Market registers marginal gains

The key benchmark indices came off higher levels in late trade and ended almost flat due to selling in IT and banking counters. European markets which opened after Indian market, fell. The market had held firm for a better part of the day on firm Asian markets. Reliance Energy declined. Grasim Industries and Infosys were major losers from Sensex pack.

Capital goods stocks were in demand. The market breadth was positive

Asian markets, which opened before Indian markets, surged after weak US economic data and comments from a Federal Reserve official signalled that US interest rates will continue to head lower. Fed Vice Chairman Donald Kohn said on Tuesday that a weak US economy was a bigger worry than higher inflation risks.

The 30-share BSE Sensex rose 19.80 points or 0.11% at 17,825.99. Sensex touched a high of 18,137.28 in mid-morning trade. At day’s high, Sensex rose 331.09 points. Sensex hit a low of 17,770.65 in late trade. At the day's low, Sensex was down 35.54 points.

The broader CNX S&P Nifty ended down 1.65 points or 0.03% at 5,268.40.

BSE clocked a turnover of Rs 5859 crore today 27 February 2008 compared to a turnover of Rs 4,844.22 crore on Tuesday, 26 February 2008.

Nifty February 2008 futures were at 5241.05, at a discount of 27.35 points as compared to spot closing of 5268.40.

The NSE's futures & options (F&O) segment turnover was Rs 63,256.76 crore, which was higher than Rs 56,515.69 crore on Tuesday, 26 February 2008.

The next major trigger for the market is the Union Budget 2008-09. With general elections due in 2009, Union Budget 2008-09 to be presented on 29 February 2008 will be the last full-fledged budget of the Congress-led United Progressive Alliance government and it is therefore likely to be a populist budget. Thus, the Finance Minister (FM) is likely to provide higher allocations to several social initiatives like rural upliftment, employment, education, agricultural growth and public health.

Though populist measures will dominate the budget, FM is also expected to take steps to stimulate investment and consumption demand at a time when the economy is witnessing moderation from a solid growth last year. A reduction in personal income tax, if any, will result in increase in disposable incomes which in turn may boost demand for consumer goods.

Expectations are that the corporate income tax rate may be cut or the 10% surcharge on corporate tax may be abolished. The surcharge is 10% on a tax rate of 30%, making the effective corporate tax rate 33%. Another possibility is that of a cut in dividend distribution tax from 15% to 12.5%.

Meanwhile, FM may raise the Securities Transaction Tax (STT) slightly. STT is currently at 0.125% on delivery trades. STT is 0.025% on non-delivery trades on sell transactions. STT is 0.017 % in futures & options segment on sell trasactions.

It is also expected that the FM would announce some relief packages for troubled export sensitive sectors like textiles, rubber, jewelry, leather and IT services. These sectors have been hit by rupee’s surge in the past one year.

The BSE Mid-Cap index was up 0.43% at 7,723.56, while the BSE Small-Cap was up 0.26% at 9,673.86. Both these indices outperformed Sensex.

BSE Consumer Durables index (down 0.64% to 4,834.12), , BSE Metal index (down 0.95% to 16,642.01), BSE IT index (down 2.2% to 3,973.12), BSE Bankex (down 0.32% to 10,156.52), BSE Realty index (down 0.37% to 9,979.72) underperformed Sensex.

BSE PSU index (up 0.39% to 8,471.05), BSE Oil & Gas index (up 0.4% to 11,259.92), BSE Power index (up 0.73% to 3,733.77), BSE HealthCare index (up 1.22% to 3,860.02), BSE Captal Goods index (up 2.37% to 16,506.67) BSE Auto index (up 0.57% to 4,773.34), and BSE FMCG index (up 0.19% to 2,254.98) outperformed Sensex.

The market breadth was positive: on BSE 1,433 advanced as compared to 1,300 that declined. 41 stocks remained unchanged.

IT stocks declined in late trade. Satyam Computer Services (down 2.81% to Rs 437.10), Wipro (down 0.96% to Rs 439.90), Tata Consultancy Services (down 2.24% to Rs 877.70), Infosys (down 2.69% to Rs 1,617.40) edged lower.

