A broad-based rally

Key benchmark indices surged for the second running day as markets across Europe and Asia rallied after worries about Dubai's finance woes receded. The BSE 30-share Sensex jumped 272.05 points or 1.61%, up 250.81 points from the day's low and off 20.19 points from the day's high. Robust November 2009 auto sales numbers added to the positive sentiment triggered by better-than-expected GDP data, helping the barometer index BSE Sensex regain the psychological 17,000 mark

The market cut gains after an initial surge triggered by higher Asian stocks. It cut gains later before bouncing back. The Sensex struck a fresh intraday high in mid-morning trade. The market came off the higher level later. The market hit a fresh intraday high in afternoon trade led by rally in index heavyweight Reliance Industries. The market extended gains to hit fresh intraday high in mid-afternoon trade as European markets rose. Intense buying frenzy in late trade propelled the market to the day's high in late trade

Exports fell 6.6% to $13.19 billion in October 2009 over October 2008, their 13th straight monthly fall, the government said on Tuesday. Imports dropped 15% from a year earlier to $22 billion. The trade deficit shrunk to $8.8 billion in October 2009 from $11.74 billion a year earlier.

Exports for April-October, the first seven months of the 2009-10 fiscal year, were down 26% at $91.05 billion from the same period in the previous year.

C. Rangarajan, chairman of the prime minister's Economic Advisory Council today said the robust growth of the economy in July-September indicated it could expand at around 7% in 2009-10. The latest numbers do indicate that industry and services are growing very strongly, Rangarajan said adding that this could help offset to a very large extent the impact of the decline in agricultural production.

Finance Minister Pranab Mukherjee told parliament today that the current trend in inflation in India is a result of a shortage of food items and not due to a demand-push factor. The food articles index rose an annual 15.6% as at 14 November 2009, up from the previous week's 14.6% rise. Weak monsoon and floods in parts of the country have hurt farm output and pushed up food prices. The government is keeping a close watch on futures trading in commodities, Mukherjee said

The finance minister said buoyancy in government's revenue seen earlier may not be there till 2011/12. He said the government will time stake sale in state-run firms so as to get maximum value. He added that there is no plan for a strategic stake sale in state-run firms. The government, last month, decided to cap its holdings in state-run firms at 90% and said it would sell off shares in the firms where this limit was exceeded.

India's manufacturing activity expanded for the eighth straight month in November 2009 but at its weakest pace since March 2009 due to a slowdown in growth of output, new business and employment, a survey showed. The HSBC Markit Purchasing Managers' Index (PMI), based on a survey of 500 companies, fell to 53 in November 2009 from 54.5 in October 2009. A reading above 50 means activity expanded during the month.

The market breadth was strong with small and mid-cap shares also participating in today's rally. Among the 30-member Sensex pack, 27 advanced while only 3 of them declined. Index heavyweight Reliance Industries surged nearly 3.5%. Metal shares rose on rally in metal prices on the London Metal Exchange on Monday.

Auto shares were also upbeat after auto major Maruti Suzuki India and Mahindra & Mahindra reported robust monthly sales figures for November 2009. Tata Motors struck a 52-week high of Rs 708 in intra-day trade today. FMCG shares underperformed the Sensex as investors shifted to high growth stocks from defensive stocks. IT pivotals, too, underperformed the Sensex on a firm rupee.

European shares rose on the first day of December, as worries about the potential fallout to the global economy from Dubai's debt woes abated and deal speculation also lent a hand. Key benchmark indices in UK, Germany and France were up by between 1.56% to 1.87%

Eurozone annual inflation turned positive for the first time in seven months but is still undershooting the European Central Bank's goal by a wide margin. Annual inflation in the 16-country region was 0.6% in November, according to a preliminary estimate by Eurostat, the European Union's statistical office, released on Monday. That was the first positive reading since April, when the annual inflation rate was also 0.6%. Eurozone inflation fell sharply from the second half of 2008 as energy prices tumbled but also as a result of the collapse in economic activity.

Japanese stocks led rally in Asian stocks today, 1 December 2009 as fears about the ripple effects of Dubai's debt woes eased. Key benchmark indices in Hong Kong, Singapore, South Korea and Taiwan were up by between 0.88% to 1.42%.

