Bank stocks lead rally

Key benchmark indices surged as world stocks rose after opinion polls in Greece showed a lead for a party favoring the country's economic bailout in upcoming elections and amid expectations for a policy stimulus in China to support growth. China is the world's second biggest economy after the US. The 50-unit S&P CNX Nifty attained its highest closing level in almost three weeks. The barometer index, BSE Sensex, scaled its highest closing level in 2-1/2 weeks. The Sensex jumped 199.02 points or 1.23%, off about 20 point from the day's high and up about 145 points from the day's low. The market breadth was strong. All the 13 sectoral indices on BSE were in the green. The Sensex has declined 901.97 points or 5.2% in May 2012 so far (till 28 May 2012). The Sensex has gained 961.92 points or 6.22% in calendar 2012 so far (till 28 May 2012). From a 52-week low of 15,135.86 on 20 December 2011, the Sensex has risen 1,280.98 points or 8.46%. From a 52-week high of 19,131.70 on 8 July 2011, the Sensex has lost 2,714.86 points or 14.19%. Coming back to today's trade, banking and power generation stocks rose almost across the board. Index heavyweight Reliance Industries (RIL) edged higher. India's second biggest state-run oil exploration firm Oil India fell after weak Q4 results. PSU OMCs fell after Oil Minister Jaipal Reddy today, 28 May 2012, said the government is not considering any immediate increases in diesel and cooking fuel prices. India's second largest mobile services provider by sales Reliance Communications (RCom) rose after strong Q4 results. The market edged higher in early trade. The market trimmed gains after hitting fresh intraday high in morning trade. The market extended gains to hit fresh intraday highs in mid-morning trade. The uptrend continued as key benchmark indices hit fresh intraday highs in early afternoon trade. The 50-unit S&P CNX Nifty pared gains after hitting its highest level in nearly 2-1/2 weeks in afternoon trade. The Sensex trimmed gains after hitting two-week high. The market regained strength in mid-afternoon strength. The market extended gains in late trade. The market may remain volatile this week as traders roll over positions from the near-month May 2012 series to June 2012 series. The May 2012 derivatives contracts expire on Thursday, 31 May 2012 The BSE Sensex jumped 199.02 points or 1.23% to settle at 16,416.84, its highest closing level since 10 May 2012. The index jumped 222.15 points at the day's high of 16,439.97 in late trade. The index gained 55.67 points at the day's low of 16,273.49 in early trade. The S&P CNX Nifty surged 65.25 points or 1.33% to settle at 4,985.65, its highest closing level since 8 May 2012. The index hit a high of 4,994.95 and a low of 4,931.30 in intraday trade. The BSE Mid-Cap index rose 1.21% and the BSE Small-Cap index gained 0.87%. Both these indices underperformed the Sensex. BSE clocked turnover of Rs 1585 crore, lower than Rs 1793.83 crore on Friday, 25 May 2012. The market breadth, indicating the overall health of the market, was strong. On BSE, 1,714 shares advanced and 1,008 shares declined. A total of 116 shares were unchanged. Among the 30-share Sensex pack, 24 rose while the rest declined. Index heavyweight Reliance Industries (RIL) gained 1.29%. The company early last week said it has selected Phillips 66's E-Gas technology for its planned gasification plants at Jamnagar in Gujarat. The planned gasification plants at Jamnagar will be among the largest in the world and will process petroleum coke and coal into synthesis gas utilizing the E-Gas technology, RIL said in a statement. The synthesis gas will be used as a feedstock for a new chemical complex and will fuel the Jamnagar refinery's existing gas turbine power generation units, RIL said in a statement. Cairn India rose 1.14% as US crude oil futures climbed for a third straight day today, 28 May 2012, on signs voters in Greece may back austerity measures needed for a European Union bailout. Higher crude oil prices will result in higher realization from crude sales for oil exploration firms such as Cairn India. Oil India fell 0.12% after the company announced during market hours today, 28 May 2012, its net profit fell 20.93% to Rs 444.81 crore on 5.23% fall in total income to Rs 2141 crore in Q4 March 2012 over Q4 March 2011. A sharp surge in fuel subsidy sharing burden adversely impacted Oil India's results in Q4 March 2012. The subsidy sharing burden jumped 78.99% to Rs 2873.65 crore in Q4 March 2012 over Q4 March 2011. Subsidy discounts adversely impacted the profit before tax (PBT) by Rs 2410.18 crore and profit after tax (PAT) by Rs 1650 crore in Q4 March 2012. Three state-run upstream oil firms -- Oil India, ONGC and GAIL (India) -- share part of the