Saturday, February 06, 2010
US President Barack Obama projected that the budget deficit of the world's largest economy would peak at a new record this year before easing, as he pushed for fiscal responsibility while fighting double-digit unemployment. "In the long term, we cannot have sustainable and durable economic growth without getting our fiscal house in order," Obama said in a statement with the budget’s formal release. His budget for the fiscal year to September 30 next year, a blueprint subject to change by Congress, forecast a deficit of US$1.56 trillion this year, equal to 10.6% of gross domestic product (GDP). The rise was partly due to spending associated with a package of emergency stimulus measures Obama signed last year as the US grappled with recession. While maintaining policies this year aimed at protecting a still fragile economic recovery, with US$100bn earmarked for measures to create jobs, Obama plans to save money from next year by curbing 120 projects, including a symbolic space mission to return to the moon, but will invest more in education and research. The increase in the 2010 deficit compared with a US$1.41 trillion shortfall in 2009 that amounted to 9.9% of GDP. But this funding gap was forecast to dip to US$1.27 trillion next year - 8.3% of GDP and a third of total government spending forecast at US$3.8 trillion
Ram Chandra Agarwal, founder and managing director of Vishal Retail Ltd., said that he is prepared to step down as the head of the company if that helps the beleaguered retailer. "I am agreeing to anything that is in the benefit of the company, including stepping down," he said. Vishal Retail has been posting losses over the last three quarters amid an economic slowdown that has hit retailers hard. Agarwal also said that he was also prepared to dilute an unspecified stake from his share of 63% in Vishal Retail to pave the way for any investor. Reports said that private equity firm TPG has evinced interest in acquiring a majority stake in Vishal Retail, which has gone in for corporate debt restructuring (CDR). Investment banking sources said TPG has made a Rs2.5bn offer for the stake held by Vishal Promoter and Chairman Ram Chandra Agarwal before the CDR cell. Agarwal and other promoters hold 60.23% stake in the company. The TPG proposal values the beleaguered apparel retailer at Rs4.17bn. The Mumbai-based CDR cell is holding talks with lenders as part of Vishal Retail’s debt recast. After the joint lender meeting (JLM) remained inconclusive on January 30, the next JLM is scheduled next week. According to reports, Mumbai-based Wadhawan Group may also join the race to acquire a controlling stake in Vishal Retail, though it has not submitted any proposal as of now.
Inox Leisure approved the purchase of 43.28% in Shroff family promoted, Fame India for an all-cash deal of Rs664.8mn. Inox bought up to 1,50,57,760 shares of Rs 10 each of Fame India, by way of a series of block trades. Inox Leisure bought an additional 7.21% stake in Fame India, taking its total shareholding in the later to 50.48%. The transaction through a block deal in the Bombay Stock Exchange (BSE) represents 2.5 million shares in Fame for a consideration of Rs50.75 a share, totaling Rs127.7mn, Inox said in a statement. The deal takes Inox's total investment at Fame to Rs792.5mn, it said. The acquisition would be funded through a loan from Inox's founders, Gujarat Fluorochemicals Ltd. This acquisition will be followed by an open offer to buy another 20% in Fame. This acquisition will create the largest multiplex networks with a total of 55 multiplexes, 204 screens and 57,891 seats. Enam Securities was the investment banker and Khaitan & Co. was the legal advisor to Inox. Yes Bank was the investment banker for Fame India and Naik & Co. was the legal advisor.
Maruti Suzuki India Ltd. sold a total of 95,649 vehicles in January 2010. This included 14,562 units of exports. This was the highest ever domestic as well as total sales for the company. Maruti had sold 67,005 vehicles in the domestic market in January 2009. For April-January 2009-10, sales grew 31.8% to 826,592 units over the like period in last fiscal. Maruti's sales in the compact car (A2) segment rose 24.8% at 58,540 units over January 2009. Sale of models in its mid-sized (A3) segment grew by 36.5% to 8,995 cars in January this year.
