Market soars on firm global stocks

The key benchmark indices soared tracking firm global stocks after China reported continued strength in industrial production growth, keeping alive hopes of a recovery in the global economy. The market resumed its upmove after taking a pause on Tuesday, 10 November 2009, after a solid surge in the preceding four trading session. Equities shrugged off Cyclone Phyan which is expected to bring heavy rains to Mumbai, the commercial capital. Latest reported suggest that the cyclone has bypassed Mumbai at 14:00 IST.

The S&P CNX Nifty breached the psychological 5,000 mark in late trade. The Nifty had last closed above the 5,000 level on 21 October 2009.

The BSE 30-share Sensex jumped 409.04 points or 2.49%. Metal, auto, realty, capital goods and IT stocks rose. Index heavyweight Reliance Industries surged in late trade. The market breadth was strong.

The market moved between positive and negative zone in early trade. It surged in mid-morning trade. The market extended gains later.

As per provisional data, foreign funds today, 11 November 2009, bought equities worth a net Rs 861.84 crore. Domestic fund bought stocks worth a net Rs 90.52 crore

The market sentiment has been boosted by Prime Minister Manmohan Singh's announcement on Sunday, 8 November 2009, that financial reforms, such as building up a domestic bond market and expanding foreign investment in sectors like insurance, would be pushed forward.

A cyclone alert has been sounded across north Maharashtra and south Gujarat, besides coastal areas, by the Meteorological Department (IMD), in the wake of a deep depression over the Arabian Sea. The cyclonic storm, referred by the IMD as Phyan, was likely to intensify further and move towards south Gujarat and north Maharashtra coast, between Alibagh and Valsad, by late evening on Wednesday, warned the IMD.

Authorities have urged the residents of low-lying areas in Mumbai to vacate their houses and move to safer locations.Schools across Mumbai have been shut and students have been asked to go back home, in view of the impending cyclone. The Brihanmumbai Municipal Corporation has asked colleges to shut early. Government offices were shut at 14:00 IST. The Met office has advised fishermen not to venture out to sea in Kerala,Karnataka,Goa,Maharashtra and Gujarat.

As per reports, the government plans to introduce two key bills in parliament by December 2009. It plans to introduce bills proposing the raising of foreign stake limits in insurers to 49% from the present 26% and opening up the pension sector to private and foreign firms.

The government, last week, mandated more sales of shares by state-run firms and changed the rules on how it can use the proceeds, as it seeks to boost revenues and rein in a widening budget deficit. The government said all profitable, listed state-run firms must have at least 10% of their shares in public hands, and unlisted firms that had a positive net worth, no accumulated losses and a net profit over the past three years should list.

On the macro front, trade Secretary Rahul Khullar said on Wednesday that exports fell 11.4% to $12.5 billion in October 2009 over October 2008. Exports between April and October were at $90.4 billion, down 26.5% from the year ago period, he added.

The government today, 11 November 2009, said indirect tax receipts fell 21.6% to Rs 1,27,000 crore in April to October 2009. Excise duty receipts, levied at factory gates, were down 18.8% to Rs 52566 crore in the first seven months, while customs collection declined 31.8% to Rs 45412 crore. Service tax collection fell 5.4% to Rs 28926 crore

The government will unveil industrial production data for September 2009 on Thursday, 12 November 2009. Moderation in core sector growth in September 2009 after signs of pick-up in industrial growth in the last few months seems to have again raised some concerns. The index of core sector industries which has a weightage of 26.7% in the index ofindustrial production (IIP) clocked 4% growth in September 2009, sharply lower than the 7.8% in the month before. Industrial production jumped a robust 10.4% in August 2009.

The Reserve Bank of India may withdraw some monetary stimulus if inflation rises towards the end of 2009, C. Rangarajan, chairman of the Prime Minister's economic advisory council, said on Wednesday. The fiscal deficit needed to be reduced by 1 to 1.5 percentage points in the next fiscal year, he said.

Inflationary pressures in India were higher than those in developed countries, but tightening policy too early could weaken recovery and attract more capital inflows which would complicate policymaking further, Reserve Bank of India Deputy Governor Shyamala Gopinath said on Tuesday. She said India faces a dilemma of needing to contain rising inflation while trying to support growth and managing foreign capital inflows.

