Sensex up 2,791 points from recent low

The market extended gains with the barometer index BSE Sensex surging 313 points, and finishing close to the day’s high. It held firm despite the latest data showing a rise in inflation to highest level in more than three years. Firm global markets supported domestic bourses.

Gains in banking, realty, IT, capital goods, and auto stocks powered today's rally on the bourses. Except BSE Metal index all the sectoral indices on BSE were trading in green. Metal stocks declined as global base metal prices retreated. The market breadth was positive.

European markets which opened after Indian market, were strong. Asian markets which opened before Indian market, were firm. US stocks rose on Thursday, 1 May 2008, as a rebound in the dollar and retreating oil prices calmed fears about inflation, renewing investors' appetite for riskier assets, including undervalued technology shares.

India's wholesale price index rose 7.57% in 12 months to 19 April 2008, accelerating from the previous week's annual rise of 7.33%, government data released today showed. The rate was the highest since a reading of 7.68% on 13 November 2004.

The 30-share BSE Sensex ended up 312.81 points or 1.81% at 17,600.12. The market had pared gains in mid-morning trade after a strong start ahead of the inflation data. It had surged in early trade on positive cues from global equities. Sensex hit a high of 17,621.24 in early trade, its highest level since 29 February 2008. At the day’s high, Sensex rose 333.93 points. Sensex was up 158.62 points at the day's low of 17,445.93 hit in mid-morning trade.

The broader based S&P CNX Nifty was up 62.3 points or 1.21% at 5,228.20. Nifty May 2008 futures were at 5253, at a premium of 24.80 points as compared to spot closing of 5228.20.

The BSE clocked a turnover of Rs 6549 crore today compared to a turnover of Rs 6909.57 crore on Wednesday, 30 April 2008. The market was closed on Thursday, 1 May 2008, for a public holiday.

The NSE's futures & options (F&O) segment turnover was Rs 36,304.41 crore, which was higher than Rs 33,950.04 crore on Wednesday, 30 April 2008.

The market breadth was positive with 1,400 shares advancing as compared to 1301 that declined on BSE. 67 remained unchanged.

As per the provisional figures on NSE, foreign institutional investors (FII)s bought shares worth Rs 658.34 crore today while domestic funds sold shares worth Rs 18 crore.

The BSE Mid-Cap index rose 1.38% to 7,237.47 and BSE Small-Cap index rose 0.55% to 8,821.71.

BSE Oil & Gas index (up 1.82% to 11,715.37), BSE Power index (up 1.92% to 3,402.99), BSE Capital Goods index (up 2.25% to 14,244.87), BSE IT index (up 2.27% to 4,358.58), BSE Realty index (up 2.51% to 8,718.69), BSE Auto index (up 2.86% to 4,861.15), BSE Bankex (up 3.66% to 9,142.18), outperformed Sensex.

BSE PSU index (up 1.13% to 8,173.01), BSE Consumer Durables index (up 0.57% to 4,568.85), BSE FMCG index (up 0.53% to 2,474.45), BSE HealthCare index (up 0.33% to 4,289.31), BSE Metal index (down 1.56% to 15,863.17) underperformed Sensex.

India’s largest private sector firm by market capitalisation and oil refiner Reliance Industries (RIL) rose 2.29% to Rs 2,674.85 after the company said it had signed an agreement to buy a 90% stake in an exploration block in Peru.

Banking stocks rose across the board despite surge in inflation. HDFC Bank (up rose 1.59% to Rs 1,538.95), ICICI Bank (up 6.38% to Rs 935.50) edged higher.

India’s largest commercial bank State Bank of India rose 2.58% to Rs 1,822.15. The bank today reported 26% rise in net profit to Rs 1883 crore in Q4 March 2008 over Q4 March 2007. The results hit the market at the fag end of the trading session.

Bank of India rose 5.27% to Rs 360.70 after it posted 70% rise in net profit to Rs 757 crore in Q4 March 2008 over Q4 March 2007.

Finance Minister (FM) P Chidambaram on Thursday, 1 May 2008, said state-run banks are unlikely to hike interest rates in the near future. FM said banks were quite happy that only the CRR (cash reserve ratio) has been raised by the Reserve Bank of India and policy rates have been untouched. RBI on Tuesday, 29 April 2008, hike CRR by 25 basis points to 8.25% in its annual monetary policy review.

Auto stock rose on strong monthly sales. India’s largest car maker by sales Maruti Suzuki India rose 6.21% to Rs 788. Maruti Suzuki India has recorded a 22.4% growth in domestic sales in April 2008 compared with April 2007. The company's exports grew 64.5% during the month compared with the year-ago period. In April Maruti Suzuki sold 59,539 units in the domestic market compared with 48,652 units in April 2007.

Bajaj Holdings rose 3.51% to Rs 734.10. Erstwhile Bajaj Auto reported a 23.60% growth in motorcycle sales during April 2008 at 2,03,081 units against 1,64,304 units in the same month last year. The company's total two-wheeler sales also rose 23.08% during the month at 2,03,930 units as compared to 1,65,692 units in April last year.

India’s largest motorbike maker by sales Hero Honda Motors declined 0.36% to Rs 847.65. Hero Honda Motors reported a 9.03% jump in motorcycle sales during April 2008 at 2,86,252 units against 2,62,544 units in the same month last year.

India’s largest tractor maker by sales Mahindra & Mahindra rose 2.98% to Rs 690.35 on reports the company is exploring buying stake in Pune-based two-wheeler maker Kinetic Motor. India’s largest truck maker by sales Tata Motors rose 3.68% to Rs 685.05.

