1 June 2006. Consolidated income from operations declined to Rs 2,206.43 crore, from Rs 2,294.28 crore.
Index heavyweight Reliance Industries (RIL) rose 1.13% to Rs 1721, on 4.19 lakh shares. The Bombay High Court today postponed, to July 18, a hearing on Reliance Industries' (RIL) appeal against an interim order that restricted it from selling gas from its block in the Krishna-Godavari basin to any company other than NTPC and Reliance Natural Resources (RNRL).
Meanwhile, RIL is reportedly preparing to bid for constructing and operating a $7 billion greenfield refinery in Central America.
Banks were in demand on a view that interest rates have peaked for the time being. The BSE Bankex was up 1.7% at 8,215.51. State-run banking major State Bank of India advanced 0.76% to Rs 1,554, while private sector banks ICICI Bank (up 1.39% to Rs 967) and HDFC Bank (up 4.49% to Rs 1,202) also advanced.
Oriental Bank (up 4.76% to Rs 254), Bank of India (up 2.69% to Rs 254.15), Bank of Baroda (up 2.05% to Rs 283.50), and Federal Bank (up 1.16% to Rs 313), also moved upwards.
Capital goods shares rallied on belief that these companies are expected to show robust growth in earning in the next couple of years on strong order book position. The BSE Capital Goods Index was up 1.5% at 12,940.79.
Stare-run engineering major Bhel surged 4.63% to Rs 1,649.50 after striking an all-time high of Rs 1,650.
Astra Microwave (up 14.27% to Rs 179.80), Bharat Bijlee (up 7.32% to Rs 2400), Alstom Power (up 6.87% to Rs 880.50), Gammon India (up 4.29% to Rs 457), and Siemens India (up 3.68% to Rs 1459.90) also advanced from the capital goods space.
Hindustan Unilever advanced 1.41% to Rs 205.25. As per reports, parent Unilever is once again seen as a takeover target. One report cited competitor Colgate-Palmolive Company of the US as a potential buyer. Unilever shares surged on the European bourses amid these rumors on Wednesday 11 July 2007. Parent company Unilever holds 36.01% in Hindustan Unilever. Parent Colgate-Palmolive Company USA holds 40.06% in Colgate-Palmolive (India). Colgate-Palmolive India was down marginally by 0.05% to Rs 381.35.
IT pivotals underperformed in a strong market. The BSE IT Index rose marginally by 0.03% to 4,870.06. Infosys (down 0.66% to Rs 1,917), and Satyam Computers (down 0.59% to Rs 478) and Wipro (down 0.02% to Rs 510.15) declined, while TCS rose 1.06% to Rs 1,159.
IT bellwether Infosys on Wednesday, 11 July 2007, cut its EPS and revenue guidance for FY 2008 in rupee terms following the rupee's surge against the US dollar.
The Indian rupee fell 1% against the dollar on Thursday due to central bank intervention. In early afternoon deals, the partially convertible rupee was at 40.60/61 per dollar, after falling to the day's low of 40.75 from high of 40.33 earlier. The rupee hit a nine-year high of 40.28 per dollar in late May 2007.
Salora International (up 20% to Rs 124.85), Murudeshwar Ceramics (up 19.96% to Rs 109.10), Stovec Industries (up 19.96% to Rs 125.90) and Sayaji Hotels (up 19.95% to Rs 73.95), were the top gainer from the small-cap and mid-cap pack
Arihant Foundations (down 7.49% to Rs 405.20), Cravatex (down 6.67% to Rs 154), Jayant Agro (down 5.31% to Rs 112.30), Birla Kennametal (down 5% to Rs 362), and Wearology (down 5% to Rs 252.15) slipped form the small-cap and mid-cap pack
GMR Infrastructure galloped 13.86% to Rs 954 on high volumes of 48.79 lakh shares. It also struck an all-time high of Rs 980 in intra-day trade on BSE. It was the top traded counter on BSE with turnover of Rs 458.54 crore. The company had bagged the tender for developing the Sabiha Gokcen International (SGA) airport in Istanbul, Turkey. SGA is the second airport in Istanbul besides Istanbul Ataturk airport, on 11 July 2007.