Rising capital inflows into India are not a concern now and authorities are monitoring the situation, Finance Secretary Ashok Chawla said on Wednesday. Chawla said India's economy was unlikely to reach growth rates of 8-9% until exports revived. Earlier this month, the trade minister had said exports may start growing in annual terms from the March 2010 quarter.

The government may exempt petroleum products and exportable goods from a proposed goods and services tax (GST), a draft report said on Tuesday, as it tries to speed up reforms to ease the tax burden on firms. The government had set a deadline of April 2010 for introducing GST on a wide ranging products and services, but the finance minister said recently it could be delayed by a few months.

The proposed GST, which is to replace existing central and state levies such as excise duty, service tax and value-added tax, could help lower the overall tax burden of the industry. The discussion paper said petroleum products such as crude, motor spirit and diesel, along with alcoholic beverages would be exempted from GST but would continue to attract sales tax and other duties levied at present. Exports and special economic zones would be exempted from the new tax but imports would be taxed, it said.

Both the central government and states would have two separate GST structures, and small firms with turnover of up to Rs 10 lakh would be exempted, it added.

The government will focus on driving domestic demand until key developed economies recover and will not exit fiscal stimulus measures until necessary, Finance Minister Pranab Mukherjee said on Tuesday.

Mukherjee repeated his pledge for massive investments in the agriculture sector and infrastructure, and acknowledged that it would be a challenge for India to compensate for the loss in exports through domestic demand. The finance minister said he was hopeful of economic growth of more than 7% in the fiscal year ending March, 2011.

Europe shares gained on Wednesday, with France's Credit Agricole among banks gaining after reporting results, and with sentiment lifted by upbeat Chinese macro data. The key benchmark indices in France, Germany and UK were up by between 1.13% to 1.34%.

Most Asian stocks rose after upbeat Chinese economic data. The key benchmark indices in Hong Kong, South Korea, Taiwan and Singapore rose by between 0.79% to 1.61%. But the Shanghai Composite fell 0.11%

China's industrial production surged 16.1% in October 2009 from a year earlier after record loan disbursals by banks so far this year. The industrial production growth exceeded market expectations. Retail sales climbed 16.2%.

The growth in urban fixed-asset investments in the first 10 months of this year slowed to 33.1%, easing from the 33.4% growth in the first nine months of 2009. The consumer price index fell 0.5% from a year-earlier and the producer price index shrank 5.8%, with each dropping more than economists had estimated but still showing an increase from data in the previous month.

Exports, a key engine for China's economic growth and a major source of employment for its people, dropped at a higher-than-expected 13.8%, though the contraction was an improvement over the 15.2% decline in September 2009. China's imports during the month dropped at a significantly higher pace of 6.4% from a year ago.

New loans issued by Chinese financial institutions dropped in October 2009 to their lowest monthly level this year, suggesting mainland Chinese authorities were scaling back a key source of stimulus for the economy. However, China's key broad measure of money supply, M2, rose 29.42% at the end of October 2009 from a year earlier, in line with expectations.

Japan's Nikkei stock average was flat as the yen climbed, offsetting a surprisingly large jump in domestic machinery orders for September 2009 and a forecast for a rise in the fourth quarter.

Trading in US index futures indicated Dow could gain 61 points at the opening bell on Wednesday, 11 November 2009.

After Monday's spectacular rally, the US markets ended Tuesday session flat. Trading was light and choppy. Health-care, utilities and materials were the best-performing sector. The Dow was up 20.03 points, or 0.2%, to 10,246.97, its highest close since October 3, 2008. The S&P 500 index slipped 0.07 points, or less than 0.1%, to 1,093.01. The Nasdaq Composite Index fell 2.98 points, or 0.1%, to 2,151.08.

High unemployment and reluctant consumers will likely make an incipient US economic recovery weak and erratic, top Federal Reserve officials said in a string of speeches on Tuesday. That means interest rates, currently at historic lows close to zero, should remain near that floor for the foreseeable future, the policymakers said.

