Nifty regains 3,000 level; turnover low

Buying in bluechip shares in the interest rate sensitive banking, auto and realty sectors propelled the key benchmark indices higher on the first day of the new calendar year 2009. The BSE 30-share Sensex advanced 256.15 points, or 2.66%. The S&P CNX Nifty settled above the psychological 3,000 mark. The market breadth was strong on buying momentum for small and mid-cap stocks. All the BSE sectoral indices logged gains. However turnover was low

Hopes of further fall in interest rates, a likely fuel price cut, an expected second economic stimulus package from the government and firm US markets overnight boosted the domestic bourses. The market remained in green throughout the trading session.

Stocks shrugged off weak economic data. Exports dipped 9.9% in November 2008 to $11.5 billion, a second consecutive monthly drop as the global slowdown slashes demand, data released by the government during trading hours today, 1 January 2009, showed.

The trade deficit narrowed to $10.07 billion in November 2008 compared with $10.54 billion in October 2008. Imports were up an annual 6.1% at $21.57 billion in November 2008, while oil imports rose 11.9% during November 2008 from a year earlier to $7.25 billion, government data showed.

On the bourses, a rally in mid-morning trade was followed by a small correction in early afternoon trade. The market recovered from lower level in afternoon trade. It later cut gains. A recovery in index heavyweight RIL from lower level and rebound in IT pivotals from intra-day lows propelled key benchmark indices to day's high in mid- afternoon trade. Across the board buying demand propelled market further higher in late trade.

A further fall in inflation will provide room for the Reserve Bank of India to further cut interest rates. Inflation, measured by wholesale price index, fell to around 10-month low to 6.38% in the week ended 20 December 2008 from 6.61% in the previous week, data released by the government today, 1 January 2009 showed.

Expectations of cut in interest rates by the central bank have strengthened after the central bank governor D. Subbarao met Prime Minister Manmohan Singh on Monday, 29 December 2008. Budget constraints are forcing India to rely more on interest-rate cuts to buoy the economy. However, hopes for hefty rate cuts suffered a blow after a television channel on Wednesday, 31 December 2008, quoted finance ministry officials as saying rate reductions may not be steep.

The market, meanwhile, is also awaiting a second government stimulus package for the economy. Planning Commission Deputy Chairman Montek Singh Ahluwalia on Monday, 29 December 2008, said the government will come out with a second stimulus package for this fiscal and another package for fiscal year 2009-10 in the next few days to spur economic growth.

With industrial production contracting by 0.4% in October 2008, for the first time in 15 years, and the exports declining by over 12% during the month, the government came out with a stimulus package on 7 December 2008 to spur growth and help the industry combat the impact of global financial meltdown. As part of the stimulus package, the government cut excise duty by 4% across the board, except on petroleum products, and announced raising of the public expenditure by Rs 20,000 crore to boost demand.

As per recent reports, the government is likely to revise prices of petroleum products in a couple of weeks. Media reports quoted Petroleum Minister, Murali Deora, on Tuesday, 30 December 2008, as saying that the government is weighing all options to cut prices in line with the international prices.

All the key Asian & European markets were closed today for the new year day holiday. US stocks advanced on Wednesday, 31 December 2008 as the US Federal Reserve provided clarity on its plan to reduce mortgage costs and set a goal to buy $500 billion in mortgage-backed securities by mid-2009. The Dow Jones industrial average gained 108 points, or 1.25%, to 8,776.39. The Nasdaq Composite index increased 26.33 points, or 1.70%, to 1,577.03. The Standard & Poor`s 500 index climbed 12.61 points, or 1.42%, to 903.25.

The BSE 30-share Sensex advanced 256.15 points, or 2.66%, to 9,903.46. The Sensex opened 71.90 points higher at 9,719.21. At the day's high of 9,921.70, the Sensex surged 274.39 points in late trade. The Sensex gained 64.33 points at the day's low of 9,711.64 in early trade.

The S&P CNX Nifty gained 74.30 points, or 2.51%, to 3,033.45. The last time the Nifty had closed above the 3,000 mark was on 22 December 2008. Nifty January 2009 futures were at 3040.50, at a premium of 7.05 points as compared to the spot closing.

The BSE Sensex has risen 574.74 points or 6.15% from its recent low of 9328.92 on 26 December 2008. The barometer index lost 10639.68 points or 52.44% in the calendar year 2008, on global financial crisis. Nifty lost 3179.45 points or 51.79% in 2008.

The BSE Sensex had seen a sustained bull run during five years from 2002 to 2007, gaining 47.10% in 2007, 46.7% in 2006, 42.3% in 2005, 13.1% in 2004, 73% in 2003 and 3.52% in 2002.

The market breadth, indicating the overall health of the market, was strong on BSE with 2000 shares advancing as compared with 513 that declined. 62 shares remained unchanged.