Realty stocks rose. Housing Development and Infrastructure (up 9.59% to Rs 846), Indiabulls Real Estate (up 3.27% to Rs 565.65) and Unitech (up 2.5% to Rs 318.15) edged higher.

India’s largest real estate player by market capitalisation DLF rose 2.11% to Rs 720.15. DLF reported a net profit of Rs 638.55 crore on a sales of Rs 1613.32 crore in Q4 March 2008.

Capital goods stocks rose. Larsen & Toubro (up 4.58% to Rs 3,141.05), Bharat Heavy Electricals (up 0.65% to Rs 1,909.25), Suzlon Energy (up 0.63% to Rs 288.95) edged higher.

IT stocks rose. Wipro (up 2.78% to Rs 502.20), Tata Consultancy Services (up 2.31% to Rs 940.75), Satyam Computer services (up 2.47% to Rs 494.10) and Infosys (up 2.04% t o Rs 1,789.50) edged higher.

Metal stocks declined as global base metal prices retreated. Sterlite Industries (down 4.24% to Rs 825.60), Hindalco Industries (down 4% to Rs 185.85) and Tata Steel (down 2.52% to Rs 797) National aluminium Company (down 2.42% to Rs 438.40) and Steel Authority of India (down 1% to Rs 183.20) edged lower.

Jaiprakash Associates (up 5.77% to Rs 286.95), ONGC (up 0.56% to Rs 1,039.20), ITC (up 0.43% to Rs 220.75) edged higher from Sensex pack.

HDFC (down 1.11% to Rs 2,773.75), ACC (down 0.67% to Rs 753.55), Ambuja Cement (down 0.88% to Rs 112.90) edged lower from Sensex pack.

India’s largest telecom services provider by sales Reliance Communications declined 3.2% to Rs 561.20. Reliance Communications is reportedly looking to bid for South African telecom major MTN. Reliance Communications is talking to leading global banks to raise resources and be ready, in case MTN's management decides to invite bids, the reports added.

IFCI clocked the highest volume of 2.66 crore shares on BSE. Ispat Industries (1.4 crore shares), Reliance Natural Resources (1.13 crore shares), Kaashyap Technologies (73.28 lakh shares) and Idea Cellular (69.66 lakh shares) were the other volume toppers in that order.

Titagarh Wagons clocked the highest turnover of Rs 225.72 crore on BSE. Housing Development and Infrastructure (Rs 219.37 crore), Reliance Infrastructure (Rs 192.15 crore), Reliance Communications (Rs 186.63 crore) and Reliance Capital (Rs 176.91 crore) were the other turnover toppers in that order.

The Dow Jones industrial average shot up 189.87 points, or 1.48 percent, to 13,010 on Thursday, 1 May 2008. The Standard & Poor's 500 Index surged 23.75 points, or 1.71 percent, to 1,409.34. The Nasdaq Composite Index climbed 67.91 points, or 2.81 percent, to 2,480.71.

All these three major indexes closed at the highest level since the first half of January 2008 as equities extended a rally started in mid-March 2008 on optimism that credit markets and the economy have begun to stabilize.

European markets opened strong. France’s CAC 40, Germany’s DAX and UK’s FTSE 100 were up by between 1.02% to 1.19%.

In Asia, key benchmark indices in Hong Kong, Japan, South Korea, Singapore and Taiwan were up by between 0.49% to 2.53%. China's markets remained shut for its two-day Labour Day holiday and will resume trading on Monday, 5 May 2008.

Earlier, the US Federal Reserve on Wednesday, 30 April 2008, cut Fed Funds rate by 25 basis points to 2% and hinted at a pause in its recent campaign to lower borrowing costs.

Inflation remains the biggest concern for the Indian stock market. The measures taken by the Union government to control inflation have also added to uncertainty on corporate profit. Finance Minister P Chidambaram on Tuesday, 29 April 2008, said government will impose export tax on basmati rice and some steel products, and cut import duties on key inputs like ferro alloys and metallurgical coke. He said the measures were being taken to improve domestic supplies and to moderate prices. The government has already banned export of cement and non-basmati rice.

Given that parliamentary elections are scheduled next year (in May 2009), the government may leave no stone unturned in its attempt to rein in inflation. This is bad news for commodity scrips like cement, steel etc.

In a bid to rein in inflation, the Reserve Bank of India, on Tuesday, 29 April 2008, raised cash reserve ratio (CRR) by 25 basis points to 8.25%, to suck out excess liquidity in the banking system, in its annual monetary policy review. While the central bank has mentioned price stability as its key priority, the overall undertone of the policy is not as hawkish as market had feared. That in turn boosted the bourses with Sensex jumping 362.50 points or 2.13% on that day (29 April 2008) to settle at 17,378.46. The RBI governor Y V Reddy expects inflation to moderate in the next 2-3 months.

Good Q4 results March 2008 results and firm global markets, triggered a solid rebound in the Indian market over the past few days. Buying by domestic institutions has supported the market. From a recent low of 14,809.49 on 17 March 2008, the Sensex has climbed 2,790.63 points or 18.84%. However, it is still 3,606.65 points or 17% off from a record high of 21,206.77 hit on 10 January 2008.

The structural growth drivers of the Indian economy remain intact – India’s economy is expected to witness a decent-to-strong growth for a long period of time due to favourable demographics. Acceleration in infrastructure creation will be another driver of strong growth in India’s economy. Rating agency CRISIL in its latest outlook for Indian economy for the year through March 2009 has stated that the overall growth scenario is expected to remain strong with investment as the main driver.

Another pointer to the fact that the long term India growth story remains intact is the outcome of the latest 2008 US-India Business Council (USIBC) survey, according to which, India is, and will continue to be, a premier destination for investment by US firms, with a large number of respondents rating future economic growth in India as highly sustainable.