Sensex jumps 285 points from the day's low

Buying resumed on the bourses today after Wednesday's (23 September 2009)'s slide that followed a rally in the preceding five days. But volatility ruled the roost as traders rolled over derivatives contracts from September 2009 series to October 2009 series ahead of today's expiry of September 2009 contracts. Recovery in US index futures aided a strong intraday rebound on the domestic bourses in late trade.

Index heavyweight Reliance Industries (RIL) reversed losses in choppy late trade soon after the company announced during trading hours that it has signed a gas supply pact with NTPC. Banking, realty and FMCG stocks jumped. The BSE 30-share Sensex rose 61.93 points or 0.37%, up about 285 points from the day's low and off close to 55 points from the day's high.

The S&P CNX Nifty settled below the psychological 5,000 mark after crossing that level in intraday trade. Nifty had fallen below the 5,000 mark on Wednesday after closing above that mark on Tuesday for the first time in 16 months.

Intraday volatility was high. The market edged lower amid a bout of early volatility on subdued Asian stocks. It cut losses after hitting a fresh intraday day low in morning trade. The intraday recovery gathered steam in early afternoon trade on recovery in Chinese stocks. The market weakened again in afternoon trade on weak European stocks and lower US index futures. The market moved in a narrow range in mid-afternoon trade. In a trend reversal, the key benchmark indices reversed losses in late trade.

Rollover in S&P CNX Nifty futures surged to about 55% at the end of Wednesday's trading from about 36% at end of Tuesday's (22 September 2009) trading. Rollover in Mini Nifty futures was about 43%.

Global stocks were mostly in the red on concerns the US Federal Reserve may act earlier than expected to unwind some of its extraordinary stimulus measures.

Closer home, investors are worried that a glut in share sales may suck liquidity from the secondary market. The corporate sector has raised large sums of money through equity and equity related instruments in the past six months or so to either to retire high cost debt or to fund expansion. The supply of paper by Indian firms appear limitless, raising concerns that additional share sales will suck liquidity from the secondary market.

As per one report, companies plan to raise at least Rs 40,000 crore through initial public offers (IPOs)/follow on public offers (FPOs) in the second half of the current financial year. Power companies such as GMR Energy, Indiabulls Power and JSW Energy and state-run Bharat Heavy Electricals and NTPC are likely to tap the primary market. Reliance Infratel also announced on Tuesday, 22 September 2009, its intention to raise Rs 5,000 crore from the primary market. A number of companies are also in the fray to raise funds by way of qualified institutional placement (QIP), reports suggest.

Three Indian firms and in one case promoters of a company raised about Rs 3000 crore in a single day on Wednesday, 23 September 2009. Majority of the fund raising was routed through share sale in the secondary markets through the stock exchanges mechanism.

Meanwhile, Indian companies and individuals have also started borrowing from banks to build factories, buy cars and homes, taking advantage of low interest rates, another sign that economic growth may accelerate. The uptick is reflected in the latest data unveiled by the Reserve Bank of India. Bank loans aggregated Rs 56,303 crore more in Q2 (July-11 September 2009) compared to a drop of Rs 7456 crore in Q1 (April-June 2009).

The Asian Development Bank (ADB) on Tuesday, 22 September 2009, raised its forecast for India's economic growth this year by 1 percentage point to 6%. On Wednesday, Finance Minister Pranab Mukherjee said India's economic growth in the September 2009 quarter will be better than in the June 2009 quarter. The economy grew an annual 6.1% in the April-June quarter, the first of 2009/10 fiscal year.

Mukherjee had said on Saturday, 19 September 2009, that the Centre will not roll back the stimulus package given to the industry in wake of the global economic meltdown till signs of clear recovery are visible across recession-hit US and Europe. The Finance Minister also said on that day that the nation's equities index is moving steadily and authorities will avoid disturbing the pattern.

India's exports fell an annual 19.7 % in August 2009, as the global slump hit demand for Indian goods, Trade Minister Anand Sharma said after market hours on Thursday.

