IT shares rally in choppy market

The market staged a strong rebound in late trade to wipe-off losses and post modest gains for the day. Firm European markets, which opened after Indian markets and good response to Rural Electrification Corporation public issue helped the recovery.

Volatility on the bourses was high today. The market had slipped into the red in afternoon trade after opening on a strong note. A firm opening was due to strength in Asian markets. The market breadth was positive after turning negative in afternoon trade. 21 shares from the 30-member Sensex pack rose.

The 30-share BSE Sensex was up 117.08 points or 0.66% at 17,734.68. It slipped to a low of 17,482.31 in mid-afternoon trade. At the day’s low, the Sensex lost 135.29 points. Sensex had opened 265.42 points higher at 17,883.02 and rose further to touch a high of 17,887.21 in early trade. At the day’s high, the Sensex rose 269.61 points. The Sensex oscillated in a range of 404.90 points for the day.

At current 17,734.68, Sensex trades at a PE multiple of 16.90 to 17.73, based on projected FY 2009 EPS of Rs 1000-to-Rs 1050 for 30 Sensex companies.

The broader based S&P CNX Nifty gained 37.35 points or 0.72% at 5,191.80. Nifty February 2008 futures were at 5201, a premium of 9.20 points as compared to spot closing.

As per provisional data, foreign institutional investors (FIIs) purchased shares worth Rs 209.43 crore today, 21 February 2008. Domestic institutional investors (DIIs) were net sellers of shares worth Rs 140.68 crore today.

Software shares surged on fresh buying even as the Indian rupee bounced back after tumbling to a 5-month low against the dollar on Wednesday, 20 February 2008. Metal shares advanced tracking firm global metal prices. Banking shares settled lower

The IPO of Rural Electrification Corporation (REC) was subscribed 3.52 times by 16:00 IST on the third day of its issue today, 21 February 2008. The price band for the IPO is Rs 90 to Rs 105. The issue closes on 22 February 2008.

The market breadth was positive: on BSE 1,465 advanced as compared to 1,253 that declined. 71 shares remained unchanged.

The BSE Mid-Cap index was up 1.05% to 7,668.93, outperforming the Sensex. The BSE Small-Cap index gained 0.64% to 9,692.99, underperforming the Sensex.

The total turnover on BSE amounted to Rs 5383 crore as compared to Rs 5,458.94 crore yesterday, 20 February 2008

Turnover on NSE’s futures & options segment amounted to Rs 43409.74 crore as compared to Rs 43987.02 crore yesterday, 20 February 2008

Most sectoral indices on BSE edged higher. The BSE IT index (up 4.77% to 4,041.97), the BSE Consumer Durables index (up 2.58% to 4,882.06), the BSE Auto (up 0.89% at 4,801.06), the BSE Health Care index (up 1.48% at 3,735.11), the BSE TecK index (up 2.73% to 3,396.18), the BSE Metal index (up 3.83% to 16,439.38), outperformed the Sensex.

The BSE Capital Goods index (down 0.60% at 15,837.90), the BSE Bankex (down 1.23% at 10,478.94), the BSE PSU index (up 0.04% to 8,302.67), the BSE Realty index (up 0.30% at 9,738.77), the BSE Oil & Gas index (up 0.26% to 10,912.26), the BSE Power (up 0.14% to 3,629.40), the BSE FMCG index (up 0.60% at 2,236.92), underperformed the Sensex.

Software shares rallied on fresh buying. India’s fourth largest software services exporter Satyam Computer Services jumped 8.71% to Rs 459.30 on 26.33 lakh shares. It was the top gainer from Sensex pack.

Infosys Technologies (up 4.56% to Rs 1639.70), TCS (up 4.64% to Rs 925), and Wipro (up 5.76% to Rs 435), surged. Tata Consultancy Services during trading hours yesterday, 20 February 2008, said it has signed a multi year contract with Chrysler LLC to provide a comprehensive portfolio of information technology services.

The partially convertible rupee was at 39.93 per dollar, rising smartly from the previous close of 40.21/23. Indian IT firms derive a lion's share of revenue from exports and they had been hit hard in the last one year by rupee’s surge.

India’s largest private sector firm by market capitalization and oil refiner Reliance Industries (RIL) staged a sharp recovery from day’s low of Rs 2458.50. It ended 0.84% higher at Rs 2503 on 5 lakh shares. As per recent reports, the company is in advanced talks with the New York-based Vornado Realty Trust, one of the world’s top five real estate asset managers, to float a $1-billion plus fund.

Metal shares rallied. Hindalco Industries (up 7.53% to Rs 190), Tata Steel (up 4.87% to Rs 810.25), Sterlite Industries (up 2.23% to Rs 801.50), JSW Steel (up 2.49% to Rs 1140.50), and Steel Authority of India (up 6.32% to Rs 238.10), surged.

Hindustan Unilever (up 3.32% to Rs 221) Ambuja Cement (up 3.45% to Rs 120), edged higher from Sensex pack.

Bajaj Auto, the country’s second largest bike manufacturer in terms of sales, rose 2.76% to Rs 2404. The company on 19 February 2008 said the Bombay High Court has sanctioned a scheme of arrangement between the company, Bajaj Holdings & Investment and Bajaj Finserv and their respective shareholders and creditors. The stock garnered 14.89% in the past five days from Rs 2022.20 on 13 February 2008 to Rs 2339.50 on 20 February 2008.

India’s largest dedicated housing finance company in terms of revenue Housing Development Finance Company slipped 3.69% to Rs 2650. The stock had slipped to low of Rs 2603.05 in late trade. It was the top loser from Sensex pack.

