Sensex vaults 856 points in biggest ever singe day surge

The market spurted today after the market regulator Securities Exchange Board of India, after trading hours on Monday, 22 October 2007, provided partial breather with respect to proposed restrictions on use of participatory notes and said it would speed up regulatory clearance for foreigners keen to invest transparently.

Television media reports in mid-afternoon trade that the market regulator Securities & Exchange Board of India (Sebi) has cleared proposals allowing foreign individual investors to invest on Indian bourses aided the surge in the second half of the trading session. The minimum networth criteria for a foreign individual investor who intends to invest directly is set at $50 million, television reports suggest.

Index pivotals especially Reliance Industries were in strong demand on value buying after the recent fall. Short covering may also have propelled blue chips. Asian and European markets were trading firm today, 23 October 2007

The BSE 30-share Sensex posted its biggest ever-single day point gains, vaulting 855.51 points, or 4.86%, to 18,469.50, as per provisional close. It opened 296.31 points higher at 17,910.30 and kept on cruising ahead of buying intensified. It struck an intra-day high of 18,542.41 in late trade. The Sensex’s previous biggest single day point gain was on 9 October 2007, when it surged 788.85 points or 4.51% at 18,280.24.

The broader based S&P CNX Nifty was up 288.30 points, or 5.56%, to 5,472.30, as per provisional close.

After market hours on Monday, 22 October 2007, Securities & Exchange board of India (Sebi) Chairman, M Damodaran said that proprietary sub-accounts (through which FIIs handle participatory notes) wishing to apply for FII status must send Sebi their letter of intent within 24 hours indicating their intent. The application itself must be submitted within a week’s time. Although Sebi will go ahead with its proposed restrictions on FII investments through participatory notes, p-notes as instrument are here to stay, provided the anonymity behind them is lifted.

Damodaran further added that currently there is no limit to the number of sub-accounts that may register for FII status. As of now, Sebi is comfortable with the numbers, at present 3000-plus. The Sebi board meets on 25 October 2007 to finalise the proposals. The Sebi chief said an expert panel is working on PNs based on derivatives and that its recommendations along with FII registration norms, would be announced after Sebi's 25 October 2007 board meeting.

After trading hours on Tuesday, 16 October 2007, Sebi issued draft proposals wherein the market regulator proposed restriction on use of the popular participatory notes (PNs) route of FII inflow and it also recommended unwinding of some PNs within 18 months. PNs are financial instruments used by foreign investors that are not registered with Sebi, to invest in Indian shares. FIIs and their sub-accounts buy Indian securities and then issue PNs to foreign investors with these securities as the underlying.

The Sebi chairman will meet domestic brokerage houses at 16:00 IST today, 23 October 2007 to clarify the regulator's position on participatory notes and discuss developments in the equity markets.

Among the 30-member Sensex pack, 26 advanced while only 4 of them slipped. The market breadth was strong on BSE: 2057 scrips advanced as compared to 657 that declined while 54 remained unchanged.

The total turnover on BSE amounted to Rs 7390 crore as compared to Rs 5564 crore by 14:30 IST.

India's largest private sector entity by market capitalisation and oil refiner Reliance Industries (RIL) galloped 7.52% to Rs 2595 on 11.59 lakh shares. As a part of a restructuring exercise, RIL has reportedly decided to hive off Reliance Fresh into a separate company, Ranger Farm, for single point accountability. Reliance Fresh sells food, fruits and vegetables and consumer products.

Battered Reliance Energy and Bharti Airtel made a strong comeback. Reliance Energy, the country’s second largest power utility company in terms of sales surged 12.28% to Rs 1538.25 on 26.78 lakh shares. The stock gained on value buying after it had plunged 28.06% to Rs 1370 in past one week to 22 October 2007. It was the top gainer from Sensex pack.

India’s largest listed cellular services provider by sales, Bharti Airtel gained 7.08% to Rs 993. The stock had slipped 16.41% to Rs 927.65 in the past one week to 22 October 2007, hit by on concerns that the launch of nationwide GSM services by rival Reliance Communications would eat into its market share.

Meanwhile Reliance Communications rose 4.80% to Rs 755. On Friday, 19 October 2007, it got nod to launch nationwide GSM-based cellular services from Department of Telecom (DoT).

Capital Goods shares dominated gainers on fresh buying, in anticipation of strong set of Q2 September 2007 results from them. India’s largest engineering company by sales, Bharat Heavy Electricals (Bhel) jumped 11.82% to Rs 2300. Bhel said on Monday, 22 October 2007, that due to some unavoidable circumstances, the meeting of its board of directors to consider Q2 September 2007 results, scheduled to be held on 25 October 2007 has been postponed to 29 October 2007.