Health of India's manufacturing sector got better in January, with a private barometer growing at its fastest pace in nearly one and a half years, as recovery takes a firmer hold in one of Asia's leading economy. A measure of India’s manufacturing output rose to 57.6 in January, the highest since August 2008, according to the Purchasing Managers’ Index (PMI) compiled by HSBC Holdings Plc and Markit Economics. The index was at 55.6 in December. A reading over 50 indicates expansion and a fall below 50 means contraction. The big jump in the PMI was boosted by a sharp rise in new export orders that underpin a recovery in the industrial sector, the HSBC-Markit survey showed. "Any lingering concern that India's manufacturing recovery was tailing off should be well and truly put to rest by this strong release," said Robert Prior-Wandesforde, senior Asian economist at HSBC. "A second consecutive rise in the PMI has taken the series to a new cycle high, consistent with ongoing double-digit rises in industrial production."
Separately, a key business index showed that India's service sector output expanded at its fastest rate in 16 months in January as the country shook off the impact of the global slowdown. The strong performance of the sector was attributed to a sharp rise in new orders. The HSBC India Services Purchasing Managers' Index (PMI) posted a reading of 59.0 last month - its highest since September 2008, just before the global slump hit Asia's third-largest economy.
Food inflation, based on the annual wholesale price index (WPI), climbed further to 17.56% during the week ended January 23, higher than the previous week's annual rise of 17.40%. Food inflation gained for the second week in a row after easing for three successive weeks. Food inflation, which had begun easing after touching its highest levels in nearly a decade at around 20% in December, rose mainly because potatoes were up 44.91% and pulses 44.43% year-on-year in the latest week. In the Primary Articles group, annual rate of inflation, stood at 14.56% compared to 14.66% the previous week and 8.89% in the corresponding week of the previous year. Inflation in the Fuel group stood at 5.88% for the latest week as compared to 5.70% for the previous week. The annual WPI-based inflation had surged to 7.31% in December 2009, compared with 4.78% in November. In its January monetary policy review, the RBI recently raised its projection for inflation to 8.5% from earlier 6.5% by this fiscal-end. But, the RBI expects inflation to moderate starting in July, assuming a normal monsoon and global oil prices holding at current levels.
The Kirit Parikh panel submitted its much-awaited report on fuel pricing to the Petroleum Ministry. The experts group, headed by the former Planning Commission member Kirit Parikh, recommended freeing of petrol and diesel prices, while raising kerosene and domestic LPG rates by Rs. 6 per litre and Rs. 100 per cylinder respectively. The committee recommended that prices of kerosene and domestic LPG should be raised in line with the per capita income. At current levels of global prices, the proposal if implemented would result in hike of the petrol and diesel prices by around Rs3.9/litre and Rs3.2/litre, respectively. The move will lead to nil under-recoveries on auto fuels as the entire burden would shift to the consumers. However, chances of deregulation of diesel prices are fairly slim on account of its impact on inflation. Currently, under-recoveries on these products are Rs287/cylinder and Rs16.5/litre. The recommendation, if implemented, would result in reduction in the subsidy burden by around Rs70.2bn on kerosene and Rs78.8bn on the domestic LPG, resulting in reduction in under-recoveries by around Rs149bn. Petroleum Ministry has given an assurance that the matter will be processed in a week's time. The Cabinet will then take up the report. It will be put up before the Cabinet in a week's time and it will be considered by the Government at the highest level in about 15 days.
Fitch views the credit outlook for incumbents with stronger balance sheets and comfortable liquidity profiles as stable, while its outlook for new entrants and public sector telecoms operators is negative.
The revision in the Stable Outlook from 2009 is primarily due to stiff competition and a faster-than-expected decline in tariffs, which has had an impact on revenue and profitability.
Fitch notes that the credit profiles of all operators are subject to the event risk of 3G and broadband wireless access (BWA) auctions.