World Bank President Robert Zoellick said on Wednesday he was comfortable about growth prospects for the world this year but recommended governments to not remove stimulus measures in 2010. The world needed a cooperative approach to exit from easy fiscal and monetary policies and the timing for Asian central banks would depend on markets he said.

Asia-Pacific ministers warned on Wednesday that the global economic crisis was far from over and a current upturn was a respite rather than recovery. Ministers from the Asia-Pacific Economic Cooperation forum (APEC) have gathered in Singapore for meetings that will culminate in a weekend summit that US President Barack Obama will attend.

The BSE 30-share Sensex rose 409.04 points or 2.49% to 16,849.60. At the day's high of 16887.80, the Sensex rose 447.24 points in late trade. The Sensex fell 35.17 points at the day's low of 16405.19 in early trade.

The S&P CNX Nifty rose 122.25 points or 2.5% to 5,003.95. Nifty November 2009 futures were at 5,013.95, at a premium of 10 points as compared to spot closing of 5,003.95. Turnover in NSE's futures & options (F&O) segment jumped to Rs 86,963.91 crore from Rs 81,008.35 crore on Tuesday, 10 November 2009.

The market breadth, indicating the overall health of the market was strong. On BSE, 1718 shares advanced as compared with 1002 that declined. A total of 87 shares remained unchanged.

BSE clocked a turnover of Rs 5961 crore, slightly lower than Rs 5972.60 crore on Tuesday 10 November 2009.

All the shares from the 30 share Sensex pack rose.

The Sensex is up 7,202.29 points or 74.65% in calendar year 2009, as on 11 November 2009. From a 3-year closing low of 8,160.40 on 9 March 2009, the Sensex is up 8689.20 points or 106.48%, as on 11 November 2009.

Coming back to today's trade, the BSE Mid-Cap index rose 2.01% and the BSE Small-cap index rose 1.6%. Both the indices underperformed the Sensex.

The BSE Metal index (up 4.27%), the BSE IT index (up 3.94%), the BSE Teck index (up 3.38%), outperformed the Sensex.

The BSE FMCG index (up 0.55%), the BSE Healthcare index (up 1.88%), the BSE PSU index (up 2%), the BSE Oil & Gas index (up 2.03%), the BSE Bankex (up 2.04%), the BSE Power index (up 2.04%), the BSE Auto index (up 2.07%), the BSE Realty index (up 2.34%), the BSE Capital Goods index (up 2.36%), the BSE Consumer Durables index (up 2.37%), underperformed the Sensex.

Energy major Reliance Industries (RIL) rose 2.7%. RIL on Tuesday announced its first oil discovery in its exploration block in the Cambay Basin off Gujarat. Reliance holds 100% participating interest in the block. This block was awarded to Reliance under the fifth round of the New Exploration Licensing Policy.

RIL on Tuesday said reports of a meeting between the billionaire Ambani brothers to settle a gas-pricing dispute were baseless. Reliance Industries, controlled by billionaire Mukesh Ambani, is embroiled in a high-profile legal battle over a deal to sell gas to Reliance Natural Resources, led by Ambani's estranged younger brother Anil, at below the price set by the government. RIL said in a statement the matter would be decided by the Supreme Court, which is currently hearing the case.

The RIL stock had jumped 3.46% on Monday, 9 November 2009, on reports the firm is close to announcing a major overseas acquisition. The likely target is a part of the assets owned by troubled petrochemical major LyondellBasell, which is undergoing reorganisation under the protection of a US court, reports suggest.

IT stocks rose after the president of industry body Nasscom said the sector will regain double-digit growth from April 2010. India's second largest software company by sales Infosys rose 4.08% even as its ADR fell 1.81% on Tuesday. The back-office arm of Infosys Technologies is looking at acquiring firms in Europe and in the United States of $50 million to $100 million, a top official said on 9 November 2009. Infosys BPO would also hire 1,200 people in the current financial year, the unit's chief executive, Amitabh Chaudhry, told reporters on the sidelines of the World Economic Forum.