Nevertheless, there is optimism about Q2 September 2009 results after advance tax collections registered a positive growth in the second quarter after witnessing a negative growth in the first quarter. Corporate advance tax and advance personal income-tax were up by 14.7% and 1.7%, respectively in the September 2009 quarter. Higher advance tax payment indicates good Q2 September 2009 results from India Inc. next month.

India's headline inflation rate rose for the second straight week, data released by the government during trading hours today showed. Inflation based on the wholesale price index rose 0.37% in the year through 12 September 2009, higher than previous week's gain of 0.12%. The food article index was responsible for the rise in inflation. The index surged 15.64%.

The government revised upwards headline inflation for the week ended 18 July 2009 to a fall of 0.54% from a provisional decline of 1.54%.

Meanwhile, the world economy is likely to be the focus of a two-day G20 financial summit in Pittsburgh that begins today. The G20 leaders will discuss overhauling global financial regulation and fixing long-term imbalances in the world economy. The G20 leaders are also considering ways to rein in bank bonuses that many say contributed to the global financial crisis by encouraging excessive risk-taking. Bank bonuses are part of the G20 agenda to consider ways to reshape global financial rules after the 2008-2009 crisis.

European shares fell on Thursday, with lower crude prices weighing on energy stocks. Bank share were also under pressure. Key benchmark indices in France, Germany and UK were down by between 0.23% to 0.3%. A closely-watched gauge of German business sentiment posted a smaller-than-expected rise in September 2009.

Asian shares were mixed. China shares rose 0.38% on Thursday, reversing losses earlier in the day, on the back of gains in financial stocks. Japanese stocks which opened today after a long holiday rose 1.67% as brokerages upgraded Toshiba Corp. and Fast Retailing Co.

But commodity stocks led other Asian markets lower after raw-material prices declined. Key benchmark indices in Hong Kong, South Korea, Singapore and Taiwan were down by between 0.71% to 2.52%.

US index futures fell in volatile trade. Trading in US index futures indicated Dow could fall 14 points at the opening bell today, 24 September 2009.

US market fell on Wednesday as investors worried the Federal Reserve is closer to pulling back on extraordinary measures to inject funding to shore up the economy. The Dow Jones industrial average fell 80.79 points, or 0.82 % to 9,749.08. The Standard & Poor's 500 Index lost 10.77 points, or 1% to 1,060.89. The Nasdaq Composite Index gave up 14.88 points, or 0.69 % at 2,131.42.

The Federal Reserve's policy-setters on Wednesday kept interest rates unchanged, as expected, but they also said the US central bank would slow purchases of mortgage debt to extend that program's life until the end of March 2010. That was seen as a step toward a measured withdrawal of its extraordinary support for the economy during the downturn.

The BSE 30-share Sensex rose 61.93 points or 0.37% to 16781.43. The Sensex rose 114.60 points at the day's high of 16,834.10 in late trade. The barometer index fell 224.58 points at the day's low of 16,494.92 in morning trade.

The S&P CNX Nifty rose 16.60 points or 0.33% to 4,986.55. It hit a high of 5016.70 in late trade. Nifty October 2009 futures were at 5002 at a premium of 15.45 points as compared to the spot closing of 4986.55. Turnover in NSE's futures & options (F&O) segment spurted to Rs 1,16,850.34 crore from Rs 91,178.35 crore on Wednesday, 23 September 2009.

BSE clocked turnover of Rs 5363 crore, lower than Rs 6741.80 crore on Wednesday, 23 September 2009.

The BSE 30-share Sensex fell 166.93 points or 0.99% to 16719.50 on Wednesday 23 September 2009. The Sensex had jumped 672.24 points or 4.14% in five trading sessions to 16886.43 on Tuesday 22 September 2009 from a recent low of 16,214.19 on 14 September 2009 to 16886.43 on Tuesday 22 September 2009. The Sensex is up 7,134.12 points or 73.94% in calendar year 2009 as on 24 September 2009. From a 3-year closing low of 8,160.40 on 9 March 2009, the Sensex is up 8,621.03 points or 105.64% as on 24 September 2009. FII inflow in the calendar year 2009 totaled Rs 51,059.10 crore (till 22 September 2009).