under-recoveries of state-run oil refining-cum-market firms arising from the government-imposed price caps on three key fuels -- diesel, LPG for domestic use and kerosene sold through the public distribution system. Oil India's net profit rose 19.36% to Rs 3446.92 crore on 22.99% growth in total income to Rs 11308.60 crore in the year ended 31 March 2012 (FY 2012) over the year ended 31 March 2011 (FY 2011). Oil India's subsidy sharing burden jumped 123.24% to Rs 7351.77 crore in FY 2012 over FY 2011. Subsidy discounts adversely impacted the profit before tax (PBT) by Rs 6162.37 crore and profit after tax (PAT) by Rs 4162.99 crore in FY 2012. Oil India's consolidated net profit rose 20.3% to Rs 3469.18 crore on 22.99% growth in total income to Rs 11308.60 crore in the year ended 31 March 2012 over the year ended 31 March 2011. India's largest state-run oil exploration firm by sales ONGC declined 1.26% ahead of its FY 2012 results tomorrow, 29 May 2012. PSU OMCs fell after Oil Minister Jaipal Reddy today, 28 May 2012, said the government is not considering any immediate increases in diesel and cooking fuel prices. BPCL fell 1.9% and HPCL declined 1.15%. The three state-run oil refining-cum-marketing companies -- Indian Oil Corporation, BPCL and HPCL -- sell diesel and cooking fuels at government-set, discounted prices. Because of this, they are losing Rs 509 crore a day on the sale of these products. PSU OMCs, last week, raised petrol prices by a steep 11.5%, leading to protests. Opposition parties have called a Bharat Bandh on Thursday, 31 May 2012, to protest against the steep hike in petrol prices. Indian Oil Corporation rose 0.06% after the company announced during market hours today, 28 May 2012, its net profit jumped 224.45% to Rs 12670.43 crore on 31.44% growth in total income to Rs 130305.35 crore in Q4 March 2012 over Q4 March 2011. The company's board declared dividend of Rs 5 per share for the year ended March 2012. Bank stocks rose across the board. India's largest commercial bank in terms of branch network State Bank of India (SBI) jumped 4.76%. The state-run bank reported 19297.84% spurt in net profit to Rs 4050.27 crore on 27.97% growth in total income to Rs 33959.54 crore in the Q4 March 2012 over Q4 March 2011. The result was announced on 18 May 2012. The massive rise in SBI's net profit in the fourth quarter was due to base effect. It may be recalled that SBI had made massive one-time provisions in Q4 March 2011 on account of counter cyclical provisioning buffer, provisions for the teaser home loans and provision for deferred tax. This has resulted in low base effect for year-on-year comparison in Q4 March 2012. SBI's net profit jumped 41.65% to Rs 11707.29 crore on 24.33% growth in total income to Rs 120872.90 crore in the year March 2012 over year March 2011. SBI said it made an additional provision of Rs 1350 crore against certain non-performing domestic advances in the year ended March 2012. The bank's provision converge ratio stood at 68.10% as on 31 March 2012, higher than 64.95% as on 31 March 2011. SBI's board proposed a dividend of Rs 35 per share for the year ended 31 March 2012. SBI's consolidated net profit jumped 43.59% to Rs 15343.10 crore on 19.74% growth in total income to Rs 177032.80 crore in the year ended 31 March 2012 over the year ended 31 March 2011. India's largest private sector bank by net profit ICICI Bank gained 2.29%. India's second largest private sector bank by net profit HDFC Bank gained 1.52%. Among other banking stocks, Bank of India, Bank of Baroda and Punjab National Bank rose by between 2.24% to 3.21%. Power generation stocks advanced almost across the board. NTPC, Tata Power Company, Reliance Power, JSW Energy, Adani Power, Torrent Power, GMR Infrastructure, GVK Power & Infrastructure and Lanco Infratech rose by between 0.22% to 3.81%. Telecom stocks rose after the Telecom Commission (TC) on Saturday put the onus of deciding the contentious issue of the base price for auction of 1,800 MHz of 2G band spectrum on the Empowered Group of Ministers (EGoM) headed by Finance Minister Pranab Mukherjee. Tata Teleservices (Maharashtra), and Idea Celluar gained by between 1.91% to 2,26%. The Telecom Regulatory Authority of India (Trai) had recommended a reserve price of Rs 3,622 crore (Rs 36.22 billion) for one megahertz of spectrum. TC has decided to ask the regulator to take a re-look at the impact that the reserve price would have on tariffs as well as on the viability of investments made by the telcos. India's largest listed telecom services provider by subscribers Bharti Airtel gained 1.22%, with the stock extending recent strong gains triggered by the firm signing an agreement with Qualcomm to acquire an interest in Qualcomm Asia Pacific's Indian BWA entities. Bharti Airtel