Infosys said on 5 November 2009 its chairman's wife sold company shares worth $92 million for setting up a venture capital fund. Sudha Murthy, wife of Infosys co-founder and chief mentor N.R. Narayana Murthy, sold 20 lakh shares, or about 22% of her total holding, on the Bombay Stock Exchange on 5 November 2009, the company said in a filing. Last month, Narayana Murthy, who co-founded Infosys with six other software engineers in 1981 with $250, had sold a total of 800,000 shares worth $37 million to set up a venture capital fund which he plans to set up in India. The company said the Murthys have confirmed they did not plan to raise further capital for the fund.

India's third largest software company by sales Wipro rose 3.88% as its ADR rose 1.39% on Tuesday. Wipro, sees robust deal pipeline on the back of improving IT demand worldwide, Suresh Vaswani, joint chief executive said on Tuesday 10 November 2009. The company said on 5 November 2009 it had agreed to buy some personal care businesses of Yardley for about $45.5 million, adding to its consumer goods business. Wipro said it had signed an agreement with UK-based Lornamead group, which owns the Yardley brand, for the businesses in Asia, the Middle East, Australasia and some African markets.

India's largest software company by sales Tata Consultancy Services (TCS) rose 3.28%. The company recently secured a 150 million pounds software implementation contract for 15 years from Cardiff city council, UK.

Metal stocks rose on rally in metal futures on the London Metal Exchange and on strong domestic demand. Hindustan Zinc, Hindalco Industries and Sterlite Industries rose by between 2.97% to 6.5%.

National Aluminium Company rose 1.24%. The company recently hiked the prices of aluminium products by Rs 1000 a tonne reflecting the recent uptrend in prices on the London Metal Exchange.

Tata Steel, the world's eighth largest steelmaker by output, rose 4.28%. The company said on Friday 6 November 2009 steel sales at its Indian operations rose 38% to 462,000 tonnes in October 2009 over October 2008.

Steel Authority of India rose 1.73% despite reports the company may cut prices of flat steel products sold in the spot market by Rs 500 a tonne next month in line with international price movement.

Demand for steel remains strong from auto, rural construction and infrastructure sectors. Also demand for construction grade steel has improved post monsoon season, and has resulted into higher sales.

India's largest engineering and construction firm by sales Larsen & Toubro rose 2.65%. The company announced on Monday 9 November 2009 that it won on orders worth Rs 1635 crore.

Among other capital goods stocks, Bharat Heavy Electricals, ABB, Thermax, BEML rose by between 0.99% to 3.09%.

Auto stocks rose as low interest rates and attractive benefits offered by companies pushed up sales in October 2009.

India's largest tractor maker by sales Mahindra & Mahindra rose 2.92%. The company's overall sales climbed 32% in October this year to 18,410 units against 13,935 units in the same month last year. Mahindra and Mahindra (M&M) reportedly plans to launch a motorcycle next year. The company is also looking at acquisitions in the electronic scooter space. The auto major had entered the two-wheeler market market by acquiring the assets of Pune-based scooter manufacturer Kinetic Motor in 2008.

India's largest truck marker by sales Tata Motors rose 4.68%. Its total sales grew 18% to 20,011 units last month against 17,014 units in the same period last year.

India's largest bike marker by sales Hero Honda Motors rose 0.94%. The company reported a marginal increase in October sales at 354,156 units as against 352,449 units in the same month last year

India's second largest bike marker by sales Bajaj Auto rose 1.17%. Carlos Ghosn, chief executive of French car maker Renault and Japan's Nissan Motor Co, said on Tuesday an agreement had been signed with Bajaj Auto for a low-cost car which would come to India in 2012.

India's largest small car marker by sales Maruti Suzuki India rose 0.49%. The company's total sales grew 32.4% to 85415 units in October 2009, compared with 64490 units posted in the same month a year ago.

Car sales in India rose an annual 34% to 132,615 units in October 2009, boosted by festival demand and easier availability of loans, an industry body said on Wednesday. Sales of trucks and buses, a gauge of economic activity, rose 52% to 42,562 units in October 2009, the data showed.

Rate sensitive realty shares reversed early losses on bargain hunting. Indiabulls Real Estate, Omaxe, Unitech, DLF rose by between 0.69% to 3.07%.

