Third straight day of gains

The markets advanced for the third straight day, backed by firm buying interest for shares from metal, banking and cement sectors.

The 30-shares BSE Sensex settled 69.31 points or 0.54% higher at 12856.08. It opened slightly higher at 12791.60, but immediately began declining until it touched a low of 12,711.50 in opening session itself. However it kept on advancing from this level, as buying emerged, to hit a high of 12899.31. With today’s gains, the market posted gains for the third straight day.

The S&P CNX Nifty closed with a gain of 18.75 points (0.50%), at 3,752. The Nifty April 2007 futures settled at 3,711, a sharp discount of 41 points over the spot closing.

As per provisional data, FIIs were net sellers to the tune of Rs 85.80 crore today.

The BSE cash turnover amounted to Rs 3173.79 crore. Total market wide turnover was at Rs 35074.25 crore. The NSE cash turnover was at Rs 6939.06 crore while the NSE F&O turnover was at Rs 24961.4 crore.

Market breadth was positive on BSE, with over 1.5 gainers for every loser. 1628 shares advanced as compared to 901 that declined, while 71 remained unchanged. The BSE Mid-Cap Index ended at 5,319.95, up 39.88 points or 0.76% while the BSE Small-Cap Index surged 69.89 points or 1.1% to 6,456.37

Among the Sensex pack, 19 advanced while the rest declined.

Tata Steel was the top gainer, up 5.75 % to Rs 463.40 on high volumes of 24.79 lakh shares. Steel companies have reportedly hiked product prices. Late on Monday (2 April), Tata Steel said it had completed its $11.3 billion acquisition of European steel maker Corus Group PLC, a takeover that makes the Indian company the world's fifth-largest steel producer. Tata Steel’s crude steel production for the year 2006-07, crossed 5 million tonnes. The production of hot metal touched 5.55 million tonnes, crude steel at 5.05 million tonnes and saleable steel at 4.93 million tonnes.

Led by Tata Steel, the BSE Metal Index surged 3.1% to 8,623.65, and was the top gainer among the BSE sectoral indices. JSW Steel (up 4.45%), Hindustan Zinc (up 4.95%) and Jindal Steel & Power (up 3.61%), moved higher.

HDFC (up 2.20% to Rs 1529.90), ICICI Bank (up 2.02% to Rs 837.10) and REL (up 2% to Rs 497.10) were the other gainers.

Index heavyweight RIL was down 0.60% to Rs 1355 on 3.50 lakh shares. It moved in a range of Rs 1368.90 –1353.10

State run oil exploration major Oil and Natural Gas Corporation (ONGC) rose 0.10% to Rs 848 after reports that it has entered into service contracts for development of 14 onshore marginal fields with M/s Hydrocarbon Resources Development, M/s Deep Industries, M/s B G Shirke Construction Technology, M/s KEI - RSOS Maritime and M/s Shiv Vani Oil and Gas Exploration. By this process, ONGC has initiated action to put about 96% reserves of marginal fields on production in the XI plan period.

Simultaneously, ONGC is continuing its efforts to develop the new and marginal fields through in-house efforts, both in offshore and onshore, and large number of fields have been put on production / are in the process of being developed and put on production.

Also it plans to set up a new 15 million tonnes per year refinery on the east coast at a cost of 200 billion rupees ($4.65 billion), its chairman said on Thursday.

Dr Reddy’s was the top loser, down 2.43% to Rs 727.50 on 72,319 shares

Hero Honda declined 1.69% to Rs 633 while Bharti Airtel lost 1.15% to Rs 739

State-run power generation firm NTPC was down 1.52% to Rs 158.50 on 28.90 lakh shares, recorded a net profit of Rs 6,726.4 crore in 2006-07 as against Rs 5,820.2 crore in the previous fiscal, translating into an increase of 15.57%. Net sales during the period under review rose 17.20% to Rs 30,638.7 crore compared to Rs 26,142.9 crore in 2005-06. Gross revenue increased 15.81% to Rs 33,299.7 crore in 2006-07 from Rs 28,753 crore in 2005-06.

The company generated 188.67 Billion Units (BUs) of power during the year, showing an increase of 10.41% over the previous year's generation.

With a share of 20.18% in the total installed capacity of the country, NTPC generated 28.50% electricity during 2006-07. Capital expenditure in 2006-07 on various capital schemes increased to Rs 7,820.5 crore as against Rs 7,018.9 crore in the previous year. The company has earmarked capex plans amounting to Rs 12,792 crore for 2007-08.

Meanwhile, shares from cement sector advanced after declining on Wednesday, as buying resumed at lower levels. The fall came after the government announced cut in import duties. Analysts opine that imports would not be feasible due to high transport costs and lack of infrastructure at the port to handle bulk cement.

Grasim Industries (up 2.10% to Rs 2,106), Gujarat Ambuja Cements (up 1.10% to Rs 106.10), ACC (up 1.06% to Rs 722), and UltraTech Cement Company (up 2.26% to Rs 693) advanced.

Bank shares witnessed a broad-based rally today, with the BSE Bankex gaining 1.9% to 6,371.69. State run Union Bank of India gained 6.3% to Rs 102.70. Oriental Bank of Commerce rose 5% to Rs 186.25. Bank shares rose after the latest data showed slight cooling in inflation.

Shares of offshore and onshore exploration services advanced for the second straight day, on expectations of winning orders from exploration firms. Dolphin Offshore (up 6% to Rs 200), Jindal Drilling (up 2.10% to Rs 500), Deep Industries (up 3.11% to Rs 53.10) and South East Asia Marine Engineering & Construction which rose 5% to Rs 194.45.

