The market posted impressive gains for the second consecutive day. Strong industrial production data for November 2006, firm Asian and US markets as well as short-covering in the derivatives segment took Sensex and Nifty to all-time highs. Banks spurted, and so did Reliance Industries and Bharti Airtel. IT pivotals extended Thursday’s gains. Cement and auto shares nudged higher.
The Sensex jumped 426 points (3.1%) to a lifetime closing high of 14,056.53. The barometer index hit a life high of 14,070.88 at 15:15 IST. The S&P CNX Nifty gained 110.20 points (2.8%), to a lifetime closing high of 4,052.45. Nifty struck an all-time peak of 4,059.15 in late-trading.
After a fall of about 500 points in first three trading sessions this week, due to large-scale FII sales, the benchmark index rose nearly 700 points in two trading sessions (on Thursday and Friday).
The earnings season has started upbeat with Infosys, HDFC Bank and UTI Bank unveiling strong numbers in the last two days. The major December 2006 quarter results scheduled next week are TCS, HCL Tech, Wipro, Bajaj Auto, Ranbaxy Laboratories and Satyam Computer.
The market-breadth was strong today. Against 1,607 shares rising on BSE, 1,071 declined. Just 46 stocks were unchanged. Gainers outpaced losers by a ratio of 1.5:1.
The BSE clocked a turnover of Rs 4585 crore, compared to Thursday’s Rs 4430 crore.
Banks spurted after the Union Cabinet, on Thursday, approved the change to a banking law, to give RBI more flexibility for lowering the statutory liquidity ratio requirement (SLR). The law mandates banks to keep a minimum of 25% funds with the central bank as their SLR requirement. A reduction in SLR, which the amendment to the law aims to do, will release more funds to banks for lending. With the growth in banks’ loan portfolios outstripping the growth in their deposit base, several banks have been selling their SLR holdings in excess of the 25% limit and are now close to the stipulated threshold.
ICICI Bank jumped nearly 8% to a lifetime closing high of Rs 965. State Bank of India jumped 6% to Rs 1222, HDFC Bank rose 6.8% to Rs 1067. HDFC Bank, on Thursday, reported a 31.7% growth in net profit to Rs 295.64 crore.
Housing finance major HDFC gained nearly 5% to Rs 1596.
Reliance Industries surged 3.6% to a lifetime closing high of Rs 1343. A newspaper today reported that Reliance Industries is exploring possibility of joining the bidding race for General Electric (GE)’s plastic business, valued at about $10 billion. GE is reportedly reviewing its plastic division’s future, which has been hit by rising costs of raw materials and natural gas. Meanwhile, promoter Mukesh Ambani, today said the company plans to invest Rs 67,000 crore ($15 billion) for a refinery, city gas distribution and for developing a port city in Gujarat.
Bharti Airtel jumped nearly 5% to Rs 667, on renewed buying on expectations of strong Q3 results.
PSU power equipment major Bhel rose nearly 5% to Rs 2260, boosted by strong industrial production data for November.
IT shares extended Thursday’s surge following a rise in their ADRs on Thursday. TCS jumped 4% to Rs 1330. TCS unveils Q3 results on 15 January. Eight brokerages expect between 4.4 - 13.9% sequential growth in TCS’ December 2006 quarter consolidated net profit as per US GAAP, between Rs 1035.30 crore and Rs 1128.80 crore, compared to a net profit of Rs 991.50 crore in September 2006 quarter. These eight brokerages expect between 6.2 - 8.2% sequential growth in TCS’ Q3 consolidated revenue as per US GAAP, between Rs 4759.30 crore and Rs 4848.90 crore.
Infosys was up 1.5% to Rs 2217, after its ADR rose 3.6% on Thursday to $56.22. Infosys’ Q3 results announced during trading hours on Thursday, were in line with estimates. The company’s operating margins rose on a sequential basis, despite a rise in the rupee against the US dollar. However, its Q4 guidance was muted.
