Market cheers NSG nod for nuclear trade with India

Key benchmark indices surged today after the 45-nations Nuclear Supplier Group (NSG) on Saturday, 6 September 2008, lifted a 34-year-old embargo on nuclear trade with India. The BSE 30-share Sensex jumped 461.14 points. Strong Asian and European markets supported domestic bourses.

The market, however, gave up some of the strong gains in late trade. Both the key benchmark indices – BSE Sensex and S&P CNX Nifty fell below their respective psychologically important levels of 15,000 and 4,500, after topping those levels earlier in the day.

As per provisional data released by the stock exchanges after trading hours, foreign funds today, 8 September 2008, bought shares worth a net Rs 253.43 crore. Domestic funds sold shares worth a net Rs 132.62 crore.

The market breadth was strong. All the 30 Sensex stocks were in green. Sterlite Industries surged over 6%. Probable nuclear deal beneficiaries were the flavor of the day. Banking and financial shares also surged.

Stocks rose across the globe after the US government on Sunday, 7 September 2008 took over mortgage finance firms Fannie Mae and Freddie Mac to limit extensive damage of the financial crisis. US futures jumped. In Asia, key benchmark indices in Japan, Hong Kong, Taiwan, Singapore, South Korea were up by between 3.88% and 5.57%. However, China's Shanghai Composite was down 2.68%

In Europe, key benchmark indices in UK, Germany and France were up by between 3.57% and 4.67%.

The BSE 30-share Sensex jumped 461.14 points or 3.18% at 14,944.97. It opened 554.23 points higher at 15,034.06 and surged to strike an intra-day high of 15,107.01 in early trade. At the day’s high, the Sensex gained 623.18 points. At the day’s low of 14,917.06 hit in late trade, the Sensex rose 433.23 points.

The S&P CNX Nifty jumped 130 points or 2.99%, to settle at 4482.30. Nifty September 2008 futures were at 4510, at a premium of 27.70 points as compared to spot closing. NSE's futures & options (F&O) segment turnover was Rs 45,977.53 crore, which was lower than Rs 46,868.19 crore on Friday, 5 September 2008.

The BSE Sensex is down 5342.02 points or 26.33% in the calendar year 2008 so far from its close of 20,286.99 on 31 December 2007. It is 6261.80 points or 29.53% away from its all-time high of 21,206.77 struck on 10 January 2008.

The NSG’s acceptance of the US proposal to drop a ban on nuclear trade with India will now put the Indo-US nuclear deal on the fast track. The approval came after almost three days of meeting in Vienna, lifting a 34-year-old embargo on nuclear trade with India. The NSG meet was called to minimise any damage to the Non-Proliferation Treaty, which India has not joined.

However, the nuclear deal still needs to be ratified by the US Congress before it could take force. The Congress must act before adjourning in late September 2008 for US presidential elections. If that does not happen, the deal could be left to an uncertain fate under a new US administration that takes office next year.

The market breadth was strong on BSE with 1656 shares advancing as compared to 1040 that declined. 63 remained unchanged.

The total turnover on BSE amounted to Rs 4485 crore as compared to Rs 4,815.43 crore on Friday, 5 September 2008.

The BSE Mid-Cap index rose 1.15% to 5,819.89 and the BSE Small-Cap index gained 1.12% to 6,982.77. Both these indices underperformed the Sensex.

India’s top copper manufacturer in terms of sales, Sterlite Industries jumped 6.16% to Rs 624 on 5.79 lakh shares. It was the top gainer from Sensex pack

Banking and financial shares vaulted buoyed by the bailout of US mortgage giants Fannie Mae and Freddie Mac. ICICI Bank (up 4.65% to Rs 719), HDFC Bank (up 4.43% to Rs 1302.70), State Bank of India (up 4.84% to Rs 1592.05), and Housing Development Finance Corporation (up 4.12% to Rs 2375) surged.

Potential nuclear deal beneficiaries rallied. India’s largest private sector power generation firm by sales, Reliance Infrastructure jumped 4.17% to Rs 1058.20. The company had earlier announced plans to invest Rs 12,000- crore in nuclear power capacity. It plans to install 2000 megawatt of nuclear power capacity.

India’s largest engineering & construction company by order book position Larsen & Toubro gained 4.54% to Rs 2735.15. Bharat Heavy Electricals, the nation’s largest capital goods maker by sales surged 2.90% to Rs 1782. The company supplies up to 500 megawatt of equipment to Nuclear Power Corporation.

India’s largest power generation company by sales, National Thermal Power Corporation surged 4.50% to Rs 181.25. The company signed a memorandum of understanding with Swiss Agency for Development and Cooperation to formulate a long-term strategy for renewable energy projects. The company made this announcement after trading hours on Friday, 5 September 2008.

