Sensex vaults 4.5% as Sebi warns FIIs against lending of shares overseas

The central bank's rate cut, higher global 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 today. But intraday volatility was high. The BSE Sensex rose 460.30 points or 4.5%, extending Monday’s (20 October 2008) 2.48% gain.

Index heavyweight Reliance Industries spurted. Tata Consultancy Services rose more than 12.5%. Jaiprakash Associates spurted more than 16% on good Q2 September 2008 results. Tata Consultancy Services rose more than 13%, Tata Steel rose more than 10% and Reliance Communications rose more than 11%. The market breadth was strong.

European markets and some Asian markets rose as France said it will invest $14 billion in banks and the US moved toward a second stimulus package.

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.

The BSE 30-share Sensex rose 460.30 points or 4.5% to 10,683.39. The index surged 527.11 points at the day's high of 10,750.20 in mid-afternoon 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 112.10 points or 3.59% to 3,234.90.

The Sensex has risen 708.04 points or 7.09% in two trading sessions from its close of 9,975.35 on 17 October 2008. But the barometer index is down 9,603.06 points or 47.33% in the calendar year 2008 so far from its close of 20,286.99 on 31 December 2007. It is 10,523.38 points or 49.62% below its all-time high of 21,206.77 struck on 10 January 2008.

BSE clocked turnover of Rs 3857 crore today as compared to a turnover of Rs 3.697.57 crore on 20 October 2008.

Nifty October 2008 futures were at 3245, at a premium of 10.10 points as compared to spot closing of 3234.90. NSE's futures & options (F&O) segment turnover was Rs 49,845.05 crore, which was lower than Rs 51,272.30 crore on Monday, 20 October 2008.

The BSE Mid-Cap index was up 2.31% at 3587.24 and The BSE Small-Cap index was up 2.03% at 4,196.28. Both the indices underperformed the Sensex.

BSE Consumer Durables index (up 8.95% to 2,271.82), BSE Realty index (up 8.32% to 2,632.93), BSE IT index (up 6.03% to 2,906.83), BSE Capital Goods index (up 5.48% to 7,563.42), BSE Teck index (up 4.66% to 2,282.64) outperformed the Sensex.

BSE PSU index (up 1.04% to 5,268.67), BSE HealthCare index (up 1.33 % to 3,302.82), BSE Auto index (up 1.65% to 3,123.27), BSE Bankex (up 2.57% to 5,842.23), BSE FMCG index (up 3.15% to 1,957.36), BSE Metal index (up 3.64% to 6,101.76), BSE Oil & Gas index (up 3.86% to 6,774.28), BSE Power index (up 4.36% to 1,751.40), underperformed the Sensex.

The market breadth was strong. On the BSE, 1,613 shares advanced as compared to 975 that declined. 63 shares remained unchanged.

India’s largest private sector company by market capitalization and oil refiner Reliance Industries rose 5.73% to Rs 1,397, rose ahead of Q2 results. The stock came off the session's high of Rs 1,424.60. The company is scheduled to announce its Q2 September 2008 result on 23 October 2008.

Tata Steel (up 10.2% to Rs 278.30), Reliance Communications (up 11.25% to Rs 258.20), Tata Power Company (up 9.6% to Rs 789.55), Sterlite Industries (up 8.59% to Rs 294.70) were the major gainers from the Sensex pack.

Mahindra & Mahindra (down 2.1% to Rs 408.50) and Hindalco Industries (down 1.68% to Rs 64.35) were the major losers from the Sensex pack.

IT stocks gained on overnight spurt in American depository receipts (ADRs) and amid steady rupee. The BSE IT index rose 6.03% and was the third biggest gainer from the sectoal indices on BSE.

India's third largest IT exporter by sales Satyam Computer Services rose 9.84%. 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 3.9%. Infosys ADR gained 7.94%. India's largest IT services provider by sales Tata Consultancy Services jumped 12.86%. India's fourth largest IT exporter by sales Wipro rose 5.61%. Wipro ADR rose 0.84%.

NIIT Technologies gained 8.42%, as net profit rose 20.10% to Rs 29.35 crore in Q2 September 2008 over Q1 June 2008.

Zigma Software fell 2.44% on board meet on 27 October 2008, to consider issue of bonus shares.

PSI Data Systems hit 20% upper circuit on board approving a proposal received from promoter group to acquire the public shareholding of the company from the market through open offer, and to delist equity shares of the company from the Bombay Stock Exchange.

The Indian rupee was little changed in thin trade on Tuesday as a strike by central bank employees affected dealing.The partially convertible rupee was at 48.9550/9700 per dollar, compared to its previous close of 48.97/98 on Monday. 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. ICICI Bank, HDFC Bank and State Bank of India rose between 0.31% to 4.86%.

The BSE's banking sector index Bankex rose 2.57%. 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 5.25%. LIC Housing Finance surged 7.83% as net profit rose 16.05% to Rs 135.06 crore on 34.86% rise in total income to Rs 707.72 crore in Q2 September 2008 over Q2 September 2007.