Coming back to today's trade, the BSE Mid-Cap index rose 0.74% and the BSE Small-Cap index rose 0.46%. Both the indices outperformed the Sensex.

The BSE Bankex (up 1.48%), the BSE Healthcare index (up 0.91%), the BSE FMCG index (up 0.73%), the BSE Realty index (up 0.67%), the BSE PSU index (up 0.44%), the BSE Capital Goods index (up 0.39%), outperformed the Sensex.

The BSE IT index (down 1.49%), the BSE Metal index (down 1.13%), the BSE Consumer Durables index (down 0.77%), the BSE Auto index (down 0.67%), the BSE Teck index (down 0.57%), the BSE Oil & Gas index (up 0.02%), the BSE Power index (up 0.34%), underperformed the Sensex.

The market breadth, indicating the overall health of the market turned positive in contrast to a weak breadth earlier in the day. On BSE, 1,460 shares rose as compared with 1,289 that declined. A total of 85 shares remained unchanged.

Among the 30-member Sensex pack, 18 rose and rest fell.

Index heavyweight Reliance Industries (RIL) rose 0.14% to Rs 2,104.40, rebounding from the day's low of Rs 2,058.60 after the company said it has signed gas supply agreement with state-run utility NTPC to supply gas for some of its power plants for five years. Reliance will supply 0.61 million standard cubic metres a day (mscmd) to NTPC, and expects to start supplies within a week. NTPC rose 1.97%.

Meanwhile, recent report suggest the outlook for Asian oil refiners, previously hit by a sharp fall in margins, is now improving on a likely ramp-up in demand and slowing capacity expansion.

RIL stock was under pressure late last week following a large treasury share sale by the company in the secondary market. Petroleum Trust on Thursday sold 1.5 crore equity shares of RIL through block deals on the bourses at Rs 2125 per share. The financial impact of the transaction will be reflected in the consolidated statements, RIL said.

Reliance Industries on Tuesday said that it has fixed 29 September 2009 as the record date for shareholders of Reliance Petroleum (RPL) to receive equity shares of Reliance Industries under a merger scheme.

Oil exploration stocks fell as oil prices tumbled on Wednesday after a US government showed a surprise increase in crude stock piles. India's biggest state-run oil exploration firm by revenue Oil & Natural Gas Corporation (ONGC) fell 1.08%. ONGC on Wednesday said it will invest over Rs 5000 crore in the next two years in bringing new oil and gas finds into production, even as it projected a 15% rise in crude production to 29 million tonnes by 2012-13. Cairn India fell 1.47%. Fall in crude oil prices would result in lower realizations from crude sales for oil exploration firms.

PSU OMCs rose as fall in crude oil prices will reduce underrecoveries on domestic sale of petrol, diesel, kerosene and LPG at controlled prices. HPCL and BPCL rose by between 1.64% to 3.19%. Indian Oil Corporation (IOC) rose 1.5%. The company's board approved a liberal 1:1 bonus issue on 14 September 2009. Crude oil for November 2009 delivery fell $2.79, or nearly 4%, to settle at $68.97 a barrel on Wednesday.

The government last week issued bonds worth over Rs 10,306 crore to three oil marketing PSUs to compensate them for the losses incurred on account of selling petroleum products below market price. While bonds worth Rs 6,207.06 were issued to IOC, Rs 2,033.99 crore worth bonds were given to HPCL and Rs 2,065.28 crore worth of bonds were given to BPCL.

India's largest telecom player by sales Bharti Airtel rose 1.42%. Finance minister Pranab Mukherjee said on Wednesday that the Indian government backs the proposed merger of Bharti Airtel and South Africa's MTN Group and it was looking into legal aspects related to a dual listing.

Bharti Airtel on Tuesday said that the merger talks with South African major MTN will be compliant with the laws in both countries. The company said that it will approach relevant authorities for approvals or exemptions, if required, at the appropriate time. Stock market regulator Securities & Exchange Board of India's (Sebi) amendment in takeover norms on Tuesday whereby the applicability of takeover norms has been extended to GDRs/ADRs, may make fructification of the Bharti-MTN merger deal difficult.

