Higher advance tax payment, good monsoon lift spirits

Bulls had an upper hand over bears for a second day in a row today with market sentiment boosted by reports of higher advance tax payment by top Indian firms in the first installment of 15 June 2008, reports of good monsoon in the initial phase and easing of oil prices from record high. Banking and realty shares led the rally.

The rally gathered strength in the second half of the trading session tracking firm European markets which opened after Indian market. All the sectoral indices on BSE were in green indicating that the rally was broad-based. Maruti Suzuki India, India's biggest car maker in terms of market share, spurted in the late trade.

As per provisional data, foreign funds bought shares worth a net Rs 142.36 crore today, 17 June 2008. Domestic funds bought shares worth a net Rs 420.08 crore.

European markets edged higher as reports suggested that the expectations of a US rate hike have been overplayed. Key indices in UK, France and Germany were up by 0.87% to 1.57%.

Asian markets were trading on a mixed note. Key indices in China, Japan, South Korea, and Singapore were down by 0.04% to 2.76%. However, Taiwan’s Taiwan Weighted index was up 0.39% and Hong Kong’s Hang Seng was up 0.12%.

The 30-share BSE Sensex gained 301.08 points or 1.96% at 15,696.90. At the day’s high of 15,732.75 Sensex gained 336.93 points at the fag end of the trading session. The index shed 37.84 points at the day’s low of 15,357.98, hit in early trade.

The broader based S&P CNX Nifty rose 80.5 points or 1.76% at 4653. Nifty June 2008 futures were at 4639.35, a discount of 13.65 points compared with the spot closing.

The BSE Mid-Cap index rose 1.59% to 6,400.18. The BSE Small-Cap index was up 1.46% to 7,781.30. Both these indices underperformed the Sensex.

The market breadth was strong on BSE with 1802 shares advancing as compared to 882 that declined. 80 remained unchanged.

BSE clocked a turnover of Rs 5312 crore as against Rs 4,537.92 on Monday, 16 June 2008. NSE's futures & options (F&O) segment turnover was Rs 42624.38 crore, which was higher than Rs 40166.83 crore on Monday, 16 June 2008.

As per reports, India's monsoon rains in the first half of June 2008 were more than 40% above the long-term average, raising hopes of strong crop output at a time when rising food prices have helped push inflation to 7-year highs.

Many companies have recorded a higher advance tax outgo in the first installment of 15 June 2008 compared to the corresponding period last year, raising expectations of good June 2008 results. The finance minister expects direct tax collection for the current year to cross Rs 4 lakh crore. Advance taxes are paid in four instalments, in June, September, December and March. Usually, the first instalment is 15% of the total tax estimated to be paid for the whole fiscal.

Oil steadied today, 17 June 2008, after touching a record near $140 the previous day, with traders caught between a weaker dollar and expectations that top exporter Saudi Arabia will ramp up output to its highest rate in decades. US crude slipped 15 cents to $134.46 a barrel after ending 25 cents lower on Monday, 16 June 2008, as traders quickly took profit from a rally to a record $139.89 triggered by a falling dollar and the closure of a North Sea oil platform.

India’s largest dedicated housing finance firm by operating income Housing Development Finance Corporation (HDFC) jumped 5.99% at Rs 2298.05. HDFC paid advance tax of Rs 140 crore in the first installment of 15 June 2008, marking an over 40% increase over the corresponding figure in the previous year.

India's largest passenger car maker in terms of market share Maruti Suzuki soared 5.22% at Rs 755.60 on reports the company plans to counter Ratan Tata's Nano with a stripped-down version of its flagship model Maruti 800.

Battered bank stocks rose on reports of higher advance tax paid by prominent banking/finance firms. The BSE Bankex outperformed the Sensex, rising 4.29% to 7,567.17. Indian Overseas Bank (up 8.49% at Rs 114.35), Axis Bank (up 7.89% at Rs 794.20), Kotak Mahindra Bank (up 7.45% at Rs 679), and HDFC Bank (up 4.87% at Rs 1207.55), spurted.

India's largest commercial bank State Bank of India rose 4.57% at Rs 1387.05. The bank recorded a 32% increase in advance tax payment to Rs 663 crore Q1 June 2008 over Q1 June 2007.

India's largest private sector bank by assets ICICI Bank rose 2.70% at Rs 820.25. The stock had hit a low of Rs 785.55 earlier in the day. ICICI Bank’s tax outgo jumped 38% to Rs 340 crore in Q1 June 2008 over Q1 June 2007. ICICI Bank paid advance tax of Rs 1,108.6 crore in the whole of last fiscal. ICICI Bank has a third highest weightage of 8.18% in BSE Sensex.