China's Shanghai Composite index rose 1.25%. China's manufacturing grew last month at the fastest pace since April 2004, a survey showed, helping Asia to lead the recovery from the global economic slump. The purchasing managers' index released today by HSBC Holdings Plc rose to a seasonally adjusted 55.7 in November 2009 from 55.4 in October 2009. The government's PMI, also released today, held at an 18-month high. The government's Purchasing Managers' Index was unchanged at a seasonally adjusted 55.2, the Federation of Logistics and Purchasing said in a statement. A reading over 50 indicates an expansion of activity in the manufacturing sector, while one below 50 suggests contraction.

Japan's Nikkei 225 index gained 2.43%. The Bank of Japan decided to take additional easing steps at a special policy meeting called Tuesday, in order to keep the country's fragile economic recovery in light of deflationary pressures and a soaring currency.

The Japanese central bank unanimously voted to keep its overnight call rate target unchanged at 0.1%, but also set up a new 10 trillion yen ($120 billion) lending facility, which will accept as collateral Japanese government bonds, coprorate bonds commercial paper, and deeds on loans. The bank pledged to cooperate with the government to do all it can to pull Japan out of deflation, which the bank has said it expects to last for three fiscal years.

Bank of Japan (BoJ) Governor Masaaki Shirakawa said that the BoJ's decision to pump more liquidity into the financial system to stave off deflation and recession was in part a response to the yen's recent strength, which culminated in a 14-year high against the dollar. He also said the commitment to keeping interest rates low will have an effect on the currency market in the longer run

Meanwhile, the Reserve Bank of Australia today raised its cash rate target by one quarter of a percentage point to 3.75%, further unwinding emergency policy settings no longer appropriate for the country's recovering economy.

Trading in US index futures showed the Dow could rise 66 points at the opening bell on Tuesday, 1 December 2009

US markets pulled off a modest gain in late trade on Monday, 30 November 2009, led by banks as investors took the view that Dubai debt woes will likely be contained. The Dow Jones industrial average gained 34.92 points, or 0.3%, to 10,344.84. The S&P 500 index rose 4.14 points, or 0.4%, to 1,095.63, and the Nasdaq Composite Index rose 6.16 points, or 0.3%, to 2,144.60.

In economic data, the institute for supply management-Chicago reported its gauge of regional business activity rose to 56.1 in November from 54.2 in October. This was the strongest reading since August.

Meanwhile, Dubai World, the holding company at the heart of the Dubai crisis, on Monday announced a restructuring plan involving $26 billion in debt. However, the Dubai government said it was not responsible for Dubai World's debts, dealing a blow to creditors' assumptions that the Arab emirate would guarantee the government-controlled conglomerate's liabilities.

Dubai World, one of the emirate's main state holding companies, last week, asked for a delay on maturities until at least 30 May 2010. The company has total debts of $59 billion, including $3.52 billion of Islamic bonds due 14 December 2009 from its property unit Nakheel.

Close home, data released on Monday showed the gross domestic product (GDP) grew by 7.9% in Q2 September 2009, from 7.1% in the previous year, shattering forecasts as stimulus measures boosted demand and manufacturing activity surged. The economy had registered a 6.1% growth in the first quarter.

The bulk of the recovery was led by a 9.2% growth in manufacturing, while mining and construction activities also expanded by 9.5% and 6.5%, respectively. But agriculture continued to me a major drag with a mere 0.9% growth.

Reacting to the GDP figures Montek Singh Ahluwalia, Deputy Chairman, Planning Commission said economic growth forecast for the year to March 2010 may have to be revised upwards as data released on Monday showed a faster expansion in September quarter. He added that there was no serious concern on inflation as of now and conventional monetary policy was unlikely to be effective in curbing food price rise.

Finance minister Pranab Mukherjee on Monday said he expects the economy to grow around 7% in the fiscal year ending March 2010. During the weekend, the finance minister said that Dubai's debt crisis would not affect India much, but the government is keeping a close watch and will act to prevent any fallout.

India's fiscal deficit during the April to October 2009 period was Rs 2.45 lakh crore ($52.7 billion), or 61% of the full-year target, the government said in a statement on Monday. Tax receipts were Rs 2.14 lakh crore and total expenditure was Rs 5.37 lakh crore for the first seven months of 2009/10 fiscal year

There are concerns that a glut in share sales may suck liquidity from the secondary market. A foreign brokerage firm expects Indian firms to raise roughly $70 billion through share sales over the next three years. The brokerage expects stake sales in state-run firms will account for $10-$15 billion of the total funds to be raised. The upcoming auction of third-generation mobile spectrum will also spur potentially billions of dollars in equity raising, although not necessarily from the public markets.