Banking shares recovered some losses in late trade. State Bank of India (down 0.98% to Rs 2184, off day’s low of Rs 2127.10), ICICI Bank (down 1.76% to Rs 1146.25, off day’s low of Rs 1116) slipped.

India’s second largest private sector bank in terms of assets HDFC Bank rose 1.01% to Rs 1550, off day’s low of Rs 1496.10

Four public sector banks, led by State Bank of India (SBI), on Wednesday, announced cut in prime lending rates (PLR) by 0.25% to 0.50%, in a move that will make housing and auto loans cheaper.

India’s top small car maker in terms of sales, Maruti Suzuki India was down 0.35% to Rs 766. The company said on Wednesday, 20 February 2008 it has signed an agreement with Mundra Port And Special Economic Zone for a mega car terminal at Mundra, Kutch district, Gujarat

India’s largest private sector engineering company in terms of order book Larsen & Toubro declined 0.68% to Rs 3439 even as the company said it has bagged an order from Cairn India for laying crude oil insulated pipeline and gas pipeline from Barmer, Rajasthan to Salaya, Gujarat.

Bharat Heavy Electricals (down 1.19% to Rs 2099) and Grasim (down 0.59% to Rs 2820) were the other losers from Sensex pack.

Reliance Capital topped the turnover chart on BSE with a turnover of Rs 307 crore followed by Reliance Natural Resources (Rs 302.30 crore), Reliance Power (Rs 241 crore), Essar Oil (Rs 200.40 crore) and Reliance Energy (Rs 158.25 crore) in that order

Reliance Natural Resources led the volume chart with volumes of 2.25 crore shares followed by Centurion Bank of Punjab (1.58 crore shares), Ispat Industries (1.11 crore shares), Essar Oil (84.45 lakh shares) and Gujarat NRE Coke (83.15 lakh shares) in that order.

Among the mid-cap IT stocks, Polaris Software Labs (up 9.26% to Rs 100.90), Rolta India (up 8.18% to Rs 328.50), Hexaware Technologies (up 8.83% to Rs 78.30), MphasiS (up 4.75% to Rs 242.80), and NIIT Technologies (up 2.86% to Rs 133), advanced.

Construction stocks witnessed across the board rally on renewed buying. IVRCL Infrastructures (up 3% to Rs 468), Gayatri Projects (up 2.11% to Rs 512), Punj Lloyd (up 1.76% to Rs 377.60), Jaiprakash Associates (up 7% to Rs 260.20), Patel Engineering (up 5.10% to Rs 770), and Hindustan Construction Company (up 1.93% to Rs 166.05), surged.

Reliance Power gained 3.67% to Rs 423.20 on volumes of 57.38 lakh shares. The company said on Sunday, 17 February 2008, its board will meet on Sunday, 24 February 2008, to consider issue of bonus shares. The bonus shares will be issued to non-promoter shareholders to compensate the losses suffered by them when the company was listed last week. The stock has been consistently trading at a discount to IPO price of Rs 450, since its listing on 11 February 2008.

Centurion Bank of Punjab surged 15.85% to Rs 57.75 on huge volumes of 1.57 crore shares. The stock surged on reports it is in merger talks with HDFC Bank.

HCL Technologies gained 6.16% to Rs 285 after the company said on Wednesday, 20 February 2008, it has acquired US based Capital Stream Inc. The company made this announcement after trading hours on Wednesday, 20 February 2008.

Gujarat Gas company slipped 0.21% to Rs 315. It reported 112.9% jump in net profit to Rs 38.81 crore on 46.9% rise in net sales to Rs 344.46 crore in Q4 December 2007 over Q4 December 2006. The company announced the results after trading hours on Wednesday, 20 February 2008.

Welspun Gujarat Stahl Rohren rose 0.70% to Rs 470 on reports the company is planning to set up a 2 million tonnes per annum steel plant in Mundra, Gujarat, under its backward integration plan.

Asian and European stocks rose today as Wall Street steadied overnight, helped by strong quarterly earnings and the prospect of lower interest rates.

In Europe, the key benchmark indices in United Kingdom (up 1.21% to 5,964.80), Germany (up 0.75% to 6,951.53) and France (up 1.27% to 4,873.20), edged higher.

Japan's Nikkei (up 2.84% at 13,688.28), Taiwan's Taiwan Weighted index (up 2.43% at 8,085.53), Singapore's Straits Times index (up 0.94% at 3,055.53), Hong Kong's Hang Seng (up 0.14% at 23,623) and South Korea's Seoul Composite index (up 0.99% at 1,704.55) edged higher.

However China’s Shanghai Composite slipped 0.87% to 4,527.77

US Market witnessed a roller coaster ride but finally closed modestly higher on Wednesday, 20 February 2008, helped by strong quarterly earnings and the prospect of further cut in interest rates. The Dow Jones industrial average gained 90.04 points, or 0.73%, to 12,427.26. The S&P 500 index rose 11.25 points, or 0.83%, to 1,360.03, and the Nasdaq Composite index advanced 20.90 points, or 0.91%, to 2,327.10.

Back home, the 30-share BSE Sensex had slumped 458.06 points or 2.53% at 17,617.60 on Wednesday, 20 February 2008. The broader based S&P CNX Nifty was down 126.35 points or 2.39% at 5,154.45 on that day.

Crude oil rose marginally today, 21 February 2008 after surging to a record over $101 a barrel on a gush of hedge fund inflows and Organisation of Petroleum Exporting Countries (OPEC) supply concerns. The new front-month U.S. crude for April delivery rose 21 cents to $99.91. The expired March 2008 contract struck a record high of $101.32 on Wednesday, 20 February 2008. London Brent crude rose 3 cents to $98.45 a barrel