Wireless services are likely to remain the principle driver of industry growth, with penetration still moderate at 43.2% at end-November 2009.
Fitch expects this strong subscriber growth to be sustained at a compound annual growth rate (CAGR) of about 25%-30% over the next three years to CYE12, due to network roll-out by new operators and expansion by regional operators across different Indian circles.
However the agency notes that wireless pricing turned aggressive from September 2009, with the major operators reducing tariffs and/or switching to per second billing (from the previous per minute format).
Competitive pressures are expected to continue in 2010; consequently, Fitch expects revenue growth to decelerate in CY2010, which in turn will put pressure on EBITDA margins. However, average revenue per minute will decline at a lower rate in 2010, after declining at a faster than expected rate in 2009.
The Government's big bang disinvestment plans to curb spiraling fiscal deficit kicked off on a sour note with the NTPC follow-on-offering (FPO) failing to generate enough interest amid a carnage in global stocks. Several reasons were being speculated for the dismal performance of the NTPC issue, including low fees paid to the merchant bankers by the Government. But, chief among those reasons was said to be the high bid placed by state-run institutions - LIC and SBI. According to reports, the high bids quoted by LIC and SBI in the first ever French auction for a public issue in India managed to drive away potential investors of all categories.
The Rs83bn NTPC FPO managed to scrape through and was fully subscribed primarily due to the support from public sector banks and insurance monolith LIC. The issue was subscribed only 1.2 times. It received a little over 100,000 applications from the retail investors. It received bids for 49.36 crore shares against the 41.2 crore shares on offer. NTPC owns the country’s 20% power generation capacity.
While the QIB portion was fully subscribed the response from the Retail investors and HNIs was highly disappointing. Retail investors did not see much opportunity in the NTPC issue as the floor price of Rs 201 was not much higher than the current market price. The duration of the issue saw the scrip run up from Rs 205 to a high of Rs 211.65 and fall 3.4% since then.
The big worry is that the forthcoming public issues of Rural Electrification Corporation (REC) and NMDC could also suffer the similar fate, especially if the market sentiment doesn't improve materially. REC is set to open on February 19 while NMDC issue will open on March 10. What's worse, both these issues are also going to be done under the French auction route. These two issues are expected to raise a combined Rs185bn. Meanwhile, in another setback to the Government's efforts in curtailing the fiscal deficit, the Power Ministry has decided to postpone the IPO of Satluj Jal Vidyut Nigam Ltd. The issue is unlikely to hit the markets in the current fiscal years, according to reports.
Meanwhile, several smaller IPOs that preceded the NTPC FPO also saw lukewarm retail participation. In some of these, the institutional investor portion was also low. Non-institutional investors helped these issues to sail through. Of the six IPOs in the last one week, only DB Realty (issue size: Rs12.88bn) did well. The others just about managed to get fully subscribed.
Stocks across the world sank amid growing concerns of a potential sovereign debt default in Europe, even as global markets were recovering from the recent turbulence owing to concerns on China and new bank regulations in the US. Portuguese bonds come under renewed pressure as fears of Greece’s debt problems spreading in the other parts of the eurozone persisted. Banking stocks from Portugal, Spain, Greece and Ireland slid further as worries about sovereign debt and its potential impact on the eurozone continued to spread. European Central Bank (ECB) President Jean-Claude Trichet said that the eurozone still faces major challenges but is heading in the right direction. He was speaking shortly after the ECB kept interest rates steady. Eurozone governments have borrowed a record €110bn from the markets so far this year, forcing up borrowing costs for those countries with the weakest public finances as they pay a heavy price for their ballooning debt levels.
Meanwhile, China’s government, seeking to stem property speculation, told banks to raise interest rates on third mortgages and demand bigger down payments for such loans. In addition, a senior policy adviser to China's central bank said that asset bubbles were a concern for the nations' policy makers, reflecting official unease about the rapid gains in real estate prices. Overseer of US$700bn government bank bailout program said that Fed policies could be creating US housing bubble similar to one that triggered the 2008 global financial crisis.
Risk premium escalated further amid mounting worries that last year's astonishing recovery could lose steam, particularly in the matured economies, notwithstanding the ultra-loose monetary policies and the unprecedented fiscal stimulus. Gains in the US dollar accelerated as investors and fund managers fled risky assets and sought refuge in the relative safety of the greenback. The US dollar rose to an eight-month high against the euro. The dollar gained amid discouraging signals in several European countries as well as a mixed US jobs report for January.
The cost to protect against a default on European sovereign debt exceeded that of US investment-grade companies for the first time. Bond prices rose, pushing the yields down, amid heightened fears about the fiscal stability of Greece, Spain and Portugal. The dollar’s climb reduced the appeal of commodities as an alternative investment. Crude oil tumbled to a seven-week low as the dollar surged on speculation that European efforts to reduce deficits will curb growth in that region. Crude oil futures posted their worst loss in six months on Feb. 4.
Asian currencies dropped for a fourth week, the longest run of losses since June, as concern that some European nations will struggle to contain and finance budget deficits eroded demand for emerging-market assets. The MSCI Asia-Pacific Index of regional shares slumped to a 10-week low. Emerging-market equity funds lost US$1.6bn in the week ended Feb. 3, the biggest outflow in 24 weeks, according to US-based research company EPFR Global.
The Dow Jones Industrial Average fell below 10,000 level for the first time since Nov. 6. The blue chip US benchmark recovered on the last trading day, albeit marginally, to end above the key level. All the three major US indexes touched three-month lows before recovering on Friday. A three-session rout had sent the US market to its lowest point since last fall. European stocks suffered the biggest weekly slump in 11 months. The Dow Jones Stoxx 600 Index retreated extended the measure’s fourth straight weekly decline to 3.9%.
If it wasn't for strong rallies on Wednesday and Saturday's special session, the Indian market would have suffered more losses. So, to that extent the bulls should consider themselves lucky. However, fortunes may not be favourable to them all the time amid a spate of external concerns besides anxiety over the prospects for the Indian economy. If all goes well in Asian markets, we may extend the gains made in Saturday's special session on Monday. But, since we have already reacted to the US market's recovery, the advance could run out of gas. The sentiment might change for the better if a bailout of the troubled European economies is announced over the weekend. On the flip side, the market could slip anew in the absence of any concrete solution to the region's worsening fiscal issues.
The dismal show by the NTPC FPO and its fallout on the upcoming public issues is another cause for concern, as is the relentless selling by the FIIs. The overseas investors seem to be biding time given the escalated uncertainty and the fact that Budget is just round the corner. So, expect volatility to persist, though chances of a snap-back rally cannot be ruled out completely after the recent reversals. At the same time, one should not jump the gun and resume the buying binge as things might turn ugly again in case of further deterioration in the external environment. Next week will be a truncated one as markets will be shut on Feb. 12 on account of Mahashivratri. IIP data for December will be out next week and is likely to show continued improvement in the industrial sector. Industrial output grew by 11.7% in November.
Market appears oversold, but the mood has remains bearish in the absence of any positive trigger, index can correct further before consolidating; global cues remain a key factor
Extremely bleak global markets kept the domestic benchmark S&P CNX Nifty also at lower levels with significant correction witnessed all through out the week. Although the market was open on Saturday for around 90 minutes, the data till Friday 5th February is only taken as there would be only minor interest in the F&O segment on Saturday. For the week till Friday the market corrected 163.40 points to close at 4718.65. Although on Saturday the market marginally corrected upward by 38.6 points evidently due to some short covering.
Negative global markets and benign mood emanating from the major economies has been a major reason behind the week's mayhem. The trend continues to remain negative although one gets a feeling that it is currently oversold. All throughout the week there was significant short built-up both at the nifty and stock futures, while on the nifty options front also the trend indicated bearishness.