Indiabulls Financial Services spurted 8.74% on reports of good loan recovery in Q2 September 2008.

The BSE Consumer Durables index rose 8.95% and was the biggest gainer from the sectoral indices on BSE. All the stocks rose from the BSE Consumer Durables index on hopes lower interest rates will spur demand. Gitanjali Gems, Rajesh Exports, Videocon Industries rose by between 1.46% to 7.26%.

Titan Industries surged 17.39% as net profit surged 88.21% rise in net profit to Rs 87.14 crore on 53.04% rise in sales to Rs 1088.76 crore in Q2 September 2008 over Q2 September 2007.

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 8.32% and was the second major gainer from the sectoral indices on BSE. Out of 14 real estate stocks from BSE Realty index, 11 stocks rose rest declined. Realty majors, DLF, Indiabulls Real Estate Unitech rose by between between to 5.01% to 27.65%.

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

Peninsula Land rose 9.2% on reports of exploring the option of hiving off land assets to mitigate risks and address the ongoing financial turmoil.

PSU OMC stocks fell despite crude oil falling for the first time since last three days. BPCL, HPCL and Indian Oil Corporation were down by between 0.96% to 6.45%. 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 fell as much as $1.13, or 1.5 %, to $73.12 a barrel on the New York Mercantile Exchange today.

Shipping companies rose even as the Baltic Dry index, a measure of shipping costs for commodities, fell for 10th consecutive trading session in London on Monday, 20 October 2008. Great Eastern Shipping Company, Mercator Lines and Shipping Corporation of India rose by between 3.52% to 7.03%.

India’s largest commercial vehicle maker by sales Tata Motors rose 1.58% despite reports of rights issue getting a poor response.

India’s largest motorbike maker by sales Hero Honda Motors rose 2.66% as net profit jumped 49.9% to Rs 306.30 crore on 36.15% rise in total income to Rs 3255.93 crore in Q2 September 2008 over Q2 September 2007.

Jaiprakash Associates surged 16.25% as net profit jumped 96% to Rs 203.13 crore on 39.51% rise in total income to Rs 1286.63 crore in Q2September 2008 over Q2 September 2007.

India's largest electric equipment maker by sales Bharat Heavy Electricals rose 4.37% on bagging a Rs 641-crore contract for setting up a 412 megawatt hydro-electric project in Himachal Pradesh.

India’s second largest steel maker by sales Steel Authority of India fell 2.5% despite 18.19% rise in net profit to Rs 2009.60 crore on 33.7% rise in total income to Rs 12660.99 crore in Q2 September 2008 over Q2 September 2007.

Hindustan Zinc surged 3.47% even as net profit fell 17.88% to Rs 959.51 crore on 9.28% rise in total income to Rs 1971.18 crore in Q2 September 2008 over Q2 September 2007.

Crompton Greaves surged 6.69% as net profit rose 24.73% to Rs 92.54 crore on 18.72% rise in total income to Rs 1096.44 crore in Q2 September 2008 over Q2 September 2007.

United Spirits gained 3.92% as net profit rose 17.06% to Rs 93.89 crore in Q2 September 2008 over Q2 September 2007.

Marico spurted 7.32% as net profit rose 18.42% to Rs 45.12 crore in Q2 September 2008 over Q2 September 2007.

Sadbhav Engineering declined 1.17% despite bagging an order worth Rs 268.34 crore.

EID Parry India moved up 11.4% on proposal to consider buy back of own shares.

ECE Industries soared 8.97% on proposal to raise funds by way of a rights issue.

Idea Cellular tumbled 12.54% as net profit fell 31.80% to Rs 150.39 in Q2 September 2008 over Q2 September 2007.

Sun TV Network surged 4.02% on proposal to consider buyback of own shares.

GVK Power & Infrastructure clocked the highest volume of 1.68 crore shares on BSE. Housing Development & Infrastructure (1.09 crore shares), Reliance Petroleum (92.86 lakh shares), Indiabulls Securities (87.84 lakh shares) and Reliance Natural Resources (87.61 lakh shares) were the other volume toppers in that order.

Reliance Industries clocked the highest turnover of Rs 301.65 crore on BSE. Reliance Capital (Rs 225.49 crore), ICICI Bank (Rs 172.23 crore), State Bank of India (Rs 162.58 crore) and Housing Development & Infrastructure (Rs 159.64 crore) were the other turnover toppers in that order.

In Europe, key benchmark indices in France, UK were up by between 0.18% to 1.57%. While, key benchmark index in Germany fell 0.37%.

Asian stocks were mixed today, 21 October 2008. Key benchmark indices in China, Japan, Taiwan and were up by between 0.22% to 3.34%. Key benchmark indices in Singapore, South Korea, and Hong Kong fell by between 0.1% to 0.95%.

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.