Sensex, Nifty outperform global peers

Shrugging off a dismal industrial production data and failure of the plan to rescue US auto makers, key benchmark indices edged higher as index heavyweight Reliance Industries (RIL) staged a sharp comeback from early slump. Volatility was high. The BSE 30-share Sensex rose 44.61 points and 0.46%, recovering 408.18 points from the day' low. The domestic boures outperformed their global peers.

The BSE Sensex had fallen 339.89 points or 3.65% to 9,305.47 in early afternoon trade following a dismal industrial production data and on failure of the plan to rescue US auto makers.

Buying by foreign funds this month has lifted sentiments. Foreign funds have bought shares worth Rs 2,048.70 crore, till 11 December 2008. They are net sellers of Rs 52,688.50 crore in calendar 2008, so far.

Foreign institutional investors (FIIs) were net sellers worth Rs 16.52 crore while mutual funds bought shares worth Rs 325.81 crore today, 12 December 2008, according to provisional data on NSE.

A likely second fiscal stimulus package by the government also aided the rebound. Commerce Minister Kamal Nath yesterday, 11 December 2008 said the government is working on a second package aimed at generating employment and ensuring that the credit needs of the companies are met.

The package assumes significance as the World Bank in its report on 10 December 2008 expressed fears of a deeper and prolonged slowdown which may pull down the global economic growth to less than 1% in 2009. Also many of the developed nations like the US, Japan and some countries in the Eurozone are already in recession and India is witnessing the ripple effects of the global slowdown.

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 market was volatile right from the onset of the trading session. The Sensex swung 463.62 points between the day's high and low. The market had cut losses in early trade after an initial sell-off triggered by the collapse of the US auto bailout. The intraday recovery was short-lived as the market weakened again in morning trade. The market cut losses later. It weakened in early afternoon trade again following dismal industrial production data for October 2008, before recovering from lower level helped by rebound in index heavyweight RIL. The market moved into positive zone in mid-afternoon trade as RIL extended gains.

India's industrial production declined 0.4% in October 2008, as compared to an upwardly revised 5.5% growth in September 2008, data released by the government today, 12 December 2008, showed. Manufacturing production fell 1.2% in October 2008 from a year earlier.

The US Senate failed on Thursday night to reach a last-ditch compromise to bail out automakers, effectively killing any chance of congressional action this year. Trading in US index futures indicated the Dow could fall 320 points at the opening bell.

Asian and European stocks slumped as the collapse of the US Senate's $14 billion auto bailout plan threatened to deepen the global economic slump. In Asian, key indices in China, Hong Kong, Japan, Singapore, South Korea, and Taiwan were down by between 3% and 5.48%. In Europe, key benchmark indices in Germany, France and UK were down by between 4.18% and 5.48%, in Europe.

The White House said it would evaluate its options in light of the collapse of the auto sector bailout legislation. The Bush administration has resisted Democrats' past demands to use some money from the $700 billion bailout package approved in October 2008 to help struggling financial institutions to help the automakers.

The US auto industry is reeling from depressed sales, made worse by the credit crunch and the recession. General Motors (GM) and Chrysler have warned of near-term collapse if they did not receive a government bailout. A failure of any one of the three US automakers - GM, Ford or Chrysler, would threaten countless jobs and reverberate not only through the global supply chain but in financial markets as well

The BSE 30-share Sensex rose 44.61 points and 0.46% to 9,690.07. At the day's high of 9,745.51, the Sensex rose 100.05 points in late trade. At the day's low of 9,281.89, the Sensex lost 363.57 points in early trade.

The S&P CNX Nifty gained 1.2 points or 0.04% at 2,921.35. Nifty December 2008 futures were at 2910.25, at a discount of 11.5 points as compared to the spot closing.

The barometer index BSE Sensex is down 10596.92 points or 52.23% in the calendar year 2008 so far from its close of 20,286.99 on 31 December 2007. It is 11516.70 points or 54.30% below its all-time high of 21,206.77 struck on 10 January 2008.

The total turnover on the BSE amounted to Rs 4471 crore as compared to Rs 4,638.42 crore on Thursday, 11 December 2008. Turnover on NSE's futures & options (F&O) segment increased to Rs 41,078.17 crore from Rs 38,606.17 crore on Thursday, 11 December 2008.