Bharti and MTN have been in negotiations since 25 May 2009 on a $23 billion cash and share-swap deal aimed at an eventual full merger. The deadline for the talks has been extended twice, most recently the deadline was put back another month to 30 September 2009.

India's second largest telecom player by sales Reliance Communications rose 2.14%. The company's chairman Anil Ambani at the annual general meeting held on Tuesday, 22 September 2009 said company hopes to achieve 100 million subscribers by March 2010 from the current 85 million subscribers.

Anil Ambani also said that the company will consider a qualified institutional placement at an appropriate time. He added that Reliance Communication (RCom)'s capital expenditure may decline significantly this year following the rollout of its GSM network in 2008/09. Meanwhile, the company on 22 September 2009, announced that its board approved a proposed listing of its telecom tower unit Reliance Infratel. The net issue will constitute 10% of the post-issue paid-up equity capital of the company.

FMCG pivotals rose on revival of India's annual monsoon since mid-August. FMCG firms derive substantial revenue from the rural sector. Nestle India, Marico, ITC, Hindustan Unilever, Britannia Industries rose by between 0.6% to 2.6%.

India's largest engineering and construction firm by sales Larsen & Toubro rose 1.4% after firm announced during market hours today of winning an order worth more than Rs 2000 crore from GMR Energy.

Among other capital goods stocks, Siemens, SKF India, ABB, Siemens rose by between 0.4% to 1.15%.

Realty stocks reversed early losses on reports demand for residential projects in major cities is picking up on lower home loan rates, property price cuts by developers and a recovery in the job market. Realty market had slumped last year amid a global credit crunch and buyers fearing job losses. DLF, Omaxe, Indiabulls Real Estate and Unitech, rose by between 0.22% to 2.08%.

Banking stocks reversed early losses on higher advance tax payment by some top banks in the second installment this fiscal. India's largest private sector bank by net profit ICICI Bank rose 1.74% even as its ADR fell 1.26% on Wednesday. The bank has reportedly finalised sale of Point Of Sale (PoS) terminals to First Data Corporation for $ 80 million.

India's largest bank by net profit and branch network State Bank of India rose 0.75%. Chairman O.P. Bhatt on 8 September 2009 said the bank's earnings are likely to grow 30-35% in Q2 September 2009 over Q2 September 2008.

India's second largest private sector bank by net profit HDFC Bank rose 3.39%. Its ADR rose 0.64% on Wednesday.

Shares of select public sector banks rose on recent reports the World Bank is likely to provide $2 billion, or nearly Rs 10000 crore, to the government to recapitalise public sector banks. Union Bank of India, Bank of Baroda, Punjab National Bank, rose by between 0.43% to 1.6%.

India's largest dedicated housing finance firm by revenue HDFC jumped 3.39% on expectations of good Q2 September results. HDFC has reportedly paid advance tax of Rs 320 crore in the second installment of 15 September 2009 compared to Rs 290 crore in the same period a year ago.

Some IT stocks reversed early losses. India's third largest software services exporter by sales Wipro rose 2.21% to Rs 578.95. The stock came off the day's low of Rs 560 on reports company has won a three-year IT services contract from Aquarion Water Company, one of the largest water utilities in the United States.

Meanwhile, some media reports suggest that Wipro plans to explore options to sell its development centre in France due to extensive employee protests against shutting it down. The centre employs about 60 people.

India's largest IT exporter by sales Tata Consultancy Services rose 1.38%. TCS has secured a five-year Rs 140-crore project to build and operate a state-wide area network in southern Andhra Pradesh state.

But, India's second largest software services exporter by sales Infosys fell 3.4% on concerns of higher expenses after a report it plan to give pay rises and promotions next month.

Metal stocks fell as LMEX, a gauge of six metals traded on the London Metal Exchange fell 1.6% on Wednesday, 22 September 2009. Tata Steel, Steel Authority of India, Jindal Saw, Hindalco Industries, fell by between 1.37% to 3.98%.

