Sensex holds 10,000

Weak global markets pulled the key benchmark indices off the higher level in late trade in what was a choppy trading session. Volatile bank shares caused volatility in the key benchmark indices. The BSE 30-share Sensex was up 23.48 points, or 0.23% , off close to 90 points from the day's high and up 112.49 points from the day's low. The market breadth, indicating the overall health of the market, was strong.

The late slide in the key benchmark indices followed a rally which took the market to day's high in mid-afternoon trade triggered by expectations of a second government stimulus package for the economy and on hopes of further cut in interest rates by the central bank.

Though the Sensex slipped below the psychological level in intraday trade, a rebound from lower level ensured that it ended above that level for the second day in a row. The Sensex had settled above the 10,000 level for the first time in more than a month on Thursday, 18 December 2008.

The market was volatile right from the onset of the trading session. After a weak opening, the market had bounced back shortly on expectations of a second government stimulus package for the economy and on hopes of further cut in interest rates by the central bank supported the market. The market cut gains after the strong rebound. It soon recovered in mid-morning trade following a decision by the Bank of Japan to cut interest rates. Fall in IT stocks pulled the market lower in early afternoon trade.

The market recovered and held positive zone for a brief before slipping into the red again in afternoon trade on weakness in Asian stocks. The market bounced back again in mid-afternoon trade. It cut gains in late trade. The Sensex swung 201.12 points between the day's high and low.

Trading in US index futures indicated the Dow could fall 53 points at the opening bell. European stocks fell on Friday, 19 December 2008, tracking a drop in US and Asian shares, with sinking oil and metal prices hitting heavyweight energy and mining shares. Key benchmark indices in France, Germany and UK were down by between 1.41% to 2.23%.

In Asia, Japan's Nikkei average fell 0.91% as Toyota Motor declined after a newspaper report warned about an annual operating loss at the auto maker, which overshadowed a rate cut announced by the Bank of Japan. The central bank lowered its key policy rate to 0.1% from 0.3% and took other steps to ease corporate credit strains, as sharp yen rises and crumbling global demand hit an economy already in recession.

Uncertainty about the fate of the troubled US automakers weighed on other Asian stocks. Hong Kong's Hang Seng was down 2.39%, Taiwan Weighted index was down 0.01% and Singapore's Straits Times was down 0.48%. But key benchmark indices in China, and South Korea were up by between 0.14% to 0.43%.

Closer home, a sharp fall in inflation has raised the prospect of deeper interest rate cuts in coming weeks. Lower interest rates may revive the economy over the medium term. Inflation based on the wholesale price index rose 6.84% in the 12 months to 6 December 2008, below the previous week's annual rise of 8%, data released by the government during trading hours on Thursday, 18 December 2008, showed.

In a second stimulus package to boost growth, the government is likely to provide sops to the automobile, housing and steel sectors. As per reports, the committee of secretaries (CoS) on economic crisis is examining proposals like increasing the limit for low interest-rate housing loans from Rs 20 lakh to Rs 30 lakh, increasing the tax rebate on home loans, reducing car and two-wheeler loan rates by 2% (from the current 12-14%), increasing depreciation and ensuring faster disbursal of central value added tax (Cenvat) credit for the steel sector.

The first stimulus package unveiled by the government on Sunday, 7 December 2008, involved Rs 20,000 crore in additional government expenditure, an across-the-board 4% excise duty cut amounting to Rs 8,700 crore and benefits worth Rs 2,000 crore for exporters.

The new package could also include monetary measures such as cuts in the cash reserve ratio (CRR) and statutory liquidity ratio (SLR) by the Reserve Bank of India (RBI). CRR, down to 5.5% from 9% in August 2008, impounds cash with RBI while SLR mandates banks to keep a specified proportion of their deposits in government securities.

The BSE 30-share Sensex was up 23.48 points, or 0.23%, to 10,099.91. At the day's low of 9,987.42, the Sensex fell 89.01 points in mid-afternoon trade. The Sensex rose 112.11 points at the day's high of 10,188.54 hit in late trade.

The S&P CNX Nifty was up 16.75 points, or 0.55%, to 3,077.50.

Buying by foreign funds this month has helped market sentiment. Foreign funds bought a net Rs 1,626.90 crore of equities this month till, 18 December 2008. From a recent low of 8,739.24 on 2 December 2008, the Sensex has jumped 1,360.67 points or 15.56% in last nine trading sessions.

But the barometer index is down 10,187.08 points or 50.21% in the calendar year 2008 so far from its close of 20,286.99 on 31 December 2007. It is 11,106.86 points or 52.37% below its all-time high of 21,206.77 struck on 10 January 2008.