The RBI, last week, raised the provisioning requirements for loans to commercial real estate from 0.4% to 1% in its monetary policy review meet on 27 October 2009. The latest RBI move will result in increase in borrowing costs for realty firms which depend heavily on borrowing. In view of large increase in credit to the commercial real estate sector over the last one year and the extent of restructured advances in this sector, it would be prudent to build cushion against likely non-performing assets (NPAs), the central bank said in its quarterly policy review.

Banking shares rose on hopes of financial sector reforms. India's largest private sector bank by net profit ICICI Bank rose 3.35% even as its ADR fell 1.84% on Tuesday. The bank's net profit rose 2.6% to Rs 1040.13 crore on a 12.7% decline in total income to Rs 8480.73 crore in Q2 September 2009 over Q2 September 2008. The result was announced during trading hours on 30 October 2009.

India's second largest private sector bank by net profit HDFC Bank rose 1.92% even as its ADR fell 0.5% on Tuesday.

India's largest bank by net profit State Bank of India (SBI) rose 0.48%. State Bank of India said on 9 November 2009 said it had entered into an agreement with T. Rowe Price to sell a 6.5% holding each in UTI Asset Management Company and UTI Trustee Company. State Bank currently holds 25% in each of the companies and after the sale its holding would be reduced to 18.5%, it said in a statement.

SBI announced after market hours on Friday 6 November 2009 it has revised downwards interest rates on deposits by 25-50 basis points for a few maturities effective from 9 November 2009. The bank's consolidated net profit rose 28.29% to Rs 3,133.16 crore on 22% rise in consolidated income to Rs 33,101.65 crore in Q2 September 2009 over Q2 September 2008. The results were announced on 31 October 2009.

The RBI did not relax mark-to-market rules for bank's debt holdings at a quarterly policy review on 27 October 2009. The market was been agog with talks of the central bank hiking the ceiling on the portion of government securities that banks can park in held-to-maturity (HTM).

The central bank also decided to streamline provisioning requirement on non-performing assets. The RBI, asked banks to ensure by September 2010 that the total provisioning coverage against non-performing or bad loans aren't less than 70% of the outstanding amount.

India's largest thermal power generator by sales NTPC rose 1.53%. The company said on Tuesday it has entered into an agreement with the Madhya Pradesh state government and MP Power Trading Company for setting up a 2,640 megawatts (MW) thermal power plant in the Narsinghpur district of the state. This project would have four units of 660 MW each with supercritical technology. NTPC has total installed capacity of 30,644 MW through 26 power plants. The company has a capacity addition target of becoming 75 GW by 2017 and currently has 17,930 MW under construction.

Among other power stocks, Reliance Infrastructure, Torrent Power, Reliance Power rose by between 0.05% to 5.31%.

Some PSU stocks rose after Prime Minister Manmohan Singh on 5 November 2009, approved divestment in public sector companies to raise funds for social welfare. Hindustan Copper, State Trading Corporation, MMTC,MTNL, NMDC, Hindustan Copper, Power Finance Corporation rose by between 1% to 14.17%.

Construction shares rose on government's thrust on infrastructure. 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, Nagarjuna Construction Company and Jaiprakash Associates, Gayatri Projects rose by between 2.29% to 6.27%.

FMCG stocks rose on bargain hunting after recent fall. Marico, ITC, Hindustan Unilever, United Spirits, REI Agro rose by between 0.06% to 8.06%.

Shipping firms rose after the Baltic Dry Index, which tracks rates to ship dry commodities, breached the 3,500 level on Tuesday. Shipping Corporation of India, Mercator Lines, Great Eastern Shipping Company rose by between 5.61% to 13.59%.

Cals Refineries clocked highest volume of 2.96 crore shares on BSE. Suzlon Energy (1.59 crore shares), Mahindra Satyam (1.21 crore shares), GVK Power & Infrastructure (1.12 crore shares) and Unitech (0.94 crore shares) were the other volume toppers in that order.

Educomp Solutions hit highest turnover of Rs 272.56 crore on BSE. Reliance Industries (Rs 177.92 crore), State Bank of India (Rs 144.08 crore), Mahindra Satyam (Rs 143.55 crore) and Sesa Goa (Rs 40.72 crore) were the other turnover toppers in that order.