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Tuesday, October 09, 2007

Sensex gains 789 points in biggest single-day rally


Sensex surged further towards the latter part of the trading session after touching a milestone of 18,000 in mid-afternoon trade, as worries of an early election eased. The rally was led by gains in top private firm and index heavyweight Reliance Industries. Realty, capital goods and metal stocks surged. All the sectoral indices on BSE were in green. Market breadth was strong. Most Asian markets ended in green today. European markets were trading mixed.

The BSE 30-share Sensex ended up 788.85 points, or 4.51%, to 18,280.24, an all-time closing high. It hit an all-time high of 18,327.42 in late trade. Sensex opened with an downward gap of 89.15 points at 17,402.24 and soon declined to hit intra-day low of 17,287.19 in early trade before bouncing back. At day's low of 17,287.19, Sensex had lost 204.2 points for the day.

Sensex completed its 17,000 to 18,000 journey in just 8 trading sessions, the second fastest 1,000-point rally ever. The market had hit 17,000 mark on 26 September 2007.

The broader based S&P CNX Nifty ended up 242.15 points, or 4.76%, to 5,327.25, a record closing high. It hit an all-time high of 5,348.70 in late trade today. It had hit a low of 5000.95 in early trade.

Equity markets in seven other Asian countries also rose to records today.

The Congress-led United Progressive Alliance (UPA) government at the centre and its communist allies stepped back from the brink on Tuesday, 9 October 2007, agreeing to meet again this month to resolve a row over a nuclear deal with the United States. The next meeting of the UPA-Left committee which is looking into Left Front’s concerns over nuclear deal will be held on 22 October 2007. The committee held its fourth meeting in New Delhi today, 9 October 2007.

The meeting was held in the backdrop of widening of rift on the nuclear deal with Left parties rejecting a plea of the government that it be allowed to engage in negotiations with International Atomic Energy Association (IAEA) over the nuke deal.

The fact the two sides would meet again signaled that the communists, whose parliamentary support keeps the ruling coalition in power, would not withdraw their support for the government immediately which the stock market had feared. The market soared soon after today's UPA-Left meeting got over some time in afternoon.

BSE clocked a turnover of Rs 7793 crore compared to Rs 8036.49 crore on Monday 8 October 2007. NSE's futures & options (F&O) segment clocked a turnover of 82,362.26 crore today, 9 October 2007 compared to a turnover of Rs 69,842.2 crore on 8 October 2007.

Nifty October 2007 futures were at 5,337 at a premium of 9.75 points or 0.18% to spot price of 5,327.25.

All the 30-Sensex stocks were in the green. The market breadth was quite strong on BSE: 1,754 scrips advanced, 930 declined, while 380 remained unchanged.

The BSE Mid Cap index rose 2.59% to 7,398.70 and BSE Small Cap index rose 2% to 8,976.76. However, both the indices underperformed Sensex.

Reliance Energy surged 11.17% to Rs 1,533.65 and was the top gainer from the Sensex pack. It hit an all-time high of Rs 1,542 today. Reliance Communications rose 10.13% to Rs 705.85. It hit an all-time high of 714.90 today. Reliance Capital rose 8.72% to Rs 1,768.35.

Maruti Suzuki was up 7.8% to Rs 1,105.35. It hit an all-time high of Rs 1,115 today. NTPC rose 6.38% to Rs 217.70.

India’s largest private company in terms of market capitalisation and oil refiner Reliance Industries rose 7.59% to Rs 2,600.45. It hit an all time high of Rs 2,615.40 today. Reliance Industrial Infrastructure hit 5% upper circuit at 1,868.70.

Metal stocks bounced back from Monday's fall. Tata Steel (up 5.78% to Rs 834.60), Hindalco Industries (up 1.52% to Rs 164) and JSW Steel (up 5.69% to Rs 849.95) edged higher.

State Bank of India rose 6.01% to Rs 1,889.75.

Infosys rose 2.38% to Rs 2,048, extending its recent solid rebound. Infosys will announce Q2 September 2007 results on Thursday, 11 October 2007.