The BSE clocked a turnover of Rs 5,052 crore today, marginally lower than Rs 5,095.54 crore on 18 December 2008.

Nifty December 2008 futures were at 3085, at a premium of 7.5 points as compared to the spot closing of 3077.50. Turnover in NSE's futures & options (F&O) segment was Rs 50,670.28 crore, lower than Rs 54,607.11 crore on Thursday, 18 December 2008.

The BSE Realty index (up 10.57%), the BSE Auto index (up 1.79%), the BSE Consumer Durables index (up 1.59%), the BSE HealthCare index (up 1.55%), the BSE Power index (up 1.01%), the BSE FMCG index (up 0.97%), the BSE PSU index (up 0.85%), the BSE Capital Goods index (up 0.79%), the BSE Teck index (up 0.69%) outperformed the Sensex.

The BSE Oil & Gas index (down 0.63%), the BSE IT index (up 0.08%), the BSE Metal index (up 0.12%), the BSE Bankex (up 0.2%) underperformed the Sensex.

The market breadth, indicating the overall health of the market, was strong. On BSE, 1,482 shares rose as compared with 1,033 that declined. 84 shares remained unchanged.

Reliance Infrastructure, Jaiprakash Associates, Hindustan Unilever, Tata Steel & Reliance Communications rose by between 2.66% to 6%.

ACC, NTPC, ITC and Hindalco Industries fell by between 0.46% to 2.33%.

India's largest private sector company by market capitalization and oil refiner Reliance Industries (RIL) fell 0.81% to Rs 1,349.25 as investors worried about the impact of lower crude prices on its earnings.

Oil exploring firms ONGC and Cairn India fell between 3.23% to 4.26% as crude oil prices tumbled. Oil slumped 9% to trade at $36 a barrel on Thursday, 18 December 2008, its lowest since June 2004 as slumping demand and swelling US inventories offset a record production cut announced by the Organization of the Petroleum Exporting Countries (Opec).

But the sharp slide in oil price boosted PSU OMCs. BPCL, HPCL and Indian Oil Corporation rose by between 1.86% to 4.49%. Lower oil prices will reduce under-recoveries at the state-run oil firms on domestic sale of petrol, diesel, LPG and kerosene at a controlled price.

Banking stocks were choppy caught between concerns of rising defaults in a weakening economy and hopes falling bond yields and lower rates would accelerate loan growth and profitability. India's largest commercial bank State Bank of India (SBI) fell 0.63% to Rs 1288. The stock swung between a low of Rs 1267.65 and a high of Rs 1325.

India's second largest private sector bank by net profit HDFC Bank fell nearly 1% to Rs 1050. The stock swung between a low of Rs 1032.20 and a high of Rs 1083.40.

India's largest private sector bank by net profit ICICI Bank rose 0.13% to Rs 471.95. The stock hit a low of Rs 456 and a high of Rs 477.50. ICICI Bank today said joint managing director Chanda Kochhar would succeed Chief Executive K.V. Kamath who retires in April 2009. Kamath, chief executive since 1996, will become non-executive chairman from May 2009 replacing N. Vaghul who retires.

Canara Bank surged 6.17% after a block deal of six lakh shares was executed on BSE at Rs 193 per share.

Oriental Bank of Commerce gained 3.94% after a block deal of 12.27 lakh shares was executed on NSE at Rs 155.50

The Reserve Bank of India (RBI) on 6 December 2008, announced a 100-basis point cut in the repo rate and the reverse repo rate each. Repo rate is the rate at which RBI lends to commercial banks and reverse repo rate is the rate at which RBI accepts deposits from banks.

Rate sensitive real estate shares surged on hopes lower rates will spur housing demand. Unitech, DLF and Indiabulls Real Estate rose by between 10.8% to 16.14 %. Home purchases by home buyers are largely through finance.

Autos, which have been beaten down sharply on falling demand, rose on hopes lower rates and falling oil prices would bring buyers back. Maruti Suzuki India, Tata Motors and Mahindra & Mahindra rose by between 2.49% to 4.23%. Recent reports that a likely second government stimulus package for the economy will include a reduction in interest on car and two-wheeler loans by 2%, also aided the rally in auto stocks.

IT stocks dropped after India's second largest IT exporter by sales Infosys' chief executive on Wednesday said the Indian IT industry will go through a slow phase of growth for some time. India's largest IT exporter by sales Tata Consultancy Services slipped 0.6%. India's fourth largest IT exporter by sales Wipro fell 0.3%. But Infosys rose 0.74%.

