Sensex jumps 3% on US government aid for Bank of America

Index heavyweight Reliance Industries (RIL) led a rally on the bourses triggered by the US government rescue of the largest US bank by assets, Bank of America. Optimism that the US government will act to prevent the year-long recession from deepening also aided the surge on the domestic bourses. The BSE 30-share Sensex gained 276.85 points or 3.06%. RIL rose nearly 7%. The market was in green throughout the day.

However, foreign funds dumped stocks today, 16 January 2009, even as domestic funds bought. As per the provisional data released by the stock exchanges after trading hours, foreign funds sold shares worth a net Rs 585.41 crore. Domestic funds bought shares worth a net Rs 400.73 crore.

A bout of volatility was witnessed mid-afternoon trade when after a sudden fall the market immediately staged a rebound. A government official said the Reserve Bank of India (RBI) is unlikely to cut key policy interest at its monetary policy review later this month, causing the sudden slide.

Falling inflation has raised expectations that the central bank may further cut interest rates to soften the impact of the global financial crisis and economic recession in key world economies on the Indian economy. The Reserve Bank of India (RBI) has substantially eased monetary policy over the past few months.

European markets opened firm today, 16 January 2009, snapping a seven-session losing run, following a late rally in the United States on Thursday, 15 January 2009. Key benchmark indices in France, Germany and UK were up by between 1.86% and 2.73%.

Asian stocks surged on news of US government aid for Bank of America. In Japan, the Nikkei 225 average jumped 2.58%. Key benchmark indices in China, Singapore, Hang Seng, South Korea, and Taiwan were up by between 0.09% and 2.15%.

Trading in US index futures indicated the Dow could rise 118 points at the opening bell on Friday, 16 January 2009

US stocks ended slightly higher on Thursday, 15 January 2009, recovering from an early slump, amid optimism the government will act to prevent the year-long recession from deepening, offsetting news that Bank of America was seeking fresh government aid, which fueled worries about the health of the financial sector. The Dow Jones Industrial Average rose 12.67 points, or 0.15%, to 8,212.81. The S&P 500 Index gains 1.12 points, or 0.13%, to 843.74. The Nasdaq Composite Index rose 22.20 points, or 1.49%, to 1,511.84.

In response to indications that the recession is deepening, Democratic leaders in the US House of Representatives on Thursday unveiled an $825 billion tax cut and spending bill. After the closing bell, the US Senate rejected an attempt to block the release of the remaining $350 billion from the financial bailout fund.

As part of the emergency plan announced by the Treasury Department, the US Federal Reserve and Federal Deposit Insurance Corp, Treasury will provide Bank of America, the largest US bank by assets, with $20 billion in fresh capital from a government bailout fund in exchange for preferred stock. The government also agreed to share in losses on the troubled assets, which Bank of America took on when it paid an estimated $19.4 billion for Merrill on 1 January 2009

The European Central Bank (ECB) cut its benchmark interest rate by 50 basis points to 2% on Thursday, 15 January 2009, matching its lowest ever rate. The ECB President Jean-Claude Trichet said inflation risks continued to diminish as the economy weakened.

The BSE 30-share Sensex gained 276.85 points or 3.06% to 9,323.59. Sensex opened 78.91 points higher at 9125.65, also its day's low. The Sensex gained 295.73 points at day's high of 9,342.47 in late trade.

The S&P CNX Nifty advanced 91.75 points or 3.35% to settle at 2828.45. Nifty January 2009 futures were at 2821.50, a discount of 6.95 points compared over the spot closing.

The BSE Sensex has lost 323.72 points or 3.35% so far in 2009 from its close of 9647.31 on 31 December 2008. The barometer index had lost 10639.68 points or 52.44% in the calendar year 2008

The market breadth, indicating the overall health of the market, was positive on BSE with 1247 shares advancing as compared with 1175 that declined. 91 shares remained unchanged.

The BSE Mid-Cap index rose 0.53% at 3,026.83 and the BSE Small-Cap index gained 0.07% at 3,412.77. Both these indices underperformed the Sensex.

The total turnover on BSE amounted to Rs 2930 crore as compared to Rs 2,904.93 crore on Thursday, 15 January 2009. Turnover in NSE's futures & options segment slipped to Rs 32716.71 crore as compared to Rs 40218.44 crore on Thursday, 15 January 2009.

The BSE Capital Goods index (up 1.83%), BSE Consumer Durables index (up 0.88%), the BSE FMCG index (up 1.27%), the BSE Auto index (up 1%), BSE HealthCare index (up 0.86%), the BSE Teck index (up 2.18%), BSE IT index (up 1.03%), the BSE Bankex (up 2.42%), BSE Realty index (down 2.39%), underperformed the Sensex.

The BSE Metal index (up 3.45%), BSE Oil & Gas index (up 5.09%), the BSE PSU index (up 3.36%), the BSE Power index (up 4.29%), outperformed the Sensex.

Among the 30-member Sensex pack, 26 advanced while only 4 of them declined. Tata Power (up 5.11%), Reliance Infrastructure (up 7.30%), and ITC (up 2.20%), edged higher from the Sensex pack.

Maruti Suