Sensex, Nifty settle at 2-month highs as Infy, ICICI Bank sizzle

After team India's splendid feat in Ahmedabad on Thursday, 24 March 2011 dethroning the Aussies to enter the semi-finals of the World Cup 2011, today, 25 March 2011 it was the turn of Indian bourses. Stock markets mimicked Indian cricket team's all round performance as bulls went on rampage sending stocks across sectors rallying. Just as Yuvraj, Sachin and Gambhir steered India's way to the victory, heavyweights Infosys, ICICI Bank and Reliance Industries anchored the BSE Sensex and the S&P CNX Nifty to two-month closing highs.



The barometer index BSE Sensex shut shop with gain of 464.90 points or 2.53% at 18,815.64, up 334.95 points from the day's low and off 42.66 points from the day's high. Higher world stocks and data showing buying by foreign funds recently, perked up sentiments. Stocks extended gains for the fourth day in a row today, 25 March 2011, on recent bullish comments on India from billionaire legendary investor Warren Buffett and on hopes for economic reforms with the government tabling some key reforms bills in parliament this week.

The market breadth was strong. All the sectoral indices on BSE logged gains. Auto stocks were in demand on renewed buying. Banking stocks extended recent gains after the government Tuesday, 22 March 2011, tabled banking sector amendment bill in parliament. Metals stocks extended Thursday's gain on hopes of higher demand as Japan begins redevelopment after a devastating earthquake and tsunami on 11 March 2011. Software stocks were in demand on encouraging US tech earnings overnight. Fertiliser shares edged higher on reports of higher demand for fertilizer in the upcoming monsoon season. Retail shares were mixed.

Interest rate sensitive realty shares gained for the third straight session of trade after State Bank of India (SBI) chairman OP Bhatt reportedly ruled out any hike by the bank in short term interest rates recently. Telecom stocks rose on fresh buying. Shares of MNC associate firms rallied on momentum buying. Index heavyweight Reliance Industries rose as higher crude oil prices will help boost refining margins.

A firm opening took the 50-unit S&P CNX Nifty to 3-week high and the barometer index BSE Sensex to its highest level in more than 2 weeks. The market soon pared gains. The Sensex regained strength in morning trade. The barometer index hit a fresh intraday high in mid-morning trade. The market pared gains in early afternoon. The key benchmark indices spurted in afternoon trade. The market surged to two-month high in mid-afternoon trade. The market pared gains after hitting fresh intraday high in late trade.

The BSE 30-share Sensex was up 464.90 points or 2.53% to 18,815.64, its highest closing since 25 January 2011. The index gained 507.56 points at the day's high of 18,858.30 in late trade. The Sensex rose 129.95 points at the day's low of 18,480.69 in early trade.

The S&P CNX Nifty was up 131.85 points or 2.39% to 5,654.25, its highest closing since 25 January 2011. The Nifty hit an intraday high of 5,667.10.

The market breadth, indicating the health of the market, was strong. On BSE, 1722 shares advanced while 1255 shares declined. A total of 106 shares remained unchanged.

The BSE Mid-Cap index rose 1% and the BSE Small-Cap index rose 1.02%. Both these indices underperformed the Sensex.

All the 13-sectoral indices on the BSE logged gains. The BSE IT (up 4.02%), the BSE TecK (up 3.49%), and the Bankex (up 2.72%), outperformed the Sensex. The BSE Consumer Durables (up 0.78%), the BSE Healthcare (up 0.37%), and the BSE Metal (up 0.81%), underperformed the Sensex.

The total turnover on BSE amounted to Rs 3265 crore, lower than Thursday's Rs 3553 crore

All the 30 members from the Sensex pack logged gains. Tata Power (up 3.67%), HDFC (up 2.71%), and Larsen & Toubro (up 2.65%), edged higher from the Sensex pack.

Index heavyweight Reliance Industries (RIL), extended gains in late trade, advancing 1.67% to Rs 1027 as higher crude oil prices will help boost refining margins. The stock moved between Rs 1029 and Rs 1010.40 during the day.

India's largest oil exploration firm by market capitalization Oil and Natural Gas Corporation (ONGC) was up 0.44% as higher crude oil prices may boost realization from crude sales.

Interest rate sensitive realty shares gained for the third straight session of trade after State Bank of India (SBI) chairman OP Bhatt reportedly ruled out any hike by the bank in short term interest rates recently. Majority of property and auto deals are driven by finance. India's largest realty firm by market capitalization DLF surged 5.59% to Rs 247.25 and was the top gainer from the Sensex pack.

Godrej Properties (up 5.21%), HDIL (up 1.86%), Orbit Corporation (up 0.77%), Indiabulls Real Estate (up 2.92%), Parsvnath Developers (up 6.73%), edged higher.

Software stocks were in demand on encouraging US tech earnings overnight. India's second largest software services exporter Infosys Technologies jumped 4.66%. India's third largest software services exporter Wipro advanced 3.72% after its ADR gained 1.51% on Thursday, 24 March 2011.

India's largest software services exporter Tata Consultancy Services (TCS) gained 2.06% after the company signed a contract with Shanghai Rural Commercial Bank to implement its core banking solution, BaNCS, to achieve competitive advantage. The deal will help TCS to scale up its revenue from the banking, financial services and insurance (BFSI) vertical, which currently contributes 44.6% to the company's revenue.

Financial Technologies (India) soared 6.95% to Rs 822.60 following reports that Multi Commodity Exchange, which is promoted by the company, is planning to list on stock exchanges by September 2011.

Banking stocks extended recent gains after the government Tuesday, 22 March 2011, tabled banking sector amendment bill in parliament. India's largest private sector bank by net profit ICICI Bank shot up 3.37%, extending two-day 4.93% gains. Its ADR advanced 2.78% on Thursday, 24 March 2011. India's second largest private sector bank by net profit HDFC Bank gained 3.08% after its ADR gained 2.08% on Thursday, 24 March 2011.

India's largest bank by branch network and net profit State Bank of India (SBI) rose 1.94%. The parliament had approved the SBI Amendment Bill on Wednesday, 23 March 2011 which is likely to pave way for the bank to expand its capital base and make the process of merger of the subsidiary banks with itself smoother.

The government on Tuesday, 22 March 2011, sought parliamentary approval to amend a banking law for allowing investors in private banks to have voting rights proportional to their shareholdings, a long-awaited move to help grow the sector. Currently, the voting right of a single individual or entity in private banks is limited to 10%, irrespective of their shareholding. The bill, introduced by Finance Minister Pranab Mukherjee, also sought to raise the cap on investor voting rights in state-run banks to 10% from 1%, and lift the cap on state-run banks' authorised capital.

Infrastructure Development Finance Company (IDFC) rose 1.43%. The company today said public issue of long term infrastructure bonds (tranche 3 by IDFC) closed for subscription on 21 March 2011 and the total sum of Rs 228.05 crore was collected as application money.

Auto stocks were in demand on renewed buying. India's largest truck maker by sales Tata Motors rose 2.55% after the company's American depository receipt, or ADR gained 2.38% to $26.62 on the New York Stock Exchange on Thursday, 24 March 2011.

India's largest tractor maker by sales Mahindra & Mahindra (M&M) rose 1.60%. After market hours on Wednesday, 23 March 2011, M&M said it will set up a tractor manufacturing unit at its existing facility at Zaheerabad in Medak district of Andhra Pradesh. The company will invest over Rs 300 crore in the plant, which will be spread across 100 acres. The plant will have an installed capacity of 100,000 tractors a year, which can be scaled up to meet additional demand, M&M said in a press release. Production from the unit will begin in 2012.

India's largest car maker by sales Maruti Suzuki India rose 1.23% on bargain hunting. India's largest bike maker by sales Hero Honda Motors rose 0.97% while India's second largest bike maker by sales Bajaj Auto gained 1.97%.

Metals stocks extended Thursday's gain on hopes of higher demand as Japan begins redevelopment after a devastating earthquake and tsunami on 11 March 2011. LMEX, a gauge of six metals traded on the London Metal Exchange, rose 0.07% on Thursday, 24 March 2011.

India's largest private sector steel maker by sales Tata Steel rose 0.61%. Tata Steel today informed that the transfer of ownership of the certain assets of Teesside Cast Products by its subsidiary Tata Steel UK to Sahaviriya Steel Industries UK was completed on 24 March 2011.

Hindalco Industries (up 0.51%), Sail (up 1.91%), JSW Steel (up 0.86%), Jindal Saw (up 1.05%), Sterlite Industries (India) (up 0.51%), edged higher.

Hindustan Zinc surged 4.33% after the company hiked both zinc and lead prices. Hindustan Zinc has hiked the prices of zinc, used in producing galvanized steel, by Rs 1200 a tonne, or 1%, to Rs 120800 a tonne. The company has also increased lead prices by Rs 4400 a tonne, or 3.25% to Rs 139600 a tonne.

Usha Martin jumped 6.07% after the company said it has arranged $125 million through external commercial borrowing to finance capital expenditure programme. The company made this announcement after market hours on Thursday, 24 March 2011.

Telecom pivotals rose on fresh buying. India's largest listed cellular services provider by sales Bharti Airtel rose 1.53%. Reportedly, the firm has ruled out any immediate plan to list its telecom tower infrastructure unit, Bharti Infratel, and joint venture firm Indus Towers.

India's second largest listed cellular services provider by sales Reliance Communications (RCom) rose 1.62%. RCom reportedly on Thursday said in New Delhi that it would provide unlimited internet usage to its prepaid wireless subscribers in semi-urban and rural areas for Rs 169 per month.

India's largest power utility firm by capacity NTPC rose 3.73% on reports the company plans to raise as much as $500 million through dollar denominated bonds. As per recent reports, NTPC would use the proceeds from overseas bonds to fund its plan to add 5,000-megawatt capacity next fiscal. The company would raise additional funds depending on the interest rates, reports added. NTPC has also asked the power ministry to facilitate raising funds through tax-free bonds in the country, reports suggest.

India's largest power equipment maker by sales Bharat Heavy Electricals (Bhel) advanced 2.02%. The stock extended two-day 5.31% gain after the company during trading hours on Wednesday, 23 March 2011 said it won an order in a consortium with ABB from Indian state-run Power Grid for a power transmission link. The order value for Bhel is Rs 1590 crore, making it the largest order for the company in the power transmission and distribution sector.

Retail stocks saw mixed reaction after Finance Minister Pranab Mukherjee said the government has not taken a decision on opening up the supermarket sector to foreign investors continuing a stalemate on the long-awaited reform that will open the door to Wal-Mart and Carrefour. India restricts foreign firms to operating wholesale outlets or single-brand stores.

Pantaloon Retail (India) lost 2.45% and Shoppers Stop was marginally down by 0.06% while Trent gained 2.33%.

Shares of MNC associate firms rallied on momentum buying. While moving the Finance Bill in the Parliament on 22 March 2011, the Finance Minister Pranab Mukherjee had announced a reduction in dividend distribution tax threshold for foreign companies to 26% from 50%.Thomas Cook (India) (up 20%), Elantas Beck India (up 8.42%), Ingersoll-Rand (India) (up 4.81%), Bayer CropScience (up 4.37%), Merck (up 3.88%), Areva T&D (up 4.58%), Esab India (up 3.69%) and BOC India (up 4.30%) gained.

Fertiliser shares edged higher on reports demand for fertilizer may climb 4% this monsoon season as the nation seeks to boost output of staples to curb prices. Monsoon in India runs between June to September. National Fertilizers (up 0.49%), Nagarjuna Fertilisers & Chemicals (up 1.65%), Chambal Fertiliser & Chemicals (up 6.92%), Rashtriya Chemicals & Fertilisers (up 2.02%), Tata Chemicals (up 1.88%), and GSFC (up 0.93%), advanced.

Lovable Lingerie was the top traded counter on BSE with turnover of Rs 125.91 crore followed by State Bank of India (Rs 89.35 crore), ICICI Bank (Rs 75.57 crore), Tata Coffee (Rs 72.63 crore), and Infosys Technologies (Rs 68.71 crore).