The BSE Mid-cap index gained 2.60% to 3,319.10, underperforming the Sensex. The BSE Small-Cap index rose 3.46% to 3,810.41, outperforming the Sensex.

However, turnover was lower today. The total turnover on the BSE amounted to Rs 3076 crore, much lower than Rs 3746 crore yesterday, 31 December 2008. Turnover in NSE's futures & options (F&O) segment was Rs 22,397.66 crore, lower than Rs 30,033.26 crore on Wednesday, 31 December 2008.

All the BSE sectoral indices logged gains. The BSE Auto index (up 3.12%), the BSE Realty index (up 0.41%), the BSE Capital Goods index (up 4.73%), the BSE Teck index (up 3.17%), the BSE IT index (up 3.83%), the BSE Power index (up 2.94%), the BSE PSU index (up 3.23%), the BSE Metal index (up 6.02%), outperformed the Sensex.

The Bankex (up 2.39%), the BSE FMCG index (up 0.23%),the BSE Consumer Durables index (up 2.23%), the BSE HealthCare index (up 0.82%), and BSE Oil & Gas index (up 1.82%), underperformed the Sensex.

Ranbaxy was the lone loser from the 30-member Sensex pack. India's largest pharma company by sales lost 1.13% to Rs 249.55 on profit booking after a 16.69% surge in one week to 31 December 2008.

Auto shares rose on recent reports the government is likely to remove an additional excise duty of Rs 10,000-20,000 on large cars and sports-utility vehicles as part of the package for the automobile industry which is facing downturn in sales for want of cheap retail credit.

India's largest truck maker by sales Tata Motors galloped 10.78% to Rs 176.20 and was the top gainer from the Sensex pack.

India's top small car maker by sales, Maruti Suzuki India rose 6.53% to Rs 554.05, recovering from an intra-day low of Rs 515.10, even its sales declined 10% to 56293 units in December 2008 from December 2007. The company announced the monthly sales data during trading hours today.

Bajaj Auto (up 4.81% Rs 410), and Mahindra & Mahindra (up 3.33% to Rs 284), were the other gainers from the auto pack.

India's second largest cellular services provider by sales Reliance Communications (RCom) jumped 8.10% to Rs 245.65. During trading hours on Tuesday, 30 December 2008, RCom announced a nationwide rollout of GSM-based cellular services. GSM services would be available in 24,000 towns within a few months, RCom said positioning it to better take on Bharti Airtel. India's largest cellular services provider by sales Bharti Airtel rose 0.27% to Rs 717, off day's low of Rs 709

India's largest private sector company by market capitalization and oil refiner Reliance Industries (RIL) advanced 1.76% to Rs 1251.95, off the day's low of Rs 1235. A 14% jump in crude oil prices on Wednesday, 31 December 2008, has eased worries about pressure on RIL's refining margins. Crude oil prices have declined sharply over the past few months.

Oil exploration stocks surged after light, sweet crude for February 2009 delivery jumped $5.57 or 14% to $44.60 a barrel on the New York Mercantile Exchange on Wednesday, 31 December 2008. India's biggest state-run oil exploration firm by market capitalisation, Oil & natural Gas Corporation rose 2.60% to Rs 685 and Cairn India gained 0.12% to Rs 172.22

State run oil marketing firms were mostly in the red as the sharp surge in oil prices raised concerns of a higher subsidy burden. HPCL (down 2.82%), and BPCL (down 3.92%) slipped. However IOC gained 0.88% to Rs 430, off day's low of Rs 418. The state-run oil firms are making profit on sale of petrol and diesel thanks to a sharp fall in global crude oil prices over the past few months. But they continue to make losses on sale of LPG and kerosene at a controlled price.

Banking shares advanced on speculation falling bond yields and lower rates would accelerate loan growth and profitability. India's largest private sector bank by net profit ICICI Bank gained 3.71% to Rs 465 after it cut its main lending rates by 50 basis points from Wednesday, 31 December 2008

India's second largest private sector bank by net profit HDFC Bank rose 1.25% to Rs 1010.05. India's biggest bank in terms of total assets and branch network, State Bank of India, vaulted 1.84% to Rs 1312.

Realty shares rose on hopes of further sops in the second government stimulus package to boost the ailing sector. DLF (up 3.76% to Rs 292.50), Housing Development & Infrastructure (up 8.66% to Rs 141.20), and Indiabulls Real Estate (up 21.46% to Rs 159.30), edged higher.

IT pivotals gained on hopes the recent government stimulus packages may help revive the US economy. India's second largest IT exporter by sales Infosys rose 2.88% to Rs 1150, off day's low of Rs 1111.05. India's third largest IT exporter by sales Wipro rose 3.40% to Rs 241.45, after touching an intra-day low of Rs 233.35. IT firms derive over 50% of their revenues from the US.

