Market jumps

The key benchmark indices spurted in mid-morning trade to hit new intraday high after a bout of volatility in early trade. The BSE Sensex was up 324.37 points or 3.17%. The central bank's rate cut, higher Asian markets and short covering on the stock market regulator Securities & Exchange Board of India (Sebi)’s warning to foreign funds against overseas lending and borrowing of Indian securities, boosted the domestic bourses.

IT stocks jumped on weak rupee. Rate sensitive banking and realty stocks rose. Index heavyweight Reliance Industries spurted. Jaiprakash Associates rose more than 10%. The market breadth was strong.

Sebi has disapproved of the overseas lending and borrowing activity of FIIs and the consequent selling pressure in the cash market in India. The Sebi warning to FIIs against overseas lending and borrowing came after the data showed FIIs had lent equities worth Rs 348 crore to overseas entities for the purpose of short selling, during 10 October-14 October 2008.

Fall in interest rate boosts stocks as it results in lower borrowing costs for corporates. The Reserve Bank of India (RBI), on Monday, 20 October 2008, cut the repo rate, by 100 basis points to 8%, with immediate effect. The repo rate is the rate at which the RBI provides funds to banks against the collateral of government bonds for a day to three days.

At 11:21 IST, the BSE 30-share Sensex was up 324.37 points or 3.17% to 10,547.46. The index surged 340.28 points at the day's high of 10,563.37 in mid-morning trade. The Sensex rose 27.14 points at day’s low of 10,250.23 in early trade.

The S&P CNX Nifty was up 86 points or 2.75% to 3,208.80.

The BSE Mid-Cap index was up 1.8% at 3,569.57 and The BSE Small-Cap index was up 1.74% at 4,184.37. Both the indices underperformed the Sensex.

The market breadth was strong. On BSE, 1,324 shares advanced as compared to 682 that declined. 55 shares remained unchanged.

India’s largest private sector company by market capitalization and oil refiner Reliance Industries rose 4.58% to Rs 1,381.05.

Jaiprakash Associates (up 10.49% to Rs 74.80), Stelite Industries (up 7.44% to Rs 291.60), Reliance Communications (up 7.04% to Rs 248.45), Reliance Infrastrucutre (up 7.03% to Rs 515.50) were the major gainers from the Sensex pack.

Mahindra & Mahindra (down 4.76% to Rs 397.40), Grasim Industries (down 0.48% to Rs 1,184.80) and Bharti Airtel (down 0.84% to Rs 702) ITC (down 0.48% to Rs 164.20) were the major losers from the Sensex pack.

IT stocks gained on fall in rupee and overnight spurt in American depository receipts (ADRs). BSE IT index rose 4.13% and was the third biggest gainer form the sectoal indices on BSE. p> India's third largest IT exporter by sales Satyam Computer Services rose 5.43. Its ADR jumped 6.46%. The company raised its earnings guidance in rupee terms at the time of announcing Q2 September 2008 results on Friday, 17 October 2008.

India's second largest IT exporter by sales Infosys rose 4.95. Infosys ADR gained 7.94%. India's largest IT services provider by sales Tata Consultancy Services jumped 7.21%. India's fourth largest IT exporter by sales Wipro rose 5.11%. Wipro ADR rose 0.84%

Rupee eased to 48.98 against dollar on Monday compared with 48.85 per on Friday. A weak rupee results in higher revenues for IT companies as they earn most of their revenues in dollar terms.

Banking majors extended yesterday’s (20 October 2008) gains on hopes lower rates will boost lending. HDFC Bank, ICICI Bank and State Bank of India rose between 1.955% to 4.38%.

The BSE's banking sector index Bankex rose 2.59%. ICICI Bank, State Bank of India and HDFC Bank have a weightage of 24.21%, 22.44% and 20.55%, respectively, in the Bankex.

India’s largest home loan lender by operating income HDFC rose 2.75%.

Most realty stocks rose today after yesterday’s slide as cut in lending rates will spur demand for residential properties. The BSE Realty index rose 4.8% and was the major gainer from the sectoral indices on BSE. Out of 14 real estate stocks from BSE Realty index, 12 stocks rose rest declined. Realty majors, Indiabulls Real Estate, DLF, Unitech rose by between between to 3.93% to 12.49%.

DLF, India bulls Real Estate, Unitech have a weightage of 42.53% 22.09% and 11.03%, respectively, in the BSE Realty index.

PSU OMC stocks fell after crude oil rose for a third day on signs that the Organization of Petroleum Exporting Countries will reduce production to halt a 50% drop in prices since July 2008. BPCL, HPCL and Indian Oil Corporation were down by between 0.77% to 2.65%.

State-run oil marketing firms suffer revenue loss on domestic sale of petrol, diesel, LPG and kerosene at a controlled price. Crude oil for November 2008 delivery rose $1.44, or 1.9 % to $75.69 a barrel today.

India’s largest commercial vehicle maker by sales Tata Motors rose 2.11% despite reports of rights issue getting a poor response.

EID Parry India rose 5.54% on board meeting on 29 October 2008, to consider a proposal for buy back of equity shares.

Punj Lloyd surged 3.14% on overseas unit bagging an order worth $22.48 million.

Sun TV Network surged 5.79%, on board meeting on 30 October 2008 to consider buy back of equity shares

ECE Industries surged 11.83% on board meeting on 31 October 2008 to consider rights issue.

Most of the Asian stocks were higher today, 21 October 2008, triggered by overnight surge in US stocks. Key benchmark indices in South Korea, China, Japan, Taiwan and Singapore were up by between 0.22% to 2.45%. Key benchmark indices in Hong Kong fell by 0.69%.

US stocks rallied on Monday after the Federal Reserve's chairman backed more government spending to help the economy and credit market conditions showed further signs of improvement.

The BSE Sensex rose 2.48% on Monday boosted by the repo rate cut by the Reserve Bank of India during trading hours.