All throughout the week the nifty future closed at a discount to the underlying and the average volume in the F&O space remained higher at Rs 76061.19 crore. For the full week under review, the nifty February future added 14.53 lakh shares in open interest to take the total OI on Friday to 3.14 crore shares. Most of the front-line stock futures also added OI evidently due to short built-up. For e.g. Reliance February futures added 8.66 lakh shares in OI while Tata Steel and Tata Motors added 31.11 lakh shares and 3.13 lakh shares in OI during the week ended 5th February 2010. Now in these situations when the market appears oversold, any positive news flow either domestically or globally may induce significant short covering, which may sharply pull back the underlying. In the absence of any positive news, the market appears bearish.
Overall the market wide OI on Friday stood at 189.74 crore shares, thus rising by 2.32 crore shares as compared to the previous day. Major activity was witnessed in the stock futures & options segment.
Extremely bearish scenarios were evident in the nifty option front where the most active strikes were the 4600 & 4700 calls besides 4400, 4800 and 4900 puts. Aggressive call writing was witnessed at the 4600 and up strikes, while puts were bought at the 4700 and below strikes. The surprising was the activity at the 4400 strike put which added significant buying. These are flat negative indicators suggesting further downward pull.
On Friday, 5th February 2010 the OI of 4600 and 4700 call increased by 5.75 lakh shares and 10.88 lakh shares respectively to take their total OI to 6.61 lakh shares and 20.03 lakh shares respectively. The 4700 strike put added 9.36 lakh shares in OI while the 4400 put witnessed addition of 12.47 lakh shares in OI on Friday
The market may seem oversold at this level but in the absence of any positive trigger, the mood remains bearish. It looks as though that there is further correction left before the index consolidated at some level. The mood in the global market will remain a key factor in the forthcoming weeks.
Deal Date Scrip Code Company Client Name Deal Type * Quantity Price **
6/2/2010 532995 Avon Corp VINODAMRATLALNAAI B 387294 9.74
6/2/2010 505923 Ceekay Daikin RAJASTHAN GLOBAL SEC LTD B 32986 163.85
6/2/2010 504351 Empower Inds KIRAN MULJI SHAH HUF B 75000 24.22
6/2/2010 504351 Empower Inds JIGNESHCHANDRAKANTSHAH B 76000 24.94
6/2/2010 504351 Empower Inds JAYESH BHAGWANJI SHAH HUF S 69189 23.89
6/2/2010 530263 Global Capital VARSHAJAYANTKUMARJAIN S 130000 93.12
6/2/2010 505576 Goldcrest Fin PADMAKSHI COMMODITIES PVT LTD B 100000 32.00
6/2/2010 505576 Goldcrest Fin PADMAKSHI EDUCATION PVT LTD B 100000 31.94
6/2/2010 505576 Goldcrest Fin PADMAKSHI FINANCIAL SERVICES PVT. LTD. S 195000 32.00
6/2/2010 523467 Jai Mata Glass JITENDRARAMESHKUMARAGRAWAL B 93500 3.06
6/2/2010 523467 Jai Mata Glass MANSI MILAN CHOKSI B 114211 3.08
6/2/2010 523467 Jai Mata Glass MANSI MILAN CHOKSI S 75385 3.10
6/2/2010 523467 Jai Mata Glass DHEERAJLOHIA S 146799 3.07
6/2/2010 517554 Midpoint Soft NILESH DATTATRAYA JADHAV S 5273 38.58
6/2/2010 512097 Oregon Comm HALAN PROPERTIES PRIVATE LTD. B 7590 191.09
6/2/2010 512097 Oregon Comm HALAN PROPERTIES PRIVATE LTD. S 7590 193.30
6/2/2010 512097 Oregon Comm NARESH S RUPANI S 6000 180.33
