Rally spills over to fifth consecutive trading session

The Indian stock market mirrored gains in global counterparts to posts decent rise, shrugging off a steep 50 basis points hike in cash reserve ratio (CRR) announced by the Reserve Bank of India late on Thursday, 17 April 2008. The market was closed on Friday, 18 April 2008, for a public holiday. With today’s gains, the market has now advanced for fifth straight day.

As per provisional data, foreign institutional investors (FIIs) today bought shares worth a net Rs 169.66 crore. Domestic funds purchased stocks worth a net Rs 111.58 crore.

Asian markets, which opened before Indian markets, surged on hopes the worst was over for the banking sector, following the top US lender Citigroup’s announcement of a quarterly loss of $5.1 billion and plans to cut another 9,000 jobs. Japan's Nikkei (up 1.63% at 13,697.69), Hong Kong's Hang Seng (up 2.17% at 24,721.67), Singapore's Straits Times (up 1.48% at 3,171.09), Shanghai Composite (up 0.72% to 3,116.97), South Korea's Seoul Composite (up 1.61% at 1,800.48) and Taiwan's Taiwan Weighted (up 0.10% at 9,083.12) advanced.

European markets, which opened after Indian markets, were trading lower. Key benchmark indices in France (down 0.71% to 4,926.50) and Germany (down 0.48% to 6,812.49) slipped. However United Kingdom’s FTSE 100 index was up 0.18% to 6,067.10.

The 30-share BSE Sensex was up 258.13 points or 1.57% at 16,739.33. It opened with an upward gap of 130 points at 16,611.41 and advanced further to hit a high of 16,778.59 in early trade. At the day’s high, the Sensex gained 279.39 points.

The BSE Sensex has now gained 1,044.23 points or 6.65% in five straight sessions from 15,695.10 on 10 April 2008

The broader based S&P CNX Nifty was up 78.60 points or 1.59% at 5,037. Nifty gained 95 points at an intra-day high of 5053.40. Nifty April 2008 futures were at 5045, a premium of 8 points as compared to spot closing.

Turnover in NSE’s futures & options segment amounted to Rs 40635.23 crore as compared to Rs 42461.28 crore on Thursday, 17 April 2008.

The market breadth was strong. Metal shares staged a strong comeback after the recent correction. Banking shares rose taking the hike in CRR in their stride. However IT pivotals retracted from day’s high hit in early trade on profit booking. They had logged handsome gains last week buoyed by encouraging guidance from IT bellwether Infosys Technoligies.

The market breadth was strong. On BSE, 2038 shares advanced as compared to 677 that declined. 56 remained unchanged. 20 from the 30-member Sensex pack advanced.

Most sectoral indices on BSE posted gains. The BSE Consumer Durables index (up 3.26% to 4,356.38), the BSE Bankex (up 3.43% at 8,580.72), the BSE Health Care index (up 1.87% at 4,161.27), the BSE Metal index (up 3.78% to 15,214.69), the BSE Capital Goods index (up 2.07% at 13,669.39), and the BSE PSU index (up 2.05% to 7,899.16), outperformed the Sensex.

The BSE IT index (down 1.03% to 4,108.14), the BSE Auto (up 0.85% at 4,548.08), the BSE TecK index (up 0.88% to 3,343.84), the BSE FMCG index (down 0.06% at 2,366.13), the BSE Oil & Gas index (up 0.93% to 11,516.98), the BSE Realty index (up 0.48% at 7,675.77), the BSE Power (up 1.14% to 3,281.29), underperformed the Sensex.

The BSE Mid-Cap index rose 2.15% to 6,983.26 and the BSE Small-Cap index advanced 2.60% to 8,752.83, as per provisional closing. Both these indices outperformed the Sensex

Shares from metal sector made a comeback after recent correction. India’s largest private sector steel manufacturer in terms of sales, Tata Steel galloped 8.72% to Rs 777.55 and was the top gainer from Sensex pack.

Hindalco Industries (up 2.95% to Rs 191.85), National Aluminium (up 3.09% to Rs 435.95), Jindal Steel & Power (up 5.07% to Rs 2,122.15), JSW Steel (up 2.85% to Rs 833.70), and Steel Authority of India (up 4.33% to Rs 178.40) gained.

India’s largest private sector company in terms of market capitalisation and oil refiner Reliance Industries (RIL) was up marginally by 0.04% to Rs 2,638. As per reports, RIL has formed a joint venture with Marks & Spencer Group Plc, the U.K.'s largest clothing retailer, to open at least 50 stores in India over the next five years. RIL will declare its quarterly results today.