Cals Refineries clocked highest volume of 5.49 crore shares on BSE. Unitech (89.12 lakh shares), Shree Ashtavinayak Cine Vision (74.58 lakh shares), Splash Media Works (57.80 lakh shares) and Acropetal Technologies (53.32 lakh shares), were the other volume toppers in that order.

Foreign institutional investors (FIIs) bought shares worth a net Rs 345.50 crore on Thursday, 24 March 2011, compared with an inflow of Rs 393.30 crore on Wednesday, 23 March 2011. FII inflow in March 2011 totaled Rs 2354.20 crore (till 24 March 2011). FIIs had sold equities worth Rs 4585.50 crore in February 2011. FII outflow in the calendar year 2011 totaled Rs 7044.40 crore (till 24 March 2011).

Billionaire investor and international investment icon Warren Buffett who is in his maiden visit to India said on Tuesday, 22 March 2011, that he hopes to spend some money in India. His firm Berkshire Hathaway is looking to park funds in large investment destinations and India fits the bill perfectly, he said. India, according to him, is not an emerging market but a very big country with a large number of significant businesses. He said that Berkshire Hathaway would look at possible acquisitions in India as and when there were opportunities. The legendary investor would be meeting Prime Minister Manmohan Singh and insurance sector regulator Irda's Chairman J Harinarayan among others later this week.

The near term major trigger for the market is Q4 March 2011 results. Advance tax payments made by top 100 firms based in the country's financial capital --Mumbai reportedly rose by 25% in the Q4 March 2011 over Q4 March 2010, hinting robust earnings. Companies pay advance tax every quarter based on their projected income for the year.

The government introduced a long-awaited pension bill in parliament on Thursday, 24 March 2011, that would pave the way for private players in the sector and help cut government spending. The Pension Regulatory and Development Authority (PFRDA) bill, which would allow part investment of the corpus in the stock market, will take time for parliamentary approval as the current session of parliament ends this week.

The government on Tuesday, 22 March 2011, introduced in parliament the Constitution Amendment Bill to facilitate implementation of Goods and Services Tax (GST). The Bill is likely to be referred to the Parliamentary Standing Committee for scrutiny. The GST seeks to replace multiple indirect taxes, such as the central excise duty and services tax, and state taxes including value added tax, entry tax and purchase tax, with a neat single levy.

US crude futures were up 14 cents a barrel or 0.13% to $105.74 a barrel. Oil prices have surged in recent months amid ongoing turmoil in oil rich Middle East and North Africa regions. High global crude oil price is a cause of concern for India which imports 70% of its oil requirements. Surging oil prices have stoked concerns about higher inflation and interest rates.

European markets were firm on Friday, 25 March 2011 as investors brushed aside sovereign-debt concerns and instead focused on strong economic and corporate news. The key benchmark indices in UK, Germany and France were up by between 0.25% to 0.35%.

Asian markets were trading higher on Friday, 25 March 2011 on signs the US economy is strengthening. The key benchmark indices in Singapore, Japan, China, South Korea, Taiwan and Hong Kong rose by between 0.40% and 1.07%. Indonesia's Jakarta Composite fell 0.13%.

The International Monetary Fund (IMF) is reportedly working on activating its crisis lending pool, a move aimed at showing it has enough liquidity to help bail out countries in need and stabilize the global economy. Countries that contribute to the pool, with new members including China and India, are seeking an agreement on how much of the credit line's $583 billion should be made available and for how long.

US stocks gained Thursday, 24 March 2011, as encouraging earnings and outlooks issued by technology companies helped investors look past the deepening European sovereign debt crisis. The Dow Jones Industrial Average rose 84.54 points, or 0.7%, to 12170.56. The Nasdaq Composite gained 38.12, or 1.4%, to 2736.42 and the Standard & Poor's 500-stock index added 12.12, or 0.9%, to 1309.66.

Trading in US index futures indicated that the Dow could rise 44 points at the opening bell on Friday, 25 March 2011.