Indian companies have raised about $18 billion in equity thus far this year to repay high cost debt or to fund expansion plans. Last year, Indian firms raised $7.2 billion in equity.

The BSE 30-share Sensex was up 272.05 points or 1.61% to 17,198.27, the highest level since 25 November 2009. The Sensex opened 21.24 points higher at 16,947.46, also its day's low. It gained 292.24 points at the day's high of 17,218.46 in late trade.

The S&P CNX Nifty was up 89.30 points or 1.77% to 5122, its highest level since 17 October 2009. Nifty December 2009 futures were at 5,130.80, at a premium of 8.80 points as compared to the spot closing.

A deluge of global liquidity has boosted stocks across the globe this year. Governments and central banks around the world have injected trillions of dollars in the past one year to pull the world out of a most severe recession since the 1930s Great Depression. The Sensex is up 7550.96 points or 78.27% in calendar year 2009, as on 1 December 2009. From a 3-year closing low of 8,160.40 on 9 March 2009, the Sensex is up 9037.87 points or 110.75% as on 1 December 2009.

Coming back to today's trade, the BSE Mid-Cap index rose 1.77% and the BSE Small-cap index gained 2.15%. Both these indices outperformed the Sensex.

All sectoral indices on BSE ended higher. The BSE Metal index (up 2.09%), the BSE Healthcare index (up 2.55%), the BSE Auto index (up 2.90%), the BSE Oil & Gas index (up 2.31%), the BSE Bankex (up 2.30%), the BSE Realty index (up 6.17%), outperformed the Sensex.

The BSE FMCG index (up 0.01%), the BSE Power index (up 1.01%), the BSE PSU index (up 1.16%), the BSE Capital Goods index (up 0.89%), the BSE Consumer Durables index (up 0.54%), the BSE Teck index (up 0.96%), the BSE IT index (up 0.53%), underperformed the Sensex.

The market breadth, indicating the overall health of the market was strong. On BSE, 2091 shares advanced as compared with 746 that declined. A total of 82 shares remained unchanged.

The total turnover on BSE amounted to Rs 5026 crore as compared with Rs 4328 crore on Monday, 30 November 2009. Turnover in NSE's futures & options (F&O) was Rs 60,656.98 crore, lower than Rs 67,547.79 crore on Monday, 30 November 2009.

Among the 30-member Sensex pack, 27 advanced while only 3 of them declined.

Auto stocks rallied following robust monthly sales in November 2009. India's top truck maker by sales Tata Motors rose 7.11% to Rs 707.90 and was the top gainer from the Sensex pack. The stock struck a 52-week high of Rs 708 in intra-day trade today. The company is reportedly planning to produce hybrid versions of its low cost car Nano to join in the environment-friendly trend.

On consolidated basis, Tata Motors reported a net profit of Rs 21.78 crore in Q2 September 2009, compared to a loss of Rs 941.8 crore a year earlier. Consolidated total income declined 8.20% to Rs 21506.94 crore in Q2 September 2009 over Q2 September 2008. The results were announced at the fag end of the trading session on Friday, 27 November 2009.

India's largest small car maker by sales Maruti Suzuki India rose 1.49% after total vehicle sales spurted 66.60% to 87,807 units in November 2009 over November 2008. The announcement was made during trading hours today, 1 December 2009. Domestic sales spurted 60.10% to 76,359 units, while exports surged 128.60% to 11,448 untis in November 2009 over November 2008.

India's top tractor marker by sales Mahindra & Mahindra (M&M) gained 4.69% after its domestic auto sales soared 105.1% to 21,387 units in November 2009 over November 2008. M&M sold a total of 22,587 vehicles (domestic plus exports) in November 2009 as against 11,515 vehicles sold in November 2008.

The company signed an agreement with BAE Systems, the global defence systems manufacturer, to create a land systems focused joint venture defence company that will be based in India. The announcement was made at fag end of day's trading session on Monday.

M&M will hold 74% in the venture and BAE Systems will hold the remaining 26%, the maximum foreign direct investment allowed under the existing defence sector norms. The two companies will invest a total of $21.25 million over a three-year period.

India's largest bike maker by sales Hero Honda Motors rose 1.17% after total vehicle sales jumped 32% to 3.81 lakh units in November 2009 over November 2008. The announcement was made during trading hours today, 1 December 2009. India's second largest bike maker by sales Bajaj Auto shot up 4.05%.