India's largest copper maker by sales Sterlite Industries fell 0.83% Sterlite Industries (India) today said a power plant chimney under construction at BALCO, Korba collapsed. Relief and rescue operations are underway with the involvement of the company and the government resources, Vedanta said. Activities in this particular area have been temporarily suspended while existing operations remain unaffected.

Sterlite said on Monday that it would release Grupo Mexico from a potential legal liability of nearly $8 billion if the Indian miner can win control of bankrupt US copper miner Asarco LLC.

In a court document filed on Monday, Sterlite said that if a federal court approves its plan to acquire Asarco over rival bidder Grupo Mexico's offer, it would not hold Grupo Mexico liable for more than about $900 million of liability related to the 2003 transfer of a Peruvian mine. Sterlite, a unit of India-focused mining company Vedanta Resources, has been facing off with Mexican miner Grupo Mexico for acquiring control Asarco, which has been under bankruptcy protection since 2005.

Cement stocks fell on profit taking. ACC, Ambuja Cements, Ultratech Cement fell by between 0.56% to 1.3%. A thrust on the infrastructure sector in the Union Budget 2009-2010 may keep cement demand strong. But cement makers recently cut prices by Rs 3 per 50 kilogram bag in Mumbai.

Construction shares reversed losses as higher government spending on infrastructure sector in the Union Budget 2009-2010 to provide a stimulus to the economy, may result in increase order flow for construction. Hindustan Construction Company, Gammon India, Gayatri Projects, Era Infra Engineering rose by between 1% to 3.24%.

The government has set a target of spending $20 billion a year on road construction.

Jaiprakash Associates rose 1.28%, recovering from Wednesday's fall. The company on Wednesday raised around Rs 1,190 crore through sale of 5 crore treasury shares in bulk deals.

Auto stocks fell on profit taking after recent sharp gains. Auto stocks have rallied in the past few days on hopes of strong sales in the upcoming festive season. India's top small car maker by sales Maruti Suzuki fell 1.17%. India's largest tractor maker by sales Mahindra & Mahindra fell 0.51%. India's largest motorbike maker by sales Hero Honda Motors fell 1.59%.

As per reports, the government will release pay arrears to government employees under the second and final installment ahead of big festivals in October 2009. The payout would boost demand for cars and motorcycles.

India's largest truck maker by sales Tata Motors fell 0.82%. Tata Motors said after market hours on Thursday it is to consolidate two Jaguar Land Rover (JLR) auto plants in central England by 2014.The company said there would be no compulsory redundancies, and it is in talks about a significant new model development programme which could create new jobs. Commercial vehicle makers reportedly plan to raise prices in the range of 1-3% on pick up demand.

Domestic car sales rose 26% to 120,669 units in August 2009 over August 2008 boosted by new launches and availability of cheaper loans, data released by the industry body Society of Indian Automobile Manufacturers on 8 September 2009, showed. Sales of trucks and buses rose 18.5% to 40,624 units and motorcycle sales rose 26% to 611,173 units.

Tyre stocks rose on strong replacement demand. MRF, Apollo Tyres, JK Tyre & Industries, CEAT rose by between 0.09% to 9.71%.

Sugar stocks rose even as farm minister Sharad Pawar today said the government will extend permission for tax-free imports of white sugar beyond November 2009. The move is aimed at keeping a lid on prices of the commodity which have risen sharply due to fall in production. Shree Renuka Sugars, Dhampur Sugars, Bajaj Hindustan and Balrampur Chini rose by between 0.7% to 1.81%.

Union Cabinet late last week extended limits on stocks that can be held by traders of sugar until September 2010.

Cals Refineries clocked highest volume of 18.07 crore shares on BSE. Wire & Wireless (2.09 crore shares), Suzlon Energy (1.31 crore shares), Ispat Industries (1.05 crore shares) and Unitech (0.84 crore shares) were other volume toppers in that order.

Educomp Solutions clocked highest turnover of Rs 167.37 crore on BSE. Reliance Industries (Rs 151.90 crore), Tata Steel (Rs 126.01 crore), AIA Engineering (Rs 122.36 crore) and Suzlon Energy (Rs 121.21 crore) were other turnover toppers in that order.