Bank stocks lead a near 3% Sensex surge

Bank stocks led the rally on the domestic bourses in late trade, with gains in key overseas equity markets supporting the upmove. The BSE Sensex jumped 293.44 points or 2.84%. Bank stocks surged on hopes interest rate cuts would help credit flow more freely. But IT stocks tumbled on worries outsourcing business will be affected if Barack Obama wins the US presidential election.

Trading in US index futures suggested the Dow would rise 187 points at the opening bell. European markets, which opened after Indian market, extended gains in morning trade led by banks, oils and pharma stocks, as investors geared up for the long-awaited US Presidential election day. Key benchmark indices in France, UK and Germany were up by between 1.74% to 2.12%.

Japan's Nikkei average climbed 6.27% to its highest close in two weeks on Tuesday, 4 November 2008, as exporters gained on reports electronics maker Panasonic was planning to take over Sanyo Electric. But other Asian markets were mixed. Key benchmark indices in South Korea, China, and Taiwan were down by between 0.05% to 0.76%. Key benchmark indices in Hong Kong and Singapore were up by between 0.24% to 2.15%.

Australia's All Ordinaries index moved between positive and negative zone after Australia's central bank cut its benchmark cash rate by a bigger-than-expected 75 basis points on Tuesday, 4 November 2008, in an increasingly urgent effort to save the economy from the recession rapidly engulfing much of the developed world.

The BSE 30-share Sensex rose 293.44 points or 2.84% to 10,631.12. Volatility was high. After an early slide, a sharp recovery was witnessed in afternoon trade following a solid surge in Japanese shares and on a rate cut by Australia's central bank. The index rose 330.80 points at the day's high of 10,668.48 in late trade. The Sensex declined 221.46 points at day’s low of 10,116.22 in early trade.

The S&P CNX Nifty was up 98.25 points or 3.23% to 3,142.10.

The market has staged a solid rebound after a recent steep fall. From a low of 8,509.56 on 27 October 2008, the BSE Sensex has risen 2,121.56 points or 24.93% in five trading sessions. There has been a massive erosion in investors' wealth this year. The barometer index BSE Sensex is down 9,655.87 points or 47.59% in the calendar year 2008 so far from its close of 20,286.99 on 31 December 2007. It is 10,575.65 points or 49.86% below its all-time high of 21,206.77 struck on 10 January 2008.

BSE clocked a turnover of Rs 4416 crore today, 4 November 2008 as compared to a turnover of Rs 3,679.49 crore on 3 November 2008.

Nifty November 2008 futures were at 3167, at a premium of 24.90 points as compared to spot closing of 3142.10. NSE's futures & options (F&O) segment turnover was Rs 33,758.52 crore, which was lower than Rs 34,113.94 crore on Monday, 3 November 2008.

The BSE Mid-Cap index was up 2.7% at 3,446.12 and the BSE Small-Cap index was up 2.75% at 4,035.11. Both the indices underperformed the Sensex.

The BSE Realty index (up 12.14% to 2,402.44), ), the BSE Bankex (up 6.56% to 5,741.04), the BSE Power index (up 5.66% to 1,781.38), the BSE PSU index (up 4.82% to 5,078.65), BSE FMCG index (up 4.77% to 1,961.19), the BSE Capital Goods index (up 4.61% to 7,942.57), the BSE Metal index (up 4.13% to 5,854.67), the BSE Oil & Gas index (up 3.09% to 6,749.51) outperformed the Sensex.

The BSE IT index (down 4.33% to 2,749.95), the BSE Teck index (down 0.82% to 2,200.80), the BSE HealthCare index (up 0.75% to 2,879.38), the BSE Consumer Durables index (up 1.01% to 2,125.78), the BSE Auto index (up 1.67% to 2,791.56), underperformed the Sensex.

The market breadth was strong. On BSE, 1,809 shares advanced as compared to 777 that declined. 69 shares remained unchanged.

India's largest private sector company by market capitalization and oil refiner Reliance Industries (RIL) came off the lower levels on reports it is considering options to re-open most of its closed petrol pumps, helped by an over 50% drop in crude oil prices. The stock was up 2.01% to Rs 1466, off the day's low of Rs 1,376.

Ranbaxy Laboratories (up 9.88% to Rs 209.15), Jaiprakash Associates (up 9.82% to Rs 89.45) and Tata Power Company (up 8.32% to Rs 750.95) were the top gainers from the Sensex pack.

India’s largest electric equipment maker by sales Bharat Heavy Electricals (BHEL) rose 5.38% on reports it is planning to triple export orders to Rs 10300 crore by 2012 in a bid to hedge against currency fluctuations related to raw material imports.

India’s largest copper maker by sales Sterlite Industries fell 2%.

Bank stocks jumped on reports public sector banks are likely to cut deposit and lending rates by 50 to 75 basis points within one week. India’s largest commercial bank State Bank of India rose 6.5% extending gains after its chairman O P Bhatt said today the bank was likely to cut interest rates by up to 50 basis points.

Punjab National Bank, Bank of India, Union Bank of India, Federal Bank, IDBI Bank, Canara Bank, Indian Overseas Bank, Allahabad Bank and IndusInd Bank rose by between 1.75% to 11.61%.

A few public sector banks have already announced their decision to cut rates. Bank of Baroda rose 15.49% on a decision to reduce lending rates by 75 basis points (bps) with effect from Wednesday 5 November 2008.

However, Indian Bank fell 1.53% after the bank said it will consider cutting its lending and deposit rates by 50-75 basis points this week.