India's largest private sector firm by market capitialisation Reliance Industries (RIL) advanced 3.47% to Rs 1099.70. RIL has reportedly become the largest natural gas producer in the country with its over 50 million standard cubic meter per day (mmscmd) output surpassing state-run Oil and Natural Gas Corporation's (ONGC) output.

RIL's gas production from its D6 fields in the Krishna Godavari basin yesterday touched 50.15 mmscmd, according to the regular output report RIL sent to the oil ministry. This for the first time surpasses ONGC's 49.6 mmscmd output.

Shares of oil exploration firms rose after crude oil prices gained on the New York Mercantile Exchange on Monday, 30 November 2009. Cairn India gained 3.84% and Oil India rose 3.86%.

However India's largest oil exploration firm by sales Oil & Natural Gas Corporation (ONGC) fell 0.66% on profit booking. The stock jumped 2.97% on Monday on reports it has found traces of a new oil reserve in Gujarat in western India that could raise its onshore oil production by 20%. The new hydrocarbon structure is likely to produce at least 1 million tonnes per annum (mmtpa) of oil. This could be the largest onshore oil find for ONGC in the last one decade.

Rise in crude oil prices would result in higher realizations from crude sales for oil exploration firms. Light, sweet crude rose $1.23 or 1.62% to $77.28 a barrel on the New York Mercantile Exchange on Monday, 30 November 2009 after the Institute for Supply Management-Chicago Inc. said its business barometer climbed to 56.1, the highest level since August 2008.

Aban Offshore rose 5.51% on reports the company is planning to list its Singapore subsidiary Aban Singapore on the Singapore Exchange, or SGX, sometime early next year.

India's largest pharma firm by market capitaliasation Sun Pharmaceuticals jumped 5.36%. On 26 November 2009, the company received tentative United States Food and Drug Administration's approval for its generic Strattera capsules, which is used for treatment of attention deficit hyperactivity disorder. The drug is a therapeutic equivalent of Strattera capsules from Eli Lily.

Cipla jumped 2.76% on reports the firm is in talks with a host of global drug makers, including Pfizer Inc, to supply generic products.

Other pharma shares also joined the rally on fresh buying. Ranbaxy Laboratories (up 3.41%), Cipla (up 2.76%), Orchid Chemicals (up 4.57%), Torrent Pharma (up 3.57%), Glenmark Pharmaceuticals (up 4.19%), and Cadila Healthcare (up 4.20%), surged.

Jubilant Organosys rose 3.14% after the company extended its 4-year-old drug discovery collaboration with Eli Lilly and Co by five years.

Metal stocks extended Monday's gains on fresh buying. India largest non ferrous metal producer Sterlite Industries jumped 2.96% tracking a 2% gain in its American depository receipt (ADR) on Monday.

India's largest private sector aluminium maker by sales Hindalco Industries surged 2.86%. On Friday, the Reserve Bank of India allowed the company to enhance foreign institutional investors (FII) limit to 40%.

Tata Steel (up 1.10%), Steel Authority of India (up 3.73%), Sesa Goa (up 0.44%), JSW Steel (up 2.67%), National Aluminium Company (up 2.22%), advanced

A gauge of six metals traded on the London Metal Exchange, rose 1.71% on Monday, 30 November 2009.

India's largest bank by net profit and branch network State Bank of India gained 2.41% on reports the bank has invited bids for sale of 1% stake in National Stock Exchange of India (NSE) as well as 5.91% stake in Multi Commodity Exchange (MCX).

Private sector banking pivotals gained tracking firm ADRs. India's largest private sector bank by net profit ICICI Bank gained 2.61% following a 2.17% rise in its ADR on Monday. India's second largest private sector bank by net profit HDFC Bank rose 0.92% echoing a 0.29% rise in its ADR on Monday.

Realty stocks saw an across the board rally as Dubai's debt worries eased. Housing Development & Infrastructure (up 4.48%), DLF (up 5.67%), Unitech (up 12.47%), Indiabulls Real Estate (up 3.74%), Orbit Corporation (up 2.94%), Parsvnath Developers (up 2.69%), Omaxe (up 3.17%), and Anant Raj Industries (up 1.65%), gained

Peninsula Land advanced 4.31% after the company received a sum of Rs 160 crore from Alok Realtors from the sale of 6.41 lakh square feet at Peninsula Business Park in Mumbai. The company made this announcement during trading hours today, 1 December 2009.

Consolidated Construction Consortium gained 1.82% after the company bagged orders aggregating Rs 405 crore. The company announced the fresh orders after market hours on Monday, 30 November 2009.