6/2/2010 512097 Oregon Comm SELECT PRODUCTS PVT LTD S 6677 180.01
6/2/2010 512097 Oregon Comm JYOTINARESHRUPANI S 4800 180.86
6/2/2010 590077 Ranklin Sol OMPARKASHGUPTA B 29994 55.83
6/2/2010 590077 Ranklin Sol RAMESH KUMAR TUMMAPALA B 27644 55.17
6/2/2010 532311 Tutis Tech SHINGAR DYES AND CHEMICALS LTD B 89650 22.44
6/2/2010 531249 Well Pack Papers LAXMAN DHIRUBHAI PARMAR S 35000 422.80
Date,Symbol,Security Name,Client Name,Buy/Sell,Quantity Traded,Trade Price / Wght. Avg. Price,Remarks
06-FEB-2010,DECOLIGHT,Decolight Ceramics Limite,BLUE PEACOCK SECURITIES PVT LT,BUY,104586,12.82,-
06-FEB-2010,RMEDIA,Rel. Media World Ltd,KALASH SHARES & SECURITIES PRIVATE LIMITED,BUY,319758,89.35,-
06-FEB-2010,RMEDIA,Rel. Media World Ltd,SETU SECURITIES LTD,BUY,404155,92.23,-
06-FEB-2010,RMEDIA,Rel. Media World Ltd,VIJIT SHARES AND COMMODITIES PVT.LTD.,BUY,316522,92.36,-
06-FEB-2010,SHREEASHTA,Shree Ashtavinayak Cine V,SUMAN,BUY,817335,26.91,-
06-FEB-2010,DECOLIGHT,Decolight Ceramics Limite,BLUE PEACOCK SECURITIES PVT LT,SELL,50000,12.97,-
06-FEB-2010,RMEDIA,Rel. Media World Ltd,KALASH SHARES & SECURITIES PRIVATE LIMITED,SELL,319758,89.35,-
06-FEB-2010,RMEDIA,Rel. Media World Ltd,SETU SECURITIES LTD,SELL,378641,92.15,-
06-FEB-2010,RMEDIA,Rel. Media World Ltd,VIJIT SHARES AND COMMODITIES PVT.LTD.,SELL,280240,92.34,-
06-FEB-2010,SHREEASHTA,Shree Ashtavinayak Cine V,SUMAN,SELL,816337,26.68,-
RIL looks at $2-billion acquisition in Canada
Dubai PE firm sells 13% stake in SpiceJet
NTPC clouds primary market prospects
Telcos set to go TO HC over 'illegal' towers
On Special live trading on Saturday Feb 06, 2010 for first time in history of domestic market, the Sensex resumes firm and opens above 15800. As day progressed on the back of buying in reality and Metal stocks helps Sensex to touch the intraday high of 15933. Currently the Sensex trading at 15919 up 127 points and Nifty is trading above 4750 mark at 4755 up 36 points.
The market breadth on the BSE is strong. Out of 1776 stocks trading on thye BSE, there are 1289 advancing stocks as against 443 declines. The broader indices are trading up the BSE Mid cap index was up by 1.25% and BSE Small cap index is gains by 1.54%.
Major gainers in the 30-share index were Hindalco Industries (2.43%), D L F (2.25%), Sterlite Industries (India) (2.08%), Tata Steel (1.50%), Tata Motors (1.30%), and ACC (1.19%). On the other hand, and Hero Honda Motors (0.70%) were the biggest losers in the Sensex
The Asian market trades lower as exporters hurt by a stronger yen, while escalating sovereign debt problems in Europe dented investor confidence in riskier assets including equities.
The key benchmark indices jumped during the 90-minutes special trading session held today, 6 February 2010, tracking a strong intraday rebound of US stocks on Friday, 5 February 2010. The US unemployment rate surprisingly fell to a five-month low in January 2010, data showed on Friday. The BSE 30-share Sensex rose 124.72 points or 0.79%, off close to 35 points from the day's high and up close to 110 points from the day's low.
Index heavyweight Reliance Industries (RIL) edged higher. Metal, realty, infrastructure, IT, auto and banking stocks gained. All the sectoral indices on BSE were in the green. The market breadth was strong.