and Qualcomm, last week, signed an agreement for Bharti to acquire an interest in Qualcomm Asia Pacific's (Qualcomm AP) Indian BWA entities. Under the agreement, Bharti has made an initial investment of approximately $165 million to acquire 49% interest in Qualcomm AP's India entities that hold BWA licenses in Delhi, Mumbai, Haryana and Kerala partly by way of acquisition of 26% equity interest equally held by Global Holding Corporation and Tulip Telecom, and the balance by way of subscription of fresh equity in those entities. The agreement contemplates that once commercial operations are launched, subject to certain terms and conditions, Bharti would assume complete ownership and financial responsibility for the BWA entities by the end of 2014. Ranbaxy Laboratories fell 1.06%. Ranbaxy Laboratories Inc. (RLI), a wholly-owned subsidiary of Ranbaxy Laboratories today announced that the US Food and Drug Administration (FDA) has approved Absorica -- a novel, patented brand formulation of the acne medication isotretinoin, developed by Cipher, for the treatment of severe recalcitrant nodular acne. Through a business agreement with the Canadian firm, Cipher Pharmaceuticals Inc., RLI is expected to launch Absorica in the US in Q4 2012. As per the agreement, Ranbaxy will pay royalties on net sales to Cipher. "We are thrilled to make Absorica available as a valuable option for the dermatologists and patients who need treatment for severe recalcitrant nodular acne. Absorica is a critical milestone in our commitment to serve the dermatology community and will be the flagship brand for Ranbaxy's specialized dermatology sales force," said Venkat Krishnan, Senior Vice President and Regional Director, Americas, Ranbaxy. "Approval of Absorica represents our third FDA approval and most important milestone to date, reflecting the great work by our Scientific Affairs team at Cipher and our partner, Galephar Pharmaceutical Research," said Larry Andrews, President and CEO of Cipher. Most realty stocks rose on renewed buying. HDIL, DLF and Unitech gained by between 0.37% to 3.04%. DB Realty gained 1.79% after consolidated net profit jumped 151.8% to Rs 20.27 crore on 75.1% decline in net sales to Rs 97.72 crore in Q4 March 2012 over Q4 March 2011. Cigarette maker ITC rose 1.34% on strong Q4 results. During market hours on Friday, 25 May 2012, the company reported 26% growth in net profit to Rs 1614.36 crore on 17.6% growth in net turnover to Rs 6861.35 crore in Q4 March 2012 over Q4 March 2011. ITC's net profit jumped 23.6% to Rs 6162.37 crore on 17.2% growth in net revenue to Rs 24798.43 crore in the year ended March 2012 (FY 2012) over the year ended March 2011 (FY 2011). ITC said growth revenue in FY 2012 was primarily driven by a 23.6% growth in the non-cigarette FMCG businesses, 20% growth in Agri business and 16.6% growth in the cigarettes segment. ITC said despite a difficult operating environment in the market place, the company's cigarettes business further improved its market standing in FY 2012. ITC said that the cigarette business faces the daunting challenges of an unprecedented high incidence of taxation, complex tax structure, rising illegal trade and a discriminatory regulatory climate. Despite these challenges, the relentless pursuit of excellence in building robust, world class brands and innovation in processes and investment in appropriate state-of-art technologies will enable it to further consolidate its market standing. A premium line of hand-rolled cigars launched in 2010 under the brand name Armenteros has gained significant consumer franchise, competing against world renowned Cuban and other cigar brands, ITC said. The Armenteros range of cigars is now available in premium outlets across key cigar markets and is expected to further consolidate and grow its franchise, the company said in a statement. FMCG major Hindustan Unilever fell 0.82%. Software pivotals rose across the board. India's largest software services exporter by revenues Tata Consultancy Services (TCS) gained 0.18%. N. Ganapathy Subramaniam, head of TCS's financial services business, said in a recent media interview that TCS is confident that growth in its financial services segment this fiscal year will be around last year's 21%. Mr. Subramaniam added that the pipeline of deals is as strong as what it was a year ago, when global businesses accelerated investments on the expectation of an economic recovery. India's third largest software services exporter by revenue, Wipro rose 1.35%. India's second largest software services exporter by revenue, Infosys rose 0.66%. Metal stocks gained as global commodity prices rose. Hindalco Industries rose 2.82%, with the stock extending Friday's 1.08% gains after company's US unit Novelis on Thursday, 24 May 