Satyam Computer Services fell 3.87% as its ADR slipped 3.86% overnight. The stock had gained 7.15% on Thursday after the company said its board will meet on 29 December 2008 to consider buyback of shares, a move aimed at boosting investor confidence. The stock had slumped 30.22% to Rs 158.05 on Wednesday 17 December 2008 after it called off a deal to buy Maytas Properties and Maytas Infra, the two firms promoted by the family of promoter and chairman Ramalinga Raju bowing to investor pressure.

IT stocks fell despite a weaker rupee. The Indian rupee pulled back from a 1-1/2 month peak on Friday. The partially convertible rupee was at 47.06/09 per dollar, 0.2 % weaker than Thursday's close of 46.95/96. It hit an intraday high of 46.88 on Thursday, its highest since 5 November 2008. A weaker rupee augurs well for the sector as IT firms earn most of their revenues from exports.

Airliners rose on expectation recent cuts in jet fuel prices by state-run oil firms would boost margins. Jet Airways, Kingfisher Airlines and SpiceJet rose by between 6.68% to 16.86%. Jet fuel makes up almost half of an airline's operating costs.

Infrastructure stocks rose on the government's effort to boost the infrastructure sector. Gammon India, Nagarjuna Construction Company, Era Infra Engineering, Hindustan Construction Company, Larsen & Toubro rose by between 0.01% to 12.43%. Government had 7 December 2008 had announced a slew of measures to prop up the sector.

Marg was locked at 5 % upper limit at Rs 55.70 on entering into a pact with a Singapore-based firm.

Gremach Infrastructure Equipments & Projects was locked at upper limit of 5% at Rs 28.50 extending recent gains, ahead of a board meeting today, 19 December 2008 to consider rights issue.

C & C Constructions jumped 9.22% after a consortium of the company bagged an order worth Rs 781 crore.

The government hopes to precipitate infrastructure projects worth Rs 100,000 crore through faster clearances of public-private partnership projects, and ensure their easier financing by way of a tax break on fund raising by the India Infrastructure Finance Company, a specialist lender to the infrastructure sector. The government has allowed India Infrastructure Finance Company (IIFCL) to raise Rs 10,000 crore by issuing tax-free bonds.

IIFCL will use these funds to refinance bank lending of longer maturity to infrastructure projects, especially in highways and port sectors.

Shipping stocks rose on recent reports government may bail out the shipping sector from rising cost of borrowings by providing 2-3% interest subsidy. Shipping Corporation of India, Essar Shipping and GE Shipping Company rose by between 3.03% to 4.89%.

Pyramid Saimira Theatre soared 16.36% extending gains for the fifth trading session in a row, after its promoter raised stake in the company through open market purchases.

Sun TV Network rose 2.63%, extending gains for the second day in a row, after a block deal of 1.02 crore shares was executed on BSE at Rs 145 per share.

Country Club India gained 0.8% on BSE, extending gains for the fourth day in row, ahead of a board meeting to consider rights issue of equity shares.

KEC International rose 4.92% on bagging an overseas order worth Rs 88 crore.

BGR Energy Systems galloped 11.77% after the company secured credit lines worth Rs 2105 crore to fund its working capital requirements for a power project at Tamil Nadu.

PTC India moved up 2.58% on reports the company is planning to set up a $1 billion offshore fund to finance power projects in India.

Titan Industries rose 3.02% on company's plan to consider raising Rs 50 crore by issuing debentures to Life Insurance Corporation of India.

Man Industries (India) jumped 10.07% after the company said its board will meet on 26 December 2008 to consider buying back foreign currency convertible bonds.

Wockhardt galloped 3.02% on reports the company has put on block two overseas subsidiaries to raise money to repay debt

Unitech clocked the highest volume of4.25 crore shares on BSE. Reliance Natural Resources (2.84 crore shares), Suzlon Energy (2.51 crore shares), GVK Power & Infrastructure (2.03 crore shares) and Housing Development & Infrastructure (1.23 crore shares) were the other volume toppers in that order.

Reliance Industries clocked the highest turnover of Rs 357.61 crore on BSE. DLF (Rs 298.38 crore), Reliance Capital (Rs 272.53 crore), Housing Development & Infrastructure (Rs 202.15 crore) and State Bank of India (Rs 195.70 crore) were the other turnover toppers in that order.

US stocks fell for the second day on Thursday after Standard & Poor's threatened to strip General Electric of its 'AAA' credit rating and slumping oil prices crippled energy shares. The Dow Jones industrial average tumbled 219.35 points, or 2.49%, to end at 8,604.99. The Standard & Poor's 500 Index dropped 19.14 points, or 2.12%, to 885.28. The Nasdaq Composite Index fell 26.94 points, or 1.71%, to 1,552.37.