Indian stock tumbled over the past few weeks as stocks fell worldwide. From a recent high of 17686.24 on 5 January 2010, the Sensex tanked 1895.31 points or 10.71% to settle at 15790.93 on Friday, 5 February 2010.
The top two stock exchanges, the National Stock Exchange (NSE) and the BSE held a special 90-minute trading session today, 6 February 2010, to enable the National Stock Exchange test an upgraded trading system. The trading in the cash and futures market began at 11:00 IST and ended at 12:30 IST
Chairman of the prime minister's economic advisory council C. Rangarajan on Friday said the government is no hurry to roll back economic stimulus measures in one go. He also said that efforts will be made in the budget later this month to lower the fiscal deficit. It has been pointed out repeatedly that the process of exit must be gradual, coordinated and must not be sudden, should not disrupt the economy and efforts will be made to bring down the fiscal deficit in the coming budget, Rangarajan said.
India can gradually start raising interest rates as Asia's third-largest economy is among the first to recover after the global financial crisis, the International Monetary Fund (IMF) said in a report published on Thursday 4 February 2010 on its website. India's economy is one of the first in the world to recover and the central bank should take a gradual approach to ensure the recovery reaches its full potential, the IMF report said.
The International Monetary Fund sees the Indian economy coming back to potential by 2010-11 to log 8% growth from the current year's 6.75 per cent. Still, the IMF's assessment of GDP growth for the current fiscal is in contrast to the government's projection of more than 7% and the RBI's latest forecast of 7.5%
Following rising prices of potato and pulses, food inflation rose to 17.56% in the week ended 23 January 2010 from 17.40% in the previous week, government data released on Thursday showed. The inflation for primary articles, which include food and non-food items, marginally eased to 14.56% in the reporting week from 14.66% in the previous week. The fuel price index rose 5.88%
Pronab Sen, the country's chief statistician, said on Wednesday the government should wait till May to roll back stimulus, as the strength of the demand recovery visible in available data may not be for real, pulling the finance minister, Pranab Mukherjee, away from a policy direction which the Reserve Bank of India (RBI) desires.
European stocks declined for a third day on Friday, 5 February 2010, extending the biggest weekly slump in 11 months, on concern efforts by Greece, Portugal and Spain to reduce their deficits will hurt the region's economic recovery. The key benchmark indices in France, Germany and UK fell by between 0.03% to 1.79%.
European Central Bank President Jean-Claude Trichet has struggled to convince investors the euro region shouldn't be punished for Greece's budget problems. As Greece tries to control a record deficit and stem a slide in its bonds, Trichet said the economy of the 16-nation euro area is solid and its budget shortfall will probably be smaller than those of the US and Japan this year.
US stocks rose on Friday, with the Dow Jones Industrial Average erasing a 167-point drop in the final hour of trading, on speculation the European Union may propose a solution for Greece's budget deficit. The Dow Jones Industrial Average gained 10.05 points, or 0.1%, to 10,012.23. The Nasdaq Composite Index was up 15.69 points, or 0.74%, to 2141.12. The Standard & Poor's 500 Index was up 3.08 points, or 0.29%, to 1066.19.
The US unemployment rate surprisingly fell to a five-month low of 9.7% in January 2010 and factory payrolls grew for the first time since 2007, hinting at a labour market recovery even though the economy lost 20,000 jobs.
Closer home, the BSE 30-share Sensex rose 124.72 points or 0.79% to 15,915.65. The index rose 16.82 points at the day's low of 15,807.75 in early trade. The Sensex rose 160.14 points at the day's high of 15,951.07 at the fag end of the trading session.
The S&P CNX Nifty rose 38.60 points or 0.82% to 4757.25.
The market breadth, indicating the overall health of the market was strong. On BSE, 1806 shares advanced as compared with 657 shares that declined. A total of 56 shares remained unchanged.