2012, said that the management continues to expect a market recovery going forward and as a result expects FY 2013 adjusted EBITDA to be above FY 2012 level of $1.05 billion. Novelis expects FY 2013 free cash flow before capital expenditures to be between $600-700 million and capital expenditure of approximately $650-700 million primarily focused on its global expansion projects in Brazil, South Korea, China and the United States. Novelis reported a net loss of $107 million attributable to common shareholders for the quarter ended 31 March 2012 as against net profit of $50 million during the quarter ended 31 March 2011. Net sales declined 11.89% to $2.608 billion in Q4 March 2012 over Q4 March 2011. Novelis said adjusted EBITDA declined 16.78% to $233 million in Q4 March 2012 over Q4 March 2011. The decrease in EBITDA for the quarter and the year were primarily driven by weaker demand, partially offset by higher conversion premiums, Novelis said in a statement. Among other metal stocks, Sterlite Industries, Bhushan Steel, Tata Steel, Sail, JSW Steel and Hindustan Zinc rose by between 0.28% to 4.54%. Shares of Gujarat NRE Coke gained 3.23% after its Australian unit Gujarat NRE Coking Coal said during market hours today that it has entered into an option off take agreement with Jindal Steel & Power and would also make a placement of new shares in favour of Jindal Steel & Power (Mauritius). The shares will be issued under the 15% placement limit available under Listing Rule 7.1. The placement is expected to be completed by 30 May 2012. Gujarat NRE Coking Coal owns and operates two premium hard coking coal mines in the Illawarra region of New South Wales in Australia. Shares of Jindal Steel & Power fell 0.5%. Mahindra & Mahindra (M&M) rose 2.52% after the company today announced that it will open bookings for its cheetah-inspired XUV500 from 8 June 2012. With this announcement, the XUV500 will now be available across India including the existing 19 cities where it had been launched earlier, M&M said in a statement. In the second phase of bookings, the XUV500 was made available in 19 cities across India and had received an overwhelming 25,000 plus booking applications from customers, M&M said. M&M has raised output of XUV500 from 3,000 units to 4,000 units a month to meet the soaring demand for the model. While announcing the nation-wide opening of bookings for the XUV500, Pravin Shah, Chief Executive, Automotive Division, Mahindra & Mahindra said, "It has been an incredible journey so far for the XUV500 and we are pleased to take the product national. We have been inundated with requests for re-opening of bookings not just from existing cities but also from cities where the XUV500 was not available. Now that we have ramped-up our production capacity significantly, we are confident that we will be able to take care of the growing all-India demand for the XUV500.” India's largest commercial vehicle maker by sales Tata Motors rose 2.69% ahead of its FY 2012 results tomorrow, 29 May 2012. Tata Motors has entered into an agreement with Apex Greatest Industrial Co Ltd. (AGI), Myanmar, for the distribution of Tata Motors' commercial vehicles and passenger cars in Myanmar. In March 2010, Tata Motors had signed a turnkey contract with Myanma Automobile & Diesel Industries Limited (MADI), an enterprise under the Government of Myanmar's Ministry of Industry-2, for setting up a heavy truck assembly plant, at Magwe, in central Myanmar, funded by a $20 million Line of Credit from the Government of India. The plant, inaugurated in December 2010, is now operational, Tata Motors said in a statement. With a highly flexible chassis and frame assembly line, along with cab manufacturing, paint shop and trimming set-up, the plant has a capacity of producing 1,000 vehicles per annum initially and has the flexibility of augmenting up to 5,000 per year, Tata Motor said. Small-car maker Maruti Suzuki India lost 1.2%, with the stock extending recent losses triggered by worries the latest steep hike in petrol prices may hit car sales. Shares of two-wheeler makers gained. India's largest motorcycle maker by sales Hero MotoCorp rose 0.4%. Bike maker Bajaj Auto gained 1.09%. Capital goods stocks rose on renewed buying. Bhel, L&T, Thermax and ABB gained by between 1.37% to 4.61%. JK Cements surged 19.04% after net profit jumped 50% to Rs 80.35 crore on 21% growth in net sales to Rs 805.87 crore in Q4 March 2012 over Q4 March 2011. Among other cement stocks, India Cements, ACC, Ambuja Cements, Jaiprakash Associates and UltraTech Cements gained by between 0.78% to 1.72%. Shares of the other Reliance Anil Dhirubhai Ambani (ADA) Group firms edged higher on RCom's strong Q4 results. Reliance Broadcast Network, Reliance Capital, Reliance MediaWorks and Reliance