IFCI jumped nearly 10% to Rs 34.90 after the term lending institution said late on Wednesday that it had received large part of proceeds of sales of its 7% stake in NSE in January 2007. The scrip jumped on heavy volume of 4.24 crore shares on BSE.

Gujarat Ambuja Exports surged 14.62% to Rs 29.80 after the company today issued a public announcement regarding its proposed buy-back programme. The company said it has set aside Rs 26.25 crore for buy-back of its shares through the open market purchases route. The maximum price at which it will buy-back its own shares is set at Rs 38. The buy-back will begin on 16 April 2007.

Bulk drug manufacturer Lupin advanced 2.11% to Rs 630 after it finalised a patent sale agreement with Servier. As per the agreement, Lupin has received Euro 20 million from Laboratories Servier of France for the sale of certain patent applications and other related Intellectual Property for Perindopril for multiple countries.

Television broadcaster Sun TV rose 2.72% to Rs 1540 after the company’s board today approved a 2-for-1 stock split. As a result, the face value of the scrip will become Rs 5 from Rs 10.

Utility vehicle and tractor maker, Mahindra & Mahindra rose 0.21% to Rs 715 on reports that it is open to more alliances, but will avoid tying up with too many partners. Mahindra, which has forayed into cars with a joint venture with France's Renault , also has an alliance with Renault and Nissan Motor Co for a greenfield project in southern India to make 400,000 vehicles in seven years.

Shoppers Stop plunged 4.45% to Rs 590. The retailer said its joint venture with Germany's Nuance Group AG had won a contract to operate retail business at the upcoming Hyderabad international airport. The joint venture is expected to have revenues of $240 million in seven years.

An important set of data that analysts was unleveled. India's wholesale price index rose 6.39% in the 12 months to 24 March, lower than the previous week's increase of 6.46%, data showed on Thursday. The figure was slightly above a forecast of 6.29% in an analyst poll.

Meanwhile annual inflation for the week ended 27 January was revised to 6.69% from 6.58%. Annual inflation stood at 4.06% in the corresponding week a year ago.

The Nikkei share average slipped 0.30% on Thursday following a two-day rise, with Fast Retailing Co. Ltd. and other recent gainers dropping and lower oil prices weighing on energy stocks such as Nippon Oil Corp. The Nikkei fell 52.67 points to 17,491.42. The benchmark had booked more than 500 points in the last two sessions and saw its highest close since 28 February on Wednesday.

Hong Kong’s Hang Seng index finished 1.03% or 207.01 points higher at 20209.71

Markets will remain closed on Friday (6 April 2007) on account of Good Friday. Low volumes indicate that many market participants are on the sidelines.

The undercurrent remains cautious on concerns that economic growth will slowdown following RBI’s rate hike campaign. With inflation a percentage point above the central bank’s forecast, RBI late last week unexpectedly raised cash reserve ratio along with hike in short term interest rate.

Infosys’ FY 2008, which it will unveil along with Q4 March 2007 results, on 13 April 2007, is the next major trigger for the market. In a recent pre-guidance report on Infosys, Merrill Lynch placed a short-term 'sell' on the Sensex heavyweight, expecting a conservative guidance from the company due to an uncertain US economic outlook, the appreciation of the rupee versus the dollar and other client-specific issues. Merill Lynch expects Infosys to give an EPS growth guidance in the early 20s.

US stocks managed slim gains Wednesday, following the previous session's big rally, as investors eyed lower oil prices and weaker than expected economic reports The Dow Jones industrial average (up 19.75 to 12,530.05) and the broader S&P 500 (up 1.60 to 1,439.37) index both added a few points. The Nasdaq composite added 0.3 percent.

US light crude oil for May delivery fell 26 cents to settle at $64.38 a barrel on the New York Mercantile Exchange on Wednesday after Iran's president pardoned and pledged to release the 15 British sailors and marines being held. Concerns about the standoff between the two nations had driven up the price of oil over the past week. Iran is the No. 4 oil exporter.

Meanwhile, China's central bank said on Thursday that it would raise the amount that lenders must hold in reserve for the sixth time in 10 months time since last June, in an aim to further control liquidity and curb lending. The 0.5% point increase in the reserve requirement ratio would take effect 16 April, the People's Bank of China added.

India's infrastructure sector output grew 7.2% in February from a year earlier, slower than revised 8.2% growth in January, government data showed on Thursday. Output rose an annual 9.1% in February 2006. Infrastructure output in the April-February period rose 8.3% from a year earlier.

The Union trade minister Kamal Nath is scheduled to announce the annual foreign trade policy some time this month. India's export of services is expected to touch $310.9 billion by 2011/12, powered by the booming software, consultancy, engineering and tourism sectors, showed a report. Services exports could even surpass merchandise exports, which are expected to more than double to $305.5 billion in the next five years, said the survey conducted by the Federation of Indian Chambers of Commerce and Industry (FICCI).

India exported goods worth $112.4 billion during 2005/06 while export of services was $71.6 billion. Services exports are estimated at $91.5 billion this fiscal, and merchandise exports at $132.7 billion.

India's service exports grew at 28% annually for the last five years, faster than the 22% growth in goods exports during the same period.

"With the current rate of growth in services to continue in the medium term, India's exports of services will be close to $311 billion by 2012, overtaking the expected level of merchandise exports of $305.5 billion by that year," said the FICCI survey.

During the first nine months of 2006/07, a buoyant service exports helped India cut current account deficit to $3 billion from $4.8 billion during April-Dec. 2005, the survey said citing government figures.

Software services was the highest foreign exchange earner at $21.8 billion during April-December 2006, followed by business and management consultancy at $16.5 billion and travel services at $6.4 billion, it said.