IT pivotals cooled off after strong start. Infosys Technolgies, the country’s second largest software services exporter slipped 1.29% to Rs 1,645 and was the top loser from Sensex pack. Last week, IT bellwether Infosys said it saw significant growth opportunities in the medium to long term. It, however, may face short-term challenges due to global economic uncertainties

India’s third largest software services exporter Wipro was down 1.24% to Rs 453.50 after striking an intra-day high of Rs 481. The company on Friday, 18 April 2008, reported 3% growth in its net profit to Rs 880 crore on 7.5% growth in topline to Rs 5,700 crore in Q4 March 2008 over Q3 December 2007. With uncertainty in the business environment, the company is conservative about forecasts. For the first quarter of fiscal 2009, Wipro expects revenue from combined IT services to be $1,060 million.

Shares of India’s fourth largest IT services firm by sales Satyam Computer Services slipped from day’s high of Rs 488 and settled 2.53% lower at Rs 457.10. The company reported 17.84% rise in net profit to Rs 468.45 crore on growth in total income of 31.45% to Rs 2337.84 crore in Q4 March 2008 over Q4 March 2007

For FY 2009, under US GAAP, revenue is expected to rise between 24.0% to 26.0% to $2.65 billion and $ 2.69 billion in FY 2009 over FY 2008. Basic earning per American depository share (ADS) is expected to rise by 15.2% - 17.6% to $ 1.44 and $ 1.47, in FY 2009 over FY 2008, Satyam said.

TCS, the country’s top software services exporter slipped 0.98% to Rs 991.05. As per earnings preview of five prominent brokerages, IT giant Tata Consultancy Services (TCS) is seen reporting a between 3.1% fall to a 5.5% growth in its consolidated net profit as per US Generally Accepted Accounting Practices (GAAP) at between Rs 1290.10 crore to Rs 1403.60 crore in Q4 March 2008 over Q3 December 2007. The five brokerage expect a between 3.3% to 5.3% growth in revenue at between Rs 6117.90 crore to Rs 6237 crore in Q4 March 2008 over Q3 December 2007.

Analysts say the key things to watch out is future outlook on pricing and volume growth that the TCS management may give at the time of announcing the Q4 results. TCS unveils Q4 results today, 21 April 2008.

Banking shares surged in late trade despite hike in the cash reserve ratio. ICICI Bank (up 4.17% to Rs 870), State Bank of India (up 3.71% to Rs 1,745.30), and HDFC Bank (up 3.62% to Rs 1,447.00), edged higher.

The unscheduled CRR rate hike comes ahead of RBI's annual credit policy for 2008-09 to be unveiled on 29 April 2008. The RBI joined the government in battling the skyrocketing inflation. The wholesale price index rose 7.14% in the 12 months to 5 April 2008, as per latest data. This was slower than the previous week's annual rise of 7.41%.

CRR is the amount of money banks have to keep with RBI as a percentage of their liabilities (deposits). CRR hike will be introduced in two stages. In the first stage, RBI will raise CRR by 25 basis points to 7.75% on 26 April 2008. Another 25 basis point hike will come into effect from 10 May 2008. As a result of the increase in CRR, about Rs 18,500 crore of' banks resources would be taken out of the system.

India’s largest private sector engineering company in terms of outstanding order book position Larsen & Toubro gained 2.49% of Rs 2845 after the company said it plans to develop a commercial complex at Seawoods railway station, Navi Mumbai over 40 acres of land for Rs 3500 crore. The company made this announcement during trading hours today, 21 April 2008.

Bharti Airtel (up 3.25% to Rs 850), Jaiprakash Associates (up 7.32% to Rs 233.15), Ranbaxy Laboratories (up 4.21% to Rs 500) and Reliance Communications (up 5.69% to Rs 560.55), edged higher from the Sensex pack.

Mahindra & Mahindra (down 0.92% to Rs 633) and Bharat Heavy Electricals (down 0.18% to Rs 1,782) edged lower from Sensex pack.

Titagarh Wagons settled at Rs 707.20, a premium of 30.96% over its issue price of Rs 540. 53.47 lakh shares changed hands on the counter on BSE. It listed at Rs 550 on BSE, a 1.85% premium over its issue price.