Satyam Computer gained 2.4% to Rs 492, after its ADR gained 5.3% on Thursday to $24.26.
UTI Bank rose 3.9% to Rs 499.45. The private sector bank today reported 40.1% growth in net profit for December 2006 quarter to Rs 184.61 crore (Rs 131.71 crore). Net interest income rose 44.56% to Rs 415.84 crore (Rs 287.44 crore), while other income surged 61.3% to Rs 279.74 crore from Rs 173.42 crore in the corresponding quarter of the previous fiscal.
KEC International rose 13% to Rs 403, after it reported a 116% surge in net profit in December 2006 quarter at Rs 38.21 crore (Rs 17.67 crore). Net sales rose 25% to Rs 572.27 crore from Rs 457.53 crore.
IFCI jumped 5% to Rs 21.75, and the stock rose on a massive volume of 6.3 crore shares on BSE. The stock extended its recent solid surge after the company unlocked a part of its holding in NSE on Wednesday.
Steel Authority of India (SAIL) rose nearly 5% to Rs 90.55, after a block deal of 35.5 lakh shares was executed in the counter on BSE at Rs 88.60. Steel Minister Ram Vilas Paswan said Friday Sail will invest more than $20 billion to expand its annual output to 40 million tonnes by 2020 from 14 million tonnes now.
State-run oil refiners Indian Oil Corporation, BPCL, HPCL and IBP were up between 3.9% to 6.1% on falling crude prices.
Sugar companies Balrampur Chini Mills, Dhampur Sugar Mills and Bajaj Hindustan rose between 4 - 6.4% after the Central Government on Thursday lifted the ban on sugar exports.
Southern Iron & Steel jumped 13% to Rs 28.25, after it said its board will meet on 19 Jan 2006, to issue shares at a premium of Rs 52 each to financial institutions and banks against a term loan the company had availed.
Automotive Axles shed 0.5% to Rs 635. The company reported 38.6% growth in December 2006-quarter net profit to Rs 13.56 crore (Rs 9.78 crore). Net sales rose 47.2% to Rs 167.77 crore (Rs 113.96 crore).
Finolex Cables rose 4% to Rs 101.05, after a block deal of 7,48,441 shares on BSE at Rs 100 each.
Marico gained almost 5% to Rs 567.40, after its board approved a 10-for-1 stock split. The board also approved a financial restructuring through adjustment of intangible assets against special reserves.
Ispat Industries rose 4.4% to Rs 12.80. Ispat Industries said on Friday, it has entered into a preliminary agreement with the Jharkhand government to set up a 2.8 million tonne steel plant for Rs 6750 crore.
Industrial production rose 14.4% in November 2006 from a year earlier, far higher than market expectations due to a strong surge in manufacturing output, government data showed on Friday. Output growth for October 2006 was revised down to an annual 4.4%, from a previously reported 6.2%. Manufacturing production, which represents more than 75% of industrial output, rose 15.7% in November from a year earlier, compared with a provisional 6% annual growth in October.
Another data showed inflation rising at 5.58% in the 12 months to 30 Dec 2006, higher than previous week's annual rise of 5.48% due to a rise in food and fuel prices, data showed on Friday. The figures were slightly lower than estimated 5.6%
Asian exporters led Asian shares higher on Friday. Key benchmark indices in Hong Kong, Japan, South Korea, Singapore, and Taiwan were up between 1.1 - 1.8%.
US stocks mounted a broad advance on Thursday, as investors snapped up technology shares such as Microsoft Corp and optimism about the economy boosted industrial stocks, pushing the Dow to a record close. Dow rose 72.82 points, or 0.59%, at 12,514.98. The Standard & Poor's 500 Index was up 8.97 points, or 0.63%, at 1,423.82. The Nasdaq Composite Index was up 25.52 points, or 1.04%, at 2,484.85, and hit a six-year high
US crude futures edged above $52 a barrel on Friday. It had slumped to below $52 on Thursday, hitting a fresh 19-month low as selling by funds intensified.