From the 30 share Sensex pack, 25 rose and one fell.
The BSE Mid-Cap index rose 1.59% and the BSE Small-Cap index rose 1.74%. Both the indices outperformed the Sensex. The BSE clocked a turnover of Rs 825 crore.
Index heavyweight Reliance Industries (RIL) rose 1.66% on bargain hunting after the stock fell 3.74% on Friday. As per reports, RIL has submitted a $2 billion expression of interest for Value Creation Inc, a Canada-based private firm which holds oil sands assets.
Infrastructure stocks rose on reports the government is considering new guidelines for private equity investment in infrastructure companies in an attempt to open new sources of equity funding for the sector. The move comes in the backdrop of the poor response from private companies and banks in financing projects, especially those in sectors like highways and urban transport and infrastructure. Larsen & Toubro, Bharat Heavy Electricals, Jaiprakash Associates, Era Infra Engineering rose by between 0.52% to 2.16%.
Simplex Infrastructures gained 0.29%, after the company said one of the promoter group companies revoked a substantial portion of pledged shares.
Auto stocks rose on strong vehicle sales in the month of January 2010. Tata Motors, Mahindra and Mahindra, Maruti Suzuki India, TVS Motor Company, Hero Honda Motors, Bajaj Auto rose by between 0.07% to 1.27%.
Banking stocks rose on bargain hunting. India's largest private sector bank by net profit ICICI Bank rose 0.85%. The bank's American depository receipt (ADR) slumped 3.54% on the New York Stock Exchange on Friday, 5 February 2010.
India's largest private sector bank by net profit HDFC Bank was flat at Rs 1573.10. The bank's American depository receipt (ADR) slumped 3.77% on the New York Stock Exchange on Friday, 5 February 2010.
India's largest bank by net profit and branch network State Bank of India rose 1.02%.
IT pivotals gained after a mixed US job data for January 2010. US is a key market for Indian IT firms. India's second largest IT exporter by sales Infosys rose 1.31%. Its ADR rose 0.57% on Friday.
India's third largest software services exporter Wipro rose 1.42%. Its ADR fell 1.11% on Friday. As per recent reports, Wipro Consumer Care and Lighting, the FMCG arm of Wipro, is in advanced talks to buy Nigeria-based skincare company, Tura International.
India's largest IT exporter by sales Tata Consultancy Services rose 0.81%. Reportedly TCS' Passport Seva Project, which aims to issue passports in flat three days, is all set to be launched in a week or two.
The National Association of Software and Service Companies (Nasscom) has projected export revenue to grow 13% to 15% to $56-$57 billion in the year to March 2011, below the previous outlook for $60-$62 billion.
Realty stocks rose on bargain hunting. DLF, Unitech, Indiabulls Real Estate, Anat Raj Industries and Housing Development & Infrastructure rose by between 2.15% to 6.76%.
Metal stocks also rose on bargain hunting after a recent sharp fall. Sterlite Industries, Hindalco Industries, National Aluminium Company, Sesa Goa and Hindustan Zinc rose by between 1.16% to 2.82%.
Tata Steel the world's eighth-largest steel maker rose 2.03% after the company said on Friday steel sales from its Indian operations rose 9% in to 5,56,000 tonnes in January 2010 over January 2009. Crude steel output for the month rose 14% from a year ago to 5,96,000 tonnes.
The Indian operations account for about a quarter of the group's total annual capacity of 30 million tonnes, which includes unit Corus, Europe's second-largest steelmaker. Sales of long products, used in construction, rose 10 % in January from a year earlier, while sales of flat products, used in automobiles and consumer goods, increased 8 %, the company said in a statement.
McNally Bharat Engineering Company rose 1.11%, after the company bagged two orders aggregating Rs 56.64 crore from Hindalco for its smelter projects.
Indo Asian Finance was locked at 5% upper limit at Rs 27.35, after the company's board approved issue of bonus shares in the ratio of 2:1.