Titagarh Wagons was the top traded counter on BSE with turnover of Rs 366.69 crore followed by Orchid Chemicals (Rs 289.56 crore), Reliance Industries (Rs 172.89 crore), Essar Oil (Rs 133.92 crore) and Reliance Capital (Rs 128.37 crore) in that order

Ispat Industries topped the volumes charts on BSE, clocking total volumes of 1.84 crore shares followed by Sita Shree Foods (1.32 crore shares), Orchid Chemicals (1.13 crore shares), Centurion Bank of Punjab (1.09 crore shares) and Tata Teleservices (Maharashtra) (1.08 crore shares) in that order.

Among side counters, Archies (up 20% to Rs 111.60), Revathi Equipments (up 19.97% to Rs 1248), Gati (up 19.96% to Rs 122), TVS Electronics (up 19.92% to Rs 43.35), and EL Forge (up 19.99% to Rs 71.55), surged.

However, Arvind Chemicals (down 10% to Rs 38.30), Orchid Chemicals (down 10.71% to Rs 249.40) and salora International (down 7.67% to Rs 166.20) slipped.

Garware Offshore Services surged 6.40% of Rs 270.30 after the company said it has secured a contract for upto three years for its new anchor handling tug cum supply vessel being delivered in Singapore in June 2008. The company made this announcement during trading hours today, 21 April 2008.

Axis Bank rose 6.83% to Rs 881.10 after bank’s net profit rose 70.56% to Rs 361.4 crore on 56.57% rise in total income to Rs 2571.9 crore in Q4 March 2008 over Q4 March 2007. The bank’s net profit rose 62.51% to Rs 1071.03 crore on 60.84% rise in total income to Rs 8800.8 crore in FY 2008 over FY 2007.

Biocon soared 12.8% of Rs 504.85 after the company said it has scheduled a board meet on 22 April 2008 to consider bonus issue. The company made this announcement during trading hours today, 21 April 2008.

India Infoline gained 1.93% of Rs 893.75 after the company said on 17 April 2008 it has scheduled a board meet on 26 April 2008 to consider stock split. The company made this announcement after trading hours on Thursday, 17 April 2008.

Suzlon Energy gained 2.08% of Rs 305.75 after the company said on 17 April 2008 its wholly owned subsidiary Suzlon Energy (Tianjin) has secured orders totaling nearly 200-megawatt of capacity for wind farm projects in China. The company made this announcement on Friday, 18 April 2008.

Dish TV India jumped 17.51% to Rs 64.90 after the company said its board will meet on 24 April 2008 to consider the proposal for raising funds through rights issue. The company made this announcement after market hours on Thursday, 17 April 2008.

Dabur Pharma jumped 6.22% of Rs 73.45 after the company said its promoters and other shareholders have agreed to sell 73.27% in the company to Singapore based Fresenius Kabi Pte for Rs 76.50 per share. Fresenius Kabi Pte is a unit of European based healthcare firm Fresenius SE, which makes anti-cancer drugs.

Shipping Corporation of India rose 9.64% to Rs 241.75 on reports the company may consider a bonus issue in the near future.

Sasken Communication Technology surged 32.62% to Rs 190.90 after its board approved a proposal for buyback of shares from open market at a price not exceeding Rs 260 per share for an aggregate amount of Rs 40 crore. The company made this announcement on Saturday, 19 April 2008.

Meanwhile short-selling, that is selling a stock that you do not own, and making profit when the price falls, will be allowed from today, 21 April 2008, following a new set of guidelines and procedures, for both institutional and retail investors. The new system provides for borrowing shares for a seven-day period and using them to settle the sale of shares within a T+2 (trading day + two days) deadline.

Initially, short-selling will be permitted only in 227 stocks that are also traded in the futures and options segment, where deals can be entered into for making transactions at a future date. Later, the stock exchanges may decide to extend short-selling to a larger universe of stocks.

US markets surged on Friday, 18 April 2008, as Citigroup, Google and Caterpillar posted results that topped analyst estimates. The Dow Jones rose up 1.81% to 12,849.36, the Nasdaq Composite index surged 2.61% to 2,402.97. The S&P 500 gained 24.77 points at 1,390.33.

India's monsoon rains are likely to be near normal this year, the Indian Meteorological Department (IMD) forecasted on Wednesday, 16 April 2008, promising robust harvests which could bolster growth in the country and soothe global food worries.

Meanwhile, as per reports, Reliance Money plans to launch an over-the-counter bullion trading platform along with the Bombay Stock Exchange (BSE) and the Bombay Bullion Association. The online trading platform, to be launched in a month, will allow trading in gold and silver by jewellers and retail investors. For the settlement of the trades, a separate company would be formed with Reliance Money, BSE, National Multi-Commodity Exchange, Bombay Bullion Association and IT People (India).