Market soars on reforms hopes

The market gave a thumbs up to government securing confidence vote in parliament as that may pave the way for key economic reforms. The barometer index BSE Sensex registered its biggest single day rise in nearly four months. Easing crude oil prices and firmness in global markets were other positive factors that moved the domestic indices higher.

Banking, realty and capital goods sector shares led the rally. All the sectoral indices on BSE were in green. Anil Dhirubhai Ambani controlled Reliance Natural Resources surged on huge volumes.

Oil held near six-week lows on Wednesday, 23 July 2008, as worries increased over dwindling US demand at the same time as fears eased Hurricane Dolly would deal a major blow to oil and gas supply. Oil was trading around $126.34 per barrel, nearly 14% lower than record $147.27 hit earlier this month.

The Congress-led coalition government won a confidence vote in parliament late on Tuesday, 22 July 2008, ending speculation over an early election and allowed Prime Minister Manmohan Sigh to turn the page on political squabbling that had worried investors and stalled government action. The trust vote paves the way for operationalisation of Indo-US nuclear deal.

Finance Minister P. Chidambaram said on Tuesday, 22 July 2009, the government would now push ahead with unfinished economic reforms that would include drafting new legislation in insurance and banking sectors and creating a pension regulatory body.

The 30-share BSE Sensex rose 838.08 points or 5.94% at 14,942.28. It was the biggest single day rise in Sensex since 25 March 2008. Sensex gained 875.70 at day's high of 14,979.90 hit in late trade. The index rose 464.02 points at day's low of 14,568.22, hit in mid-morning trade.

The broader based S&P CNX Nifty advanced 236.70 points or 5.58% at 4476.80. Nifty July 2008 futures were at 4489.90, at a premium of 13.1 points as compared to spot closing.

As per provisional data released by the stock exchanges after trading hours, foreign funds today, 23 July 2008, bought shares worth a net Rs 1,306.56 crore. Domestic funds sold shares worth a net Rs 875.22 crore.

The BSE Mid-Cap index rose 5.05% at 5,615.94 and the BSE Small-Cap index rose 4.23% to 6,812.64.

The market breadth was strong on BSE with 2270 shares advancing as compared to 436 that declined. 53 remained unchanged.

BSE clocked a turnover of Rs 7447 crore as against Rs 5,522.37 on Tuesday, 22 July 2008. NSE's futures & options (F&O) segment turnover was Rs 68010.68 crore, which was higher than Rs 54100.84 crore on Tuesday, 22 July 2008.

Sensex has risen 2366.48 points or 18.81% in last five trading sessions from its close of 12575.80 on 16 July 2008. The barometer index is down 5344.71 points or 26.34% in the calendar year 2008 so far from its close of 20,286.99 on 31 December 2007. It is 6264.49 points or 29.54% away from its all-time high of 21,206.77 struck on 10 January 2008.

The top gainers from the Sensex pack today were Reliance Communication (up 12.20% at Rs 525.25), Housing Development Finance Corporation (up 10.92% at Rs 2380.20), Bharat Heavy Elelctricals (up 10.92% at Rs 1772), State Bank of India (up 10.45% at Rs 1543.80), and Reliance Infrastructure (up 10.36% at Rs 1014.50), soared.

Hindustan Unilever (down 0.65% at Rs 231.05), and Cipla (down 2.21% at Rs 232.50), were the only losers in the Sensex pack.

Banking shares soared on expectations reforms in the sector. India’s largest private sector bank by assets ICICI Bank surged 11.64% to Rs 738.25. The stock has 7.55% weightage in Sensex. Yes Bank (up 16.76% at Rs 140), Karnataka Bank (up 14.68% at Rs 142.60), Kotak Mahindra Bank (up 13.46% at Rs 578.80), and Canara Bank (up 10.22% at Rs 188.75), spurted. The BSE Bankex outperformed the Sensex, rising 9.99% to 7,291.50.

Capital goods sector shares edged higher. Punj Lloyd (up 12.46% at Rs 269.90), Suzlon Energy (up 10.37% at Rs 220.30), Crompton Greaves (up 9.85% at Rs 256.45), and Larsen & Toubro (up 7.58% at Rs 2,766.65), gained. The BSE Capital Goods index outperformed the Sensex, rising 8.18% at 12,339.77.

Realty stocks were in demand. Phoenix Mills (up 18.76% at Rs 138.35), Housing Development & Infrastructure (up 10.63% at Rs 513.05), Mahindra Lifespace Developers (up 10.11% at Rs 470.65), and DLF (up 9.12% at Rs 495.55), galloped. The BSE Realty index outperformed the Sensex, rising 8.08% to 5,199.27.

India’s largest private sector firm by market capitalization and oil refiner Reliance Industries rose 5.16% to Rs 2265.50. The Bombay High Court will have daily hearing from Thursday, 24 July 2008, on the petition of Reliance Natural Resources (RNRL) seeking to restrain Reliance Industries (RIL) from selling natural gas from its KG basin gas fields to third parties. Reliance Natural Resources surged 22.71% to Rs 90.25. The stock rose on huge volume of 5.55 crore shares.

India's second largest software exporter by sales Infosys Technologies fell 1.57% at Rs 1603.70.

Reliance Natural Resorces clocked the highest turnover of Rs 480.64 crore on BSE. Reliance Capital (Rs 476.17 crore), Reliance Petroleum (Rs 286.42 crore), Relaince Industries (Rs 278.66 crore), and Reliance Communication (Rs 259.57 crore), were the other turnover toppers on BSE in that order.

Reliance Natural Resorces reported the highest volume of 5.55 crore shares on BSE. IFCI (2.13 crore shares), Reliance Petroleum (1.69 crore shares), Ispat Industries (1.42 crore shares), and Reliance Power (1.39 crore shares), were the other volume toppers on BSE in that order.

Mining firm Sesa Goa advanced 14.79% to Rs 3304 after posting 442.42% rise in net profit to Rs 644.72 crore on 182.34% increase in total income to Rs 1310.93 crore in Q1 June 2008 over Q1 June 2007.

Power equipment and services firm Siemens spurted 11.48% at Rs 556.35 on reporting 107.2% surge in net profit to Rs 169.43 crore on 1.5% rise in net sales to Rs 1809.68 crore in Q3 June 2008 over Q3 June 2007.

Insurance firm Max India surged galloped 7.46% to Rs 193.80 on hopes the government, fresh from winning a confidence vote in parliament, is likely to push through reforms to boost foreign investment in insurance firms to 49% from 26% now.

Realty developer Unitech spurted 7.77% at Rs 169.25 on reports the founders of the company are looking to enter the general insurance sector and would rope in a foreign partner.

Pharmaceuticals firm Piramal Healthcare jumped 4.47% at Rs 296.60 after the company it expected to earn Rs 20 crore in revenue in two years from the sale of 'Ducray' range of skin and hair care products.

European markets, which opened after Indian markets, firmed up further after positive start. Key indices in UK, France and Germany were up 1.17% to 1.59%.

Asian markets, which opened before Indian market, were trading firm. Key benchmark indices in Hong Kong, Japan, South Korea, Singapore and Taiwan were up between 0.97% to 3.46%. However, China’s Shanghai Composite index was down 0.29%.

Fall in oil prices boosted US stocks on Tuesday, 22 July 2008. The Dow Jones industrial average rose 135.16 points, or 1.18%, to 11,602.50, while the Standard & Poor's 500 Index ended up 17.00 points, or 1.35%, at 1,277.00. The Nasdaq Composite Index was up 24.43 points, or 1.07%, at 2,303.96.