The market breadth, indicating the overall health of the market, was strong in contrast to a weak breadth earlier in the day. On BSE, 1391 shares rose as compared with 889 that advanced. 89 shares remained unchanged.

The BSE Realty index (up 3.94%), the Bankex (up 1.20%), BSE Oil & Gas index (up 2.34%), BSE Consumer Durables index (up 2.93%), outperformed the Sensex.

The BSE Auto index (down 0.01%), the BSE Metal index (up 0.23%), the BSE Teck index (down 1.70%), the BSE IT index (down 2.88%), the BSE HealthCare index (down 0.32%), the BSE Capital Goods index (up 0.25%), the BSE Power index (up 0.14%), the BSE FMCG index (up 0.05%), and the BSE PSU index (down 0.05%), underperformed the Sensex.

Among the 30-member Sensex pack, 20 declined while the rest gained. Tata Motors (down 3.39% to Rs 155.10), Bharti Airtel (down 1.93% to Rs 728), and HindustanUnilever (down 1.43% to Rs 238), edged lower from the Sensex pack.

HDFC (up 2.59% to Rs 1648.95), Hindalco (up 3.70% to Rs 53.20), and Jaiprakash Associates (up 1.99% to Rs 84.40), edged higher from the Sensex pack

India's largest private sector company by market capitalization and oil refiner Reliance Industries (RIL) jumped 4% to Rs 1313.20, recovering sharply from day's low of 1212.60. On Thursday, 11 December 2008, the government withdrew an affidavit filed in the Bombay High Court wherein it had asserted that RIL cannot sell its Krishna-Godavari basin gas to anyone without its approval to the pricing formula. In its affidavit filed last month, the government had also said that RIL could not sell KG basin gas at a price less than $4.20 per million British Thermal Units.

The withdrawal came following insistence by Anil Dhirubhai Ambani Group (ADAG) firm Reliance Natural Resources (RNRL)'s counsel Ram Jethmalani to cross-examine the government on the issue. RNRL rose 0.65% to Rs 55.10. While the government approved price of gas for KG basin is $4.20 per million British Thermal Units (mBTU), RNRL is seeking the gas at $2.34 mBTU.

Other Anil Dhirubhai Ambani Group (ADAG) firms - Reliance Infrastructure (up 6.53% to Rs 644), and Reliance Communications (up 4.06% to Rs 248.90) rose.

Banking shares moved in positive zone from negative zone in late trade on hopes of further interest rate cuts to shield the weakening economy from a global recession after industrial production fell for the first time in 15 years.

India's top private sector bank by net profit ICICI Bank rose 1.19% to Rs 411.10, after touching a low of Rs 382. State Bank of India (up 0.74% to Rs 1207, off day's low of Rs 1142.60), and HDFC Bank (up 0.29% to Rs 920, off day's low of Rs 880), gained.

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.

Real estate shares cut early losses on hopes housing demand will improve in a soft interest rate regime. India's top real estate developer by market capitalisation DLF jumped 7.15% to Rs 275, recovering from the session's low of Rs 236.90. It was the top gainer from the Sensex pack.

Unitech (down 0.72% to Rs 34.40, off day's low of Rs 31.20), Indiabulls Real Estate (down 2.26% to Rs 125.70, off day's low of Rs 118.25), and Akruti City (down 1.69% to Rs 642, off day's low of Rs 638), though in the red, cut intraday losses.

As per reports, home loan interest rates are set to be cheaper as public sector banks are planning to cut rates on small-ticket home loans by up to 300 basis points.

India's second largest private sector power generation firm by sales Tata Power rose 3.28% to Rs 755, off day's low of Rs 700. Reportedly Tata Sons is unlikely to convert over 10 million preferential warrants issued by the company 18 months ago, into equity shares, as the company's stock is currently trading around 45% lower than the conversion rate.

Auto shares rebounded from early slump triggered by weak sentiment for the sector after a proposal to bail out the US auto industry failed in a procedural vote in the Senate. India's top tractor maker by sales Mahindra & Mahindra rose 1.29% to Rs 290, rebounding sharply from day's low of Rs 262. The early fall came after the company's farm equipment unit announced a cut in production, due to slackening demand. The company announced the production cut after trading hours on Thursday, 11 December 2008.