Banking stocks fell in late trade. ICICI Bank (down 0.38% to Rs 1,113.75), HDFC Bank (down 0.22% to Rs 1,451.75) and State Bank of India (down 1.76% to Rs 2,082.55) edged lower.

India’s largest private sector firm by market capitalization and oil refiner Reliance Industries rose 0.46% at Rs 2,587.55. It came off from session's high of Rs 2,624. The company said on Tuesday, 26 January 2008 it had discovered more gas in an exploration block off India's east coast. This is the company's eight discovery in the block.

Among the top gainers from Sensex pack were Mahindra & Mahindra (up 4.52% to Rs 658.65), Housing Development Finance Corporation (HDFC) (up 4.27% to Rs 2,684.40) and Ranbaxy Laboratories (up 4.1% to Rs 436.35).

Among the Sensex losers from Sensex pack were ACC (down 2.24% to Rs 812.25), and Grasim Industries (down 5.06% to Rs 2,888.65).

India's second largest power utility firm by revenue Reliance Energy declined 3.88% to Rs 1,631.35. It came off from day's high of Rs 1,745. The company said yesterday its board will meet on 5 March 2008 to consider, buy back of equity shares of the company.

Capital goods stocks were in demand. Larsen & Toubro (up 3.2% to Rs 3,630.95), Bharat Heavy Electricals (up 3.78% to Rs 2,262.90) edged higher. However, Suzlon Energy declined 3.54% to Rs 303.70.

India’s largest truckmaker by sales Tata Motors rose 0.76% to Rs 707.45. Tata Motors and Ford reportedly plan to sign a memorandum of understanding possibly on 5 March 2008 for Tata Motors' possible acquisition of Ford's luxury British brands, Jaguar and Land Rover. The complete sale of Jaguar-Land Rover to Tatas will take 6-8 weeks.

Ispat Industries clocked highest volume of 2.05 crore shares on BSE. Tulsi Extrusions (1.86 crore shares), IRB Infrastructure Developers (1.53 crore shares), Reliance Natural Resources (1.2 crore shares) and Centurion Bank of Punjab (86.15 lakh shares) were the other volume toppers in that order.

Reliance Industries clocked highest turnover of Rs 364.71 crore on BSE. OnMobile Global (Rs 310.87 crore), IRB Infrastructure Developers (Rs 306.7 crore), Reliance Capital (Rs 262.46 crore) and Tulsi Extrusions (Rs 231.1 crore) were other turnover toppers in that order.

A per provisional data on NSE,foreign institutional invstor (FIIs) purchased shares worth Rs 350.45 crore today, 27 February 2008. Domestic funds bought shares worth Rs 341.35 crore.

European shares eased after results from British mortgage lender HBOS weighed on banks, although the decline was limited by a rally in crude oil that supported energy shares. France’s CAC 40, Germany’s DAX and UK’s FTSE 100 were down by between 0.33%-0.87%.

In Asia, the key benchmark indices in Hong Kong, China, Japan, South Korea, Singapore and Taiwan were up by between 0.69% to 2.7%.

US stocks rose for a third day on Tuesday as technology companies gained on IBM's plans to buy back $15 billion of its shares and the energy sector advanced on a record high close for oil in New York. The Dow Jones industrial average was up 114.70 points, or 0.91%, at 12,684.92. The Standard & Poor's 500 Index was up 9.49 points, or 0.69%, at 1,381.29. The Nasdaq Composite Index was up 17.51 points, or 0.75%, at 2,344.99.

On the New York Mercantile Exchange, April 2008 crude settled at a record $100.88 a barrel, up $1.65, on Tuesday.

On Tuesday, 26 Februray 2008, the market had extended Monday (25 February 2008)'s gains after Railway Minister Lalu Prasad Yadav provided thrust on modernising rail infrastructure in Railway Budget 2008-09 which he presented to parliament on that day. The 30-share BSE Sensex rose 155.62 points or 0.88% at 17,806.19. Keeping the common man in mind, the railway minister also cut passenger fares, with parliamentary elections due in 2009. Firm global markets also helped support domestic bourses.