The BSE Realty index outperformed the Sensex, rising 3.89% to 6,099.19. Indiabulls Real Estate (up 6.34% at Rs 423.60), Unitech (up 4.70% at Rs 207.10), and DLF (up 2.99% at Rs 505.90), soared.

India’s second largest software exporter by sales Infosys Technologies rose 0.32% at Rs 1913.30. Infosys has a second highest weightage of 8.80% in BSE Sensex.

India’s second largest listed cellular service provider by sales Reliance Communication (RCOM) declined 0.92% to Rs 530.20. The stock is southward bound since Monday, 16 June 2008, after Reliance Industries, India’s largest private sector firm by market capitalisation and oil refiner, claimed first right of refusal to buy a controlling stake in it. Reliance Communications, controlled by Anil Ambani, is in exclusive talks with South Africa's MTN about a tie-up that could create a top-10 global telecoms firm. As part of a tie-up, Anil Ambani would likely swap his controlling stake in Reliance Communications to become the largest shareholder in MTN. On Monday, the RCOM stock had ended 1.52% lower at Rs 535.10.

Reliance Industries (RIL) rose 1.94% at Rs 2329.20. RIL has a highest weightage of 15.76% in BSE Sensex.

Anil Dhirubhai Ambani group Reliance Power rose 3.41% at Rs 191 on reports the firm will get a $500 million loan from the Asian Development Bank for its 4,000 megawatt ultra mega power project coming up in Andhra Pradesh.

Chemicals maker GHCL spurted 6.82% at Rs 77.55 on reports the Al Rostmani Group of the United Arab Emirates is planning to pick up a majority stake in the firm for an estimated Rs 700 crore.

Real estate developer Housing Development and Infrastructure (HDIL) rose 2.75% at Rs 606.15 on reports the firm is eyeing the power sector as part of its diversification strategy.

South Indian Bank surged 3.12% to Rs 127.15 after the private sector bank said its board will meet on 28 June 2008 to consider issue of bonus shares.

Commercial vehicles maker Ashok Leyland gained 0.92% to Rs 33.05 after the company said it has made a strategic investment in Albonair GmbH, Germany for development of vehicle emission treatment products.

Among side counters, Ravalgaon Sugar Farm (up 20% at Rs 5729.10), Torrent Pharmaceuticals (up 20% at Rs 185), Vaibhav Gems (up 20% at Rs 73.95), Essar Shipping (up 9.48% at Rs 129.90), UCO Bank (9.47% at Rs 42.20), Indiabulls Financial Services (up 9.01% at Rs 368.50), spurted.

Anu's Laboratories clocked a highest turnover of Rs 449.52 crore on BSE. Reliance Capital (Rs 194.12 crore), Reliance Industries (Rs 180.93 crore), Reliance Petroleum (Rs 162.72 crore) and Larsen & Toubro (Rs 127.31 crore), were the other turnover toppers on BSE in that order.

Chambal Fertilizers & Chemicals reported a highest volume of 1.22 crore shares on BSE. Anu's Laboratories (1.10 crore shares), Reliance Natural Resources (98.96 lakh shares), Nagarjuna Fertilizers & Chemicals (95.46 crore shares) and Reliance Petroleum (88.52 lakh shares), were the other volume toppers on BSE in that order.

US markets ended mixed in see-saw trade yesterday, 16 June 2008. A rally was sparked in banking stocks with Lehman Brothers declaring results in line with market expectations. The Dow Jones industrial average lost 38.27 points, or 0.31%, to 12,269.08. The S&P 500 index gained 0.11 points, or 0.01%, to 1,360.14. The Nasdaq Composite index added 20.28 points, or 0.83%, to 2,474.78.

Foreign institutional investors (FIIs) stepped up selling of Indian equities on Monday, 16 June 2008. As per data released by the Securities & Exchange Board of India (Sebi) today, 17 June 2008, foreign funds sold shares worth a net Rs 532.80 crore on 16 June 2008, much higher than their outflow of Rs 51.80 crore on the previous trading session on Friday, 13 June 2008. FIIs had pressed heavy sales worth Rs 1141.70 crore on Thursday, 12 June 2008.

The BSE Sensex had risen 206.20 points or 1.36% at 15,395.82 on Monday, 16 June 2008, on the back of firm global markets.