A total of seven brokerages expect a between 0.58% fall to a 4.6% rise in Infosys’ consolidated net profit as per Indian GAAP to between Rs 1,072.70 crore to Rs 1128.70 crore in Q2 September 2007 compared to net profit of Rs 1,079 crore Q1 June 2007. They expect a between 6.8% to 9.7% growth in Infosys’ revenue at between Rs 4,028.60 crore to Rs 4,138.40 crore in Q2 September 2007 compared to revenue of Rs 3,773 crore in Q1 June 2007.

Capital goods stocks surged. Larsen & Toubro (L&T) rose 4.73% to Rs 3,163.20 after it announced that Indian Oil Corporation (IOCL) has awarded an order valued at Rs 693 crore to the company.

Wind turbine maker Suzlon Energy rose 1.61% to Rs 1,673.20 after its US subsidiary Suzlon Energy Corp received a 400 mega watt contract from Houston-based Horizon Wind Energy. Bharat Heavy Electricals was up 2.1% to Rs 2,236.75 after it said it won a contract worth Rs 394 crore to build a power plant in southern state of Andhra Pradesh.

Among side counters, Phoenix International (up 20% to Rs 30), Intellvision Software (up 20% to Rs 147.80), iGate Global Solutions (up 20% to Rs 317.10), Atul Auto (up 20% to Rs 83.85) Shriram Transport Finance Company (up 17.69% to Rs 226.85) edged higher.

Chembond Chemicals (down 11.04% to Rs 175.25) and Ritesh Properties and Industries (down 8.82% to Rs 53.25) and Alka Securities (down 7.95% to Rs 11.46) edged lower.

Sundram Fasteners rose 0.3% to Rs 49.85 after the company said its new unit near Chennai started production from 1 September 2007 and it made the first shipment to General Motors on 3 October 2007.

Wipro was up 4.18% to Rs 489.30 on reports the company is eyeing US-based Dell’s captive contact centre business outside the US.

KPIT Cummins Infosystems was up 0.88% to Rs 115.10 after it said it would consider preferential issue of shares to Cummins Inc at a price to be determined later.

Kilburn Engineering rose 0.67% to Rs 52.35, after it received orders worth Rs 5.90 crore from various companies for dryers and spares.

Patel Engineering was up 3.45% to Rs 490.75 on a buzz that the company is getting its land bank valued by global real estate advisors DTZ and Knight Frank.

Petron Engineering Construction rose 6.43% to Rs 285.45 after it secured a Rs 1.35 crore order for supplying chimney and other accessories to Moser Baer India.

IVRCL Infrastructures & Projects rose 6.69% to Rs 440.25 after it announced today, 9 October 2007, it has secured lift irrigation contract worth Rs 761.24 crore from Irrigation & CAD Department, government of Andhra Pradesh.

Prism Cement rose 4.56% to Rs 63, after it announced today, 9 October 2007, its net profit rose 134.04% to Rs 51.84 crore in Q1 September 2007 over Q1 September 2006.

Jyoti rose 5.11% to Rs 131.70, after it announced today, 9 October 2007, its net profit rose 429.55% to Rs 2.33 crore in Q2 September 2007 over Q2 September 2006.

GAIL (India) moved up 5.69% to Rs 385.25 after its Chairman U.D. Choubey today said the board of the company would take a decision on a bonus issue within six months.

European markets were trading mixed. They had earlier opened in the red. France's CAC was up 0.18% to 5,839.87. UK's FTSE 100 was up 0.88% to 6,598.40. Germany's DAX was up 0.14% at 7,985.71.

Most of the Asian markets, which opened before the Indian markets, were trading in green today. Taiwan's Taiwan Weighted index (down 0.8% to 9,639.83) edged lower. Hong Kong’s Hang Seng (up 1.65% to 28,228.04), Singapore’s Straits Times (up 1.19% to 3,865.75), Korea’s Seoul Composite (up 0.07% to 2,014.13) and Japan's Nikkei (up 0.56% at 17,159.90) edged higher.

Q2 September 2007 results are the next major trigger for the market. Figures of advance tax suggest that earnings will be decent to strong. IT bellwether Infosys Technologies kickstarts reporting season on Thursday, 11 October 2007.