Real-estate stocks rallied on renewed buying interest on hopes that interest rates have peaked. The BSE Realty index, launched by BSE on Tuesday, 10 July 2007, surged today and struck an all-time high of 7,934.49. It settled 3.33% higher at 7,880.70. A heavyweight in this index, Unitech surged 6.05% to Rs 575, and another heavyweight DLF surged 3.14% to Rs 609. Indiabulls Real Estate (up 1.15% to Rs 507.15) and Mahindra Gesco Developers (up 1.67% to Rs 567.50) also gained.
Greenply Industries surged 7% to Rs 177.50 on successfully implementing its expansion project at its laminate unit at Behror, Rajasthan.
Aban Offshore rose 1.67% to Rs 3126 after Hardy Exploration & Production (India) Inc. extended its contract with the company for two years with effect from 28 July 2007. The revenue estimated during the extended period amounts to $63.875 million, the company said
VST Industries slumped 5.96% to Rs 375 on turning ex-dividend after distributing a large dividend of Rs 20 per Rs 10 share. The company's equity capital is Rs 15.44 crore, with 1.54 crore outstanding shares.
Megasoft rose 2.96% to Rs 153 after it acquired the Boston Communications Group Inc. for $65 million. The company made the announcement after market hours yesterday, 11 July 2007. The company leveraged internal accruals and long-term debts for acquiring BCGI. Founded in 1988, BCGI is a leader in providing solutions for prepaid and postpaid billing, payments and access management.
KEC International rose 1.4% to Rs 563 on bagging two Rs 176-crore contracts in Riyadh, Saudi Arabia, and Abu Dhabi, UAE. The work involves supply, erection, installation and commissioning of 380-kilo-vat (KV) transmission line comprising a total distance of 53 kilo metres (km) on the outskirts of Riyadh.
Lanco Infratech gained 8.7% to Rs 251.25. On 9 July 2007, it announced that the 500-mega watt (MW) (4x125) Teesta VI hydro power project being developed by Lanco Energy, a subsidiary of the company, in Sikkim has achieved financial closure. The project, estimated to cost Rs 3,000 crore, would be financed with a debt of Rs 2,400 crore and equity of Rs 600 crore.
Chennai Petroleum Corporation advanced 4.32% to Rs 296.95 on reporting a rise of 26.93% in net profit in Q1 June 2007 to Rs 323.15 crore as against Rs 254.58 crore in Q1 June 2006. Sales declined 2.61% to Rs 6296.61 crore (Rs 6465.61 crore). The results were announced after market hours on Wednesday, 11 July 2007.
Meanwhile, as per reports, the committee on secretaries has given a go-ahead to public sector enterprises (PSEs) to invest a part of their cash reserves, estimated at over Rs 2,50,000 crore, in mutual funds. Reports suggest that PSEs may be allowed to invest up to 10% of surplus cash in equity mutual funds.
All the Asian indices advanced today, 12 July 2007, helped by the recovery on Wall Street. However Japanese Nikkei lost 0.36% at 17,961.75, after opening higher.
Hong Kong's Hang Seng (up 0.89% at 22,809.02), Taiwan's Taiwan Weighted (up 0.68% at 9,354.41), Singapore's Straits Times (up 0.82% at 3,624.56) and South Korea's Seoul Composite (up 1.06% at 1,909.75) edged higher. China's Shanghai Composite rose 1.30% to 3,915.91.
European markets were trading mixed.
Bank of Japan (BoJ) left its key policy rate unchanged at 0.50% for the fifth month on Thursday, 12 July 2007, a widely expected move that sets the scene for a possible rate hike next month.
Wall Street bounced back on 11 July 2007, boosted by takeover activity ahead of second-quarter earnings reports. Investors, shaken by profit warnings earlier in the week, appeared to be cautiously optimistic as they awaited quarterly earnings reports. The Dow Jones advanced 76.17 points, or 0.56%, to 13,577.87.
Broader indexes also staged a rebound. The Standard & Poor's 500 index rose 8.64 points, or 0.57%, to 1,518.76, while the Nasdaq Composite index moved higher by 12.63 points, or 0.48%, to 2,651.79.
Oil prices were higher on Thursday, 12 July 2007 as the market continued to fret over US gasoline (petrol) reserves. New York's main oil futures contract, light sweet crude for August 2007 delivery, was eight cents higher at $72.64 a barrel. Brent North Sea crude for August 2007 delivery rose 10 cents to $75.54.