India's largest IT exporter by sales Tata Consultancy Services rose 3.80% to Rs 496.25 on reports the company is likely to win two large BPO contracts estimated at $512 million following its acquisition of Citigroup Global Services in late 2008.

India's fourth largest IT exporter by sales Satyam Computer Services advanced 8.05% to Rs 183.85 on reports some of the big names in corporate India including the Anil Dhirubhai Ambani Group (ADAG), Mahindra British Telecom, L&T Infotech, are in in talks with some leading private equity funds - Texas Pacific, General Atlantic Partners and Carlyle to team up to acquire a strategic stake in Satyam.

ABM Knowledgeware was locked at 20% upper limit at Rs 16.52 after the company secured a contract worth Rs 116 crore. The company announced the contract win after trading hours on Wednesday, 31 December 2008.

The rupee was slightly weaker 48.73/74 per dollar from previous close of 48.70/72 on Wednesday, 31 December 2008 as stock markets rose. A weak rupee boost operating margins of IT firms as IT firms derive a lion's share of revenue from exports.

India's largest engineering and construction company by sales Larsen & Toubro extended early gains and closed 6.43% higher at Rs 824.20 on hopes lower interest rates would keep order flows strong and aid project funding. L&T, today, 1 January 2009, named Ravi Uppal, former head of global markets and member of the group executive committee of the ABB Group, as the managing director and chief executive officer its unit L&T Power.

India's largest power equipment maker by sales Bharat Heavy Electricals (Bhel) advanced 2.76% to Rs 1400 on a recent large order win. The company said on Friday, 26 December 2008, it had secured a Rs 5,040-crore contract from Jindal Power for setting up 2,400 megawatt power plant in Chhatisgarh.

India's largest power generation firm by sales, NTPC was up 0.55% to Rs 182 after the company said its second 500 megawatt super thermal power project at Sipat, Chhattisgarh, commenced commercial operation from today, 1 January 2009.

Metal shares advanced on firm prices on the London Metal Exchange. India's largest copper producer by sales Sterlite Industries jumped 5.77% to Rs 275.55. Its American depository receipt (ADR) gained 3.76% on Wednesday.

Tata Steel (up 5.65% to Rs 229.10), Steel Authority of India (up 7.55% to Rs 83.30), and Hindalco Industries (up 4.65% to Rs 54.05), edged higher.

Infrastructure shares rose on reports enhanced infrastructure spending is likely to be a priority of the forthcoming second government stimulus package for the economy. GVK Power & Infrastructure (up 6.29%), Punj Lloyd (up 4.96%), Reliance Infrastructure (up 6.76%), Jaiprakash Associates (up 5.78%), galloped.

Sugar firms rose on buzz a shortfall in production will drive prices higher. Bajaj Hindusthan (up 2.49% to Rs 74.55), Balrampur Chini Mills (up 4.42% to Rs 52), and Shree Renuka Sugars (up 1.56% to Rs 74.65), advanced.

Satyam Computer Services was the top traded counter on BSE with turnover of Rs 231.57 crore followed by Reliance Industries (Rs 148.82 crore), Reliance Communications (Rs 136.18 crore), Reliance Petroleum (Rs 113.18 crore) and Reliance Natural Resources (Rs 108.61 crore).

Unitech led the volume chart on BSE clocking volume of 1.98 crore shares followed by Reliance Natural Resources (1.84 crore), Suzlon Energy (1.49 crore), Satyam Computer Services (1.30 crore) and Reliance Petroleum (1.25 crore).

Among the small and mid-cap stocks, Noida Toll Bridge (up 23%), Austin Engineering (up 20%), Cords Cable (up 20%), ISMT (up 20%), Nocil (up 20%), Shashun Chemicals (up 20%), HFCL (up 20%), Alps Industries (up 20%), Bag Films (up 19.95%), HOCL (up 19.94%), DCW (up 19.94%), Deep Industries (up 19.93%), surged.

Elecon Engineering Company was locked at 5% upper limit at Rs 39.95 on bagging an order worth Rs 22 crore. The company announced the new order win after trading hours on Wednesday, 31 December 2008.

PTC India rose 0.29% to Rs 69 on reports the company is looking to buy coal mines abroad. PTC India will reportedly set up a 50:50 joint venture with Singapore-based firm Asian Infratech for identifying and acquiring companies overseas.

The Centre's fiscal deficit till November 2008 has surpassed the budget estimates for the entire 2008-09 by 32% and may deteriorate further with the government increasing public expenditure and reducing taxes to battle slowdown. Fiscal deficit stood at Rs 1,76,510 crore at the end of November 2008, against the Rs 1,33,287 crore target for the current fiscal as revenues dwindled and expenditure, particularly non-plan, soared, the figures released by the Controller General of Accounts (CGA) on Wednesday, 31 December 2008 stated.