India's biggest small car maker by sales Maruti Suzuki India recovered from low of Rs 465.60 and settled 0.35% higher at Rs 512

Down 3.39% Rs 155.10, Tata Motors, India's top truck maker by sales Tata Motors, recovered from an intraday low of Rs 147.

Auto parts maker Bosch fell 2.71% to Rs 3052.05 after the firm said it has decided to declare a lockout at its plant in Jaipur due to a strike by workers. The company announced this after trading hours on Thursday, 11 December 2008.

Outsourcing focused IT pivotals were the chief casualty for the second straight day as fears that a weak global economy would cut the amount firms spent on technology offset a weaker rupee. India's largest IT exporter by sales Tata Consultancy Services lost 4.70% to Rs 483.80 and was the top loser from the Sensex pack.

India's second largest IT exporter by sales Infosys slipped 2.64% to Rs 1106. India's third largest IT exporter by sales Satyam Computer Services slipped 0.95% to Rs 222.25. India's fourth largest IT exporter by sales Wipro shed 3.48% to Rs 241.30

The rupee was weaker at 48.60/62 per dollar, compared to Thursday's close of 48.33/34, following a decline in Asian stock markets. A weak rupee benefits IT firms as they earn most of the revenues in dollar terms.

Metal stocks declined as the news of the failed bailout of the US auto sector knocked metal and oil prices in the commodities markets. India's top copper producer by sales Sterlite Industries (India) slipped 2.48% to Rs 287.80 on profit booking after advancing 8.43% on Thursday, 11 December 2008. Its American depository receipt (ADR) rose 3.92% on Thursday, 11 December 2008.

Tata Steel (down 0.07% to Rs 217.70), Sesa Goa (down 2.23% to Rs 78.75), Nalco (down 8.31% to Rs 179.75), and JSW Steel (down 6.49% to Rs 223.75), slipped.

India's largest oil exploration firm by market capitalisation Oil and Natural Gas Corporation (ONGC) was down 3.02% to Rs 644.70 as oil prices fell. US crude prices fell by nearly $2 to $46.11 a barrel.

Reliance Industries was the top traded counter on BSE with turnover of Rs 499.35 crore followed by Reliance Natural Resources (Rs 300.30 crore), Reliance Capital (Rs 299.50 crore), DLF (Rs 207 crore) and Reliance Infrastructure (Rs 185.50 crore).

Reliance Natural Resources led the volumes chart on BSE clocking volumes of 5.37 crore shares followed by IFCI (1.87 crore shares), Suzlon (1.75 crore shares), Unitech (1.50 crore shares) and Reliance Petroleum (1.41 crore shares).

State-run oil marketing firms advanced on reports the government is considering a proposal to de-regulate the pricing of petrol and diesel.

HPCL (up 6.67% to Rs 239), BPCL (up 8.79% to Rs 352.55), and IOC (up 2.44% to Rs 386.20), gained.

The proposed deregulation of fuel prices, will provide full freedom to oil companies to set petrol and diesel prices.

Fertliser shares rallied on recent reports of government giving bonds worth Rs 10,000 crore to 23 fertiliser companies.

Deepak Fertiliser (up 4.94%), Nagarjuna Fertiliser (up 5.26%), Chambal Fertiliser & Chemicals (up 3.84%), RCF (up 2.80%), and Coramandel Fertiliser (up 2.64%), surged.

Reportedly the government on 11 December 2008 issued special bonds worth Rs 10,000 crore of coupon rate 7% to 23 fertiliser companies as compensation for subsidising prices in the current financial year.

Tulip Telecom galloped 17% to Rs 507 after a bulk deal of 4 lakh shares was struck on the counter at Rs 433.95 at 10:02 IST on BSE

Nitin Fire Protection Industries galloped 18.02% to Rs 196.80 after it bagged an order worth Rs 2.3 crore. The company announced the order win during trading hours today, 12 December 2008.

Ruchi Soya Industries surged 5.15% to Rs 25.50 after a block deal of 41.60 lakh shares was executed on BSE at Rs 23.30 per share. The block deal constituted 2.13% of the company's equity.