India’s largest private sector bank by net profit ICICI Bank rose 6.53% as American depository receipt (ADR) spurted 4.18% overnight. ICICI Bank's chief executive K.V. Kamath said yesterday, 3 November 2008, the bank will review interest rates in the next few days.

India’s second largest private sector bank by net profit HDFC Bank rose 3.73% as ADR jumped 4.18% on Monday.

India’s largest home loan lender by operating income HDFC jumped 1.31%.

Finance Minister P Chidambaram today said the Reserve Bank of India (RBI) will keep a close watch on liquidity and state-run banks are ready to provide credit to the small and medium business sectors. The finance minister today met the chiefs of state-run banks.

The Reserve Bank of India (RBI) on Saturday, 1 November 2008, unexpectedly cut its main short-term lending rate viz. the repo rate to ease a growing cash squeeze, spur faltering economic growth and fend off damage from the global financial crisis.

Most realty stocks rose on hopes lower interest rates will spur demand for residential properties. Realty majors, Indiabulls Real Estate and Unitech jumped by between 12.48% to 14.49%. India’s largest real estate major by market capitalization DLF soared 14.66% to after denying reports that suggested its joint venture with Hilton was in trouble.

IT stocks tumbled on worries that if Barack Obama wins the US presidential election, the outsourcing business of the country will be curtailed and the direct impact will be on IT sector. India's third largest IT exporter by sales Satyam Computer Services fell 7.41%.

India's fourth largest IT exporter by sales Wipro fell 4.8% even as ADR rose 3.5%. Wipro is reported to be a front-runner to buy Citi group's technology and infrastructure outsourcing arm, Citi Technology Services, for about $150 million and is likely to be announced by the end of the third quarter. India's second largest IT exporter by sales Infosys slipped 5.47%, as ADR was down 2.7%.

India's largest IT exporter by sales Tata Consultancy Services slipped 7.38%.

Zylog Systems rose 2.08%, after the company’s board approved acquisition of PEQ Consulting Inc and Fairfax Consulting Inc.

Democrat Obama has strong reservations on outsourcing and has made many statements during his election speeches that he would discourage this when he comes into power. The US Presidential Election will be held later in the day today.

Airline stocks soared on reports of further reduction in jet fuel prices. Jet Airways, Kingfisher Airlines and SpiceJet rose by between 3.55% to 6.23%.

Responding to the government’s decision to exempt jet fuel from customs duty three days ago, state-owned refiners have reportedly reduced the prices of the fuel by 4.5%. Earlier, there were anticipations that the next revision in aviation turbine fuel (ATF) prices may happen on 15 November 2008.

PSU OMCs rose on fall in crude oil prices. BPCL, HPCL and Indian Oil Corporation rose by between 1.43% to 6.86%. Lower oil prices will reduce underrecoveries at the state-run oil firms on domestic sale of petrol, diesel, LPG and kerosene at a controlled price.

US sweet crude oil dropped $1.19 to $62.72 a barrel today as traders continued to worry about the impact of a global economic slowdown on energy demand.

Cement stocks were mixed on muted dispatches figures for the month of October 2008. India’s largest cement maker by sales ACC fell 1.04% as cement shipments in October 2008 fell 3.4% to 1.70 million tonnes from 1.76 million tonnes a year earlier. Grasim Industries rose 2.78% and Ultratech Cement jumped 5.54% after Aditya Birla Group's cement dispatches in October 2008 rose 1.9% from a year ago to 2.54 million tonnes. The group includes flagship Grasim Industries and unit Ultratech Cement, with combined cement production capacity of 35 million tonnes a year.

Telecom stocks rose on reports government will allocate spectrum for next generation wireless networks to successful bidders by the end of January 2009 after holding an auction as planned earlier in the month. India’s largest telecom services provider by market share Bharti Airtel jumped 4.31% while Reliance Communications, India’s second largest telecom services provider by sales rose 7.67%.

Rice exporters Lakshmi Energy & Foods, KRBL and LT Overseas were up 2.23% to 11.13 % on reports India would include the premium Pusa-1121 rice under the basmati brand, helping fetch higher prices.

Mercator Lines jumped 10.74%, on Singapore unit posting 94.4% surge in net profit to $24.9 million in Q2 September 2008 over Q2 September 2007.

Champagne Indage was locked at the upper limit of 5% on BSE after a foreign fund bought a large stake in the company.

Suzlon Energy surged 20.57% after the company said it was negotiating with Portugal-based Martifer for acquiring the latter's 22.48% stake in the German firm REpower.

Siemens rose 11.8% on BSE, on bagging an overseas order.

Epic Energy gained 1.34% on bagging a contract to conduct energy audit in Arunachal Pradesh.

KEC International surged 10%, on bagging three orders aggregating Rs 235 crore from three different clients.

Balaji Telefilms slipped 4.84% as the Bombay High Court dismissed company's petition not to end a long-running daily serial on Star TV.

Sun Pharmaceutical Industries declined 4.71% on BSE, after its US unit Caraco Pharmaceutical Industries got a warning letter from the Food and Drug Administration regarding its Detroit plant.

Suzlon Energy clocked the highest volume of 3.92 crore shares on BSE. Cals Refineries (2.31 crore shares), Unitech (1.7 crore shares), Reliance Natural Resources (1.7 crore shares) and GVK Power & Infrastructure (1.66 crore shares) were the other volume toppers in that order.

Reliance Industries clocked the highest turnover of Rs 279.78 crore on BSE. Suzlon Energy (Rs 206.23 crore), State Bank of India (Rs 186.09 crore), Reliance Capital (Rs 184.76 crore) and ICICI Bank (Rs 151.46 crore) were the other turnover toppers in that order.