IRB Infrastructure Developers advanced 4.43% after a promoter of the company hiked his stake in the firm. The company made this announcement after market hours on Monday, 30 November 2009.

India's largest engineering & construction firm by sales Larsen & Toubro (L&T) gained 0.80%. L&T during market hours on Monday announced the formation of a joint venture with the state-run Nuclear Power Corporation of India (NPCIL) for making nuke forgings, a crucial component in the construction of nuclear reactors. NPCIL would hold 26% in the venture and L&T the remainder.

Areva T&D India rose 2.26% after parent Areva SA of France said it will hold exclusive talks to sell its transmission and distribution unit to a French consortium.

Aksh Optifibre surged 5% after the company's board approved raising up to $8 million. The company made this announcement after market hours on Monday, 30 November 2009.

Sterlite Technologies jumped 5.60% after the company secured new contracts worth over Rs 600 crore in the month just gone by. The company made this announcement during trading hours today, 1 December 2009.

India's largest power generation firm by capacity NTPC rose 0.41% on reports the company plans to acquire two coal mines in Indonesia to secure fuel supplies for its plants.

IT stocks rose following reports of TCS, Wipro and Infosys are in the fray for Goldman Sachs' $700 million IT outsourcing deal. However they underperformed the Sensex on profit booking and firm rupee.

India's largest software services exporter Tata Consultancy Services (TCS) rose 0.35%. India's second largest software services exporter Infosys Technologies rose 0.50%. India's third largest software services exporter Wipro rose 1.29%. The partially convertible rupee was trading at 46.26/27 per dollar, higher than 46.50/52 on Monday. A firm rupee negatively impacts operating profit margin of IT firms as the sector derives a lion's share of revenue from exports.

As per reports, the contract, to create research & development functions and software database, will span across 5-6 years. HCL Technologies, Cognizant, and IBM are the others bidders reported to be in the fray for the IT contract of Goldman Sachs. Bids are expected to begin by April 2010.

FMCG shares underperformed the Sensex as investors shifted from the so-called defensive sector to high growth sectors. India's largest FMCG company by sales Hindustan Unilever lost 2.09% to Rs 279.30 and was the top loser from the Sensex pack.

ITC (up 0.25%), United Spirits (up 0.32%), Colgate Palmolive India (up 0.15%), though up underperformed the Sensex. Godrej Consumer Products (down 0.05%), Marico (down 1.11%), also slipped

Tea stocks saw an across the board rally for the second day after Tea Board of India chairman Basudeb Banerjee was quoted as saying that tea production in India will be marginally lower this year than in the year before due to erratic weather.

Harrisons Malayalam (up 2.84%), Goodricke Group (up 7.68%), Warren Tea (up 2.79%), McLeod Russel (up 1.53%), Assam Company (up 2.85%), Tata Tea (up 0.08%), surged.

Jet Airways (India) spurted 9.28% after the state-run oil marketing firms on Monday, 30 November 2009, cut jet fuel by 1.10% in step with marginal easing of crude rates. Following this, aviation turbine fuel (ATF) prices in Delhi have come down by Rs 455 to Rs 39,968 per kilolitre (KL). In Mumbai it is down by Rs 474 to Rs 41,237/KL. Jet fuel is the largest component of costs for air carriers.

Other shares from the aviation sector also logged gains. Kingfisher Airlines (up 7.34%), and SpiceJet (up 6.62%), jumped.

Mercator Lines rose 3.62% after the company took delivery of a 1993 built M R Tanker of 42,235 dead weight tonnage. The company announced the acquisition of vessel during trading hours today, 1 December 2009.

Unitech was the top traded counter on BSE with turnover of Rs 282.44 crore followed by Tata Steel (Rs 153.94 crore), Suzlon Energy (Rs 150.83 crore), DLF (Rs 126.24 crore), and HDIL (Rs 125.54 crore).

Unitech was the volume topper on BSE with volume of 3.30 crore shares followed by Cals Refineries (3.20 crore shares), Suzlon Energy (1.89 crore shares), Jindal Cotex (77.37 lakh shares), and Mahindra Satyam (59.57 lakh shares).

Zydus Wellness (up 20%), Kiri Dyes (up 20%), Ocl Iron & Steel (up 19.81%), KPR Mills (up 15.55%), and Manali Petrochem (up 19.98%), surged.

Logix Microsystems (down 7.06%), Arvind Chemicals (down 6.98%), and Anil Product (down 6.23%), declined.