India’s largest private sector firm by market capitalization and oil refiner Reliance Industries (RIL) advanced 2.19% to Rs 2125 on 7.30 lakh shares.

Telecom pivotals were in demand on renewed buying interest. India’s second largest cellular services provider in terms of market capitalisation Reliance Communications (RCom) advanced 1.03% to Rs 398, off day’s high of Rs 415. RCom’s subsidiary Reliance Big Entertainment reportedly acquired a majority stake in the US-based cricket webcasting portal, Willow TV, for an undisclosed amount.

India’s largest cellular services provider in terms of market capitalisation Bharti Airtel rose 1.54% to Rs 817.25

Ranbaxy, India’s top drug maker by sales gained 3.61% to Rs 466.60, after striking day’s low of Rs 438.05. The Japanese drug maker Daiichi Sankyo’s open offer to acquire an additional 20% stake at Rs 737 a share in the company ended on 4 September 2008.

IT pivotals advanced on fresh buying. Infosys Technologies (up 2.09% to Rs 1748.60), Satyam Computer Services (up 3.29% to Rs 429.50), Wipro (up 1.11% to Rs 431), and TCS (up 1.78% to Rs 853.10), logged gains.

Auto shares gained. India’s top truck maker by sales Tata Motors rose 4.30% to Rs 438 on reports of stalemate over acquisition of land for the company’s project at Singur ended on Sunday, 7 September 2008 following two rounds of discussions between West Bengal Chief Minister Buddhadeb Bhattacharjee and Trinamool Congress chief Mamata Banerjee.

But Tata Motors, which had suspended work at the site, said on Monday, 8 September 2008, it would not start work until it was confident of smooth operations and the continued viability of the project.

Mahindra & Mahindra (up 0.61% to Rs 585.50), and Maruti Suzuki India (up 0.92% to Rs 686), rose from auto pack.

Austral Coke & Projects topped the turnover chart on BSE with a turnover of Rs 186.08 crore followed by Reliance Capital (Rs 173.60 crore), Reliance Industries (Rs 156.79 crore), Larsen & Toubro (Rs 156.01 crore) and Resurgere Mines & Minerals (Rs 149.25 crore), in that order.

Reliance Natural Resources topped volumes on BSE notching volumes of 93.22 lakh shares followed by Austral Coke & Projects (90.18 lakh shares), IFCI (80.24 lakh shares), Reliance Power (57.72 lakh shares) and Karuturi Global (51.05 lakh shares), in that order.

Among the non-Sensex potential nuclear deal benefeciaries, Areva T&D gained 3.08% to Rs 1675. Alstom Projects India surged 6.47% to Rs 422.20. The company makes nuclear reactors and rotors.

Hindustan Construction Company jumped 7.58% to Rs 104.35. The company has constructed four nuclear power projects in India. It is an engineering procurement and construction contractor for nuclear projects.

Walchandnagar Industries galloped 13.70% to Rs 302.45. It makes critical equipment for India’s nuclear power facilities.

Refinery shares declined as crude oil prices rose. Hindustan Petroleum Corporation (down 1.31% to Rs 233.30), Bharat Petroleum Corporation (down 3.90% to Rs 344), and Indian Oil Corporation (down 2.92% to Rs 433.55), slipped.

New York's main contract, light sweet crude for delivery in October 2008 rose $2.37 to $108.60 per barrel today, 8 September 2008 on worries hurricane Ike will threaten production facilities in the oil-rich US Gulf Coast.

Cambridge Technology Enterprises was locked at 10% upper limit at Rs 61.05 after the company said on Monday, 8 September 2008, its board has approved the acquisition of US based Protege Software Services Inc. The company made this announcement before trading hours today, 8 September 2008.

Dolphin Offshore Enterprises India jumped 20% to Rs 281.15 after the company said on Monday, 8 September 2008, it has bagged two orders aggregating Rs 304 crore from Oil & Natural Gas Corporation. The company made this announcement during trading hours today, 8 September 2008.

Hotel Leela Venture rose 3.26% to Rs 34.85 on reports the firm plans adding seven new luxury hotels in the next three to five years. The company will invest Rs 2,000-crore to add 2,000 rooms at these new hotels.

Pratibha Industries surged 5.44% to Rs 284.90 after the company said on Monday, 8 September 2008, it has secured a contract worth Rs 44.75 crore from Delhi Jal Board for water transmission program.

The government is working on 32 reform laws, 21 of them in the area of economy and finance, Trade Minister Kamal Nath said in an interview to a German newspaper published on Monday, 8 September 2008. The government expects its coalition allies to support much of its planned economic reform legislation, Nath told the Handelsblatt daily.