Larsen & Toubro (L&T), the nation's largest engineering and construction company by sales, surged 7.69% to Rs 3336. On 18 October 2007, L&T said it won four orders worth Rs 452 crore for projects in Andhra Pradesh

NTPC (up 9.36% to Rs 218.40), Hindustan unilever (up 4.15% to Rs 215), Cipla (up 7.30% to Rs 193.40), and Tata Steel (up 6.97% to Rs 895.70), were the other gainers from Sensex pack.

Banking heavyweights ICICI Bank (up 3.36% to Rs 1098), HDFC Bank (up 6.75% to Rs 1465), and State Bank of India (up 5.27% to Rs 1803), also rallied

IT pivotals underperformed the market. India’s top software services exporter TCS lost 0.98% to Rs 1063.90 on 4.49 lakh shares. It was the top loser from Sensex pack.

Infosys (down 0.38% to Rs 1879.55), and Wipro (down 0.56% to Rs 492) underperformed the market. The Indian rupee firmed against the dollar. It was hovering at 39.64, as compared to yesterday’s (22 October 2007) close of 39.88.

India’s fourth largest software services exporter Satyam Computer Services gained 3.49% to Rs 464.10 after hitting day’s high of Rs 469. Its net profit rose 7.19% to Rs 417.15 crore on 10.75% rise in sales to Rs 1948.24 crore in Q2 September 2007 over Q1 June 2006. The company declared the results before market hours today, 23 October 2007. The company revised upwards earnings as well revenue guidance for FY 2008 (year ending 31 March 2008), both in rupee terms and dollar terms.

Satyam Computer Services signed an agreement with Fujitsu Services to provide IT services to Reuters as part of a 10-year, $1 billion internal information systems transformation programme. It also announced that entering into a definitive agreement to acquire 100% stake in Nitor Global Solutions ("NITOR") of the UK, a niche consulting firm providing Infrastructure Management Services (IMS), for up to British pound (GBP) 2.76 million ($ 5.5 million) in cash.

Among side counters, LIC Housing Finance (up 20.50% to Rs 272.50), Bank of India (up 23.79% to Rs 318.70), Hercules Hoists (up 20% to Rs 4318.85), Reliance Capital (up 15.84% to Rs 1768.15), and Mercator Lines (up 15.83% to Rs 98.40), surged

Meanwhile, under pressure from the Left parties to make clear whether the Indo-US nuclear deal is on or off, government on Monday, 22 October 2007, after market hours said the operationalisation of the deal will take place in accordance with the UPA-Left committee's findings. External Affairs Minister Pranab Mukherjee made this clear after a meeting between leaders of the Left parties and the UPA coalition formed to go into the concerns of the allies on the nuclear deal. The committee would meet again on 16 November 2007.

European markets were trading higher today, 22 October 2007. Key benchmark indices in United Kingdom (up 1.05% to 6,527), France (up 0.64% to 5,697.75) and Germany (up 0.43% to 7,828.74) moved up.

Asian markets were higher today, 23 October 2007. Hang Seng (up 3.54% at 29,376.86), Taiwan's Taiwan Weighted (up 1.51% at 9,501.89), Nikkei (up 0.07% at 16,450.58), South Korea's Seoul Composite (up 2.32% at 1,947.98) and Singapore's Straits Times (up 1.45% at 3,695.98) edged higher.

US markets ended higher yesterday, 22 October 2007, as investors overcame some of their nervousness about the credit markets and uneven earnings and found solace in the technology sector. The Dow Jones Industrial Average gained 44.95 points, or 0.33%, to 13,566.97. The S&P 500 index rose 5.70 points, or 0.38%, to 1,506.33, while the technology-dominated Nasdaq Composite Index rose 28.77 points, or 1.06%, to 2,753.93.

Volatility is expected to remain high in the coming few days ahead of expiry of October 2007 derivatives contracts on Thursday, 25 October 2007. As per reports, marketwide rollover of derivatives positions from October 2007 series to November 2007 series stood at 24% while that of Nifty was 35%.

Crude oil prices fell on Tuesday, 23 October 2007, extending a sell-off from record highs on concerns about the state of the US economy. US light crude for December 2007 delivery fell 26 cents to $85.76 a barrel. Oil has retraced over $4 since hitting a record-high of $90.07 on Friday, 19 October 2007. London Brent crude fell 36 cents to $82.91 a barrel.

As per provisional data, foreign institutional investors (FIIs) sold shares worth a net Rs 1290.86 crore, while domestic institutional investors (DIIs) were net sellers of shares worth Rs 15.33 crore on Monday, 22 October 2007.

On Monday, 22 October 2007, the BSE 30-share Sensex rose 54.01 points or 0.31% at 17,613.99. However, the broader based S&P CNX Nifty lost 31.30 points or 0.60% at 5,184