Market ends higher

BSE Sensex pared gains after it hit a record high in mid-afternoon trade. The market had recovered in the mid-morning trade from an initial slump. Reliance Industries edged higher. IT, healthcare and metal stocks declined. Realty, banking and FMCG stocks rose. The market breadth was strong.

European markets which opened after Indian market were trading firm. Asian markets which opened before Indian market were trading weak. US stocks tumbled on Friday, 4 January 2008, as a sharp rise in US unemployment rate in December 2007, heightened fears the US economy is heading into a recession.

The 30-share BSE Sensex provisionally rose 112.51 points or 0.54% to 20,799.40. Sensex hit all-time high of 20,861.83 in mid-afternoon trade. At day's high, Sensex gained 174.94 points. Sensex had hit a low of 20,438.19 at the onset of the trading session. At day's low, Sensex had declined 248 points.

The broader CNX S&P Nifty provisionally inched up 6 points or 0.1% to 6,280.30.

The BSE Mid-Cap index was down 0.16% to 10,097.12 and it underperformed Sensex. The BSE Small-Cap index was up 0.57% to 13,963.11 and it outperformed Sensex.

BSE clocked a turnover of Rs 10,661 crore compared to Friday (4 January 2008)'s Rs 11,039.61 crore.

The market breadth was strong on BSE with 1569 shares advancing as compared to 1336 that declined. 24 remained unchanged. 19 out of 30 shares from the Sensex pack were in the red.

India’s largest private sector firm by market capitalization and oil refiner Reliance Industries rose 0.91% to Rs 3,013.

Reliance Energy rose 1.26% to Rs 2,542 on reports Reliance Power, in which it holds 50% stake, is reportedly planning to tap the inorganic route and explore possibilities of taking over existing government power projects, including Ratnagiri Gas and Power plant at Dabhol, to scale up its generation capacity.

IT stock slipped as weaker-than-expected job growth in United States in December 2007 sparked worries that the US economy may head towards recession. Infosys (down 3.23% to Rs 1,640), Wipro (down 2.79% to Rs 483), Tata Consultancy Services (down 2.9% to Rs 976), Indian IT companies derive more than half of their revenues from the US market.

India’s fourth largest software service provider by sales Satyam Computer Services declined 1.97% to Rs 413.95. Satyam today said it had entered into a tie-up with Greenplum, a leading provider of database software for business intelligence, to combine Satyam's reach and expertise in delivering business intelligence (BI) solutions with Greenplum's innovative database software.

Healthcare stocks declined. Ranbaxy Laboratories (down 1.29% to Rs 420), Cipla (down 0.56% to Rs 211.50) and Dr. Reddy’s Laboratories (down 1.73% to Rs 716) edged lower.

Metal stocks also drifted lower. Tata Steel (down 0.28% to Rs 927.50), Steel Authority of India (down 1.15% to Rs 271), Hindalco Industries (down 1.89% to Rs 217.15) edged lower. National Aluminium Company rose 2.56% to Rs 532.10 andSterlite Industries rose 1.02% to Rs 1,070.30.

Realty stocks gained. Indiabulls Real Estate (up 6.45% to Rs 815.65), DLF (up 2.09% to Rs 1,135.75), Unitech (up 2.54% to Rs 534.10) edged higher.

Parsvnath Developers surged 8.52% to Rs 574.20 after the company said during the market hours it had bagged a Rs 90 crore contract to build Sai Ashram at Shirdi.

Banking stocks rose. ICICI Bank (up 6.11% to Rs 1,363.90) and State Bank of India (up 0.51% to Rs 2,402.95) edged higher. India’s second largest private sector bank in terms of net profit HDFC Bank declined 2.38% to Rs 1,657.

As per reports, the mandatory licensing requirement for Indian banks to open branches may be done away with. The department of financial services is taking up the matter with the Reserve Bank of India (RBI) as banks are no more shying away from opening branches in semi-urban and rural areas.

FMCG stocks rose. ITC (up 5.26% to Rs 231.10), Nestle India (up 3.14% to Rs 1,506), REI Agro (up 5% to Rs 940.35), Hindustan Unilever (up 2.55% to Rs 237.25) edged higher.

India's second biggest listed telecommunication services provider by sales Reliance Communications rose 3.95% to Rs 790.05.

India’s largest oil exploration firm by revenue ONGC declined 3.26% to Rs 1,299.95.

India's largest engineering & construction firm in terms of revenue, Larsen & Toubro Ltd (L&T) rose 0.78% to Rs 4,277.65 on securing two major contracts from Cairn India for the construction of civil works and the consolidated construction works of Cairn's project located near Barmer in Rajasthan.

European markes opened firm. Germany’s DAX (up 0.12% to 7,817.87) and UK’s FTSE 100 (up 0.08% to 6,353.60) edged higher.

In Asia, key benchmark indices in Hong Kong, Japan, South Korea, Singapore and Taiwan were down by between 1.24% to 4.11%. However, China's Shanghai Composite index was up 0.59%.

US stocks tumbled on Friday, 4 January 2008, dragging the Dow Jones Industrial Average to its worst three-day start to a year since the Great Depression, due to fears the economy was heading into a recession. The Dow Jones industrial average lost 256.54 points, or 1.96%, at 12,800.18. The Standard & Poor's 500 Index lost 35.53 points, or 2.46%, at 1,411.63. The Nasdaq Composite Index tumbled 98.03 points, or 3.77%, at 2,504.65.

A US recession may not impact India’s economic growth in a big way given that domestic demand is a key driver of the Indian economy. India's economy is expected to post strong growth for a long period due to favourable demographics. Economists also reckon that a healthy investment cycle will continue to support growth through a self-perpetuating cycle of income creation, savings and investment.

Though the Indian economy may be relatively insulated from the US recession, any risk aversion globally causing setback in global markets, may cast its shadow on the Indian bourses. However, with expectations of good Q3 December 2007 results from the corporate sector, any sharp fall may attract buying.