Power gained by between 0.01% to 1.08%. Reliance Communications (RCom) rose 2.67% after the company announced on Saturday, 26 May 2012, its consolidated net profit jumped 97.6% to Rs 332 crore on 32.8% fall in total income to Rs 5311 crore in Q4 March 2012 over Q4 March 2011. Reliance Infrastructure rose 2.2%, with the stock extending Friday's gains triggered by strong revenue visibility for the company's EPC business. The company's EPC order book stood at Rs 17280 crore as on 31 March 2012, 1.56 times its EPC revenue of Rs 11048 crore for the year ended 31 March 2012 (FY 2012). During market hours on Friday, 25 May 2012, the company reported 0.14% growth in consolidated net profit to Rs 411.46 crore on 89.90% growth in total income to Rs 7136.31 crore in Q4 March 2012 over Q4 March 2011. Coal India rose 0.57%. The company announced after market hours today its consolidated net profit fell 4.91% to Rs 4013.41 crore on 31.91% growth in total income to Rs 21746.94 crore in Q4 March 2012 over Q4 March 2011. Net profit jumped 36.07% Rs 14788.20 crore on 26.95% growth total income to Rs 69952.33 crore in the year ended March 2012 over the year ended March 2011. NHPC gained 0.8%. The company's net profit rose 25.63% to Rs 802.07 crore on 30.7% growth in total income to Rs 1738.01 crore in Q4 March 2012 over Q4 March 2011. The company announced the results after market hours on Friday. Neyveli Lignite Corporation rose 0.38%. The company said after market hours today that net profit rose 3.19% to Rs 605.21 crore on 30.63% growth in total income to Rs 1823.87 crore in Q4 March 2012 over Q4 March 2011. Cals Refineries clocked highest volume of 90.17 lakh shares on BSE. Birla Cotsyn (57.89 lakh shares), Shree Ashtavinayak Cine Vision (50.77 lakh shares), Suzlon Energy (45.50 lakh shares) and Lanco Infratech (44.86 lakh shares) were the other volume toppers in that order. SBI clocked highest turnover of Rs 159.09 crore on BSE. Wockhardt (Rs 68.93 crore), Jubilant Foodworks (Rs 44.80 crore), RIL (Rs 36.43 crore) and Shalimar Paints (Rs 32.14 crore) were the other turnover toppers in that order. The Q4 March 2012 earnings season is drawing towards a close. Investor focus is on the guidance provided by the management for the year ending March 2013 (FY 2013) to gauge the earnings outlook. Tata Motors, ONGC, Steel Authority of India and Power Grid Corporation of India announce FY 2012 results tomorrow, 29 May 2012. Sun Pharmaceuticals Industries announces Q4 results tomorrow, 29 May 2012. GAIL (India) and DLF unveil Q4 results on Wednesday, 30 May 2012. Mahindra & Mahindra (M&M) and Jaiprakash Associates unveil FY 2012 results on the same day. On macro front, the Q4 March 2012 gross domestic product (GDP) data due on Thursday, 31 May 2012, could provide cues on the Reserve Bank of India's likely policy stance at its mid-quarter policy review due on 18 June 2012. The Indian economy expanded 6.1% in the October-December quarter from a year earlier, the weakest pace of expansion in more than two years, hurt by slower growth in manufacturing output and a contraction in mining production. European stocks rose Monday after opinion polls in Greece showed a lead for a party favoring the country's economic bailout in upcoming elections and amid expectations for a policy stimulus in China to support growth. China is the world's second biggest economy after the US. Key benchmark indices in UK, France and Germany were up by 0.51% to 0.88%. Opinion polls showed on Saturday that the pro-bailout New Democracy party ahead of rivals in upcoming polls in Greece. The reports eased fears that Greece's exit from the euro-zone was imminent. Greek voters return to the polls on 17 June 2012 after the splintered results of a May 6 parliamentary election left no party able to put together a government. Meanwhile, Standard & Poor's cut the ratings on five Spanish banks on Friday and said it believes the country is entering a double-dip recession. Asian stocks rose in a choppy session on Monday after opinion polls in Greece showed a lead for a party favoring the country's economic bailout in upcoming elections and amid expectations for a policy stimulus in China to support growth. China is the world's second biggest economy after the US. Key benchmark indices in China, Hong Kong, Singapore, Taiwan, and Japan were up by 0.15% to 1.19%. Indonesia' Jakarta Composite fell 3.72%. The South Korean market was closed for a holiday. Chinese media reports on Monday suggested that the National Development and Reform Commission, China's top economic planner, has approved three large steel construction projects. The approvals follow Chinese Premier Wen Jiabao last week promised pro-growth policies. US markets remain closed on Monday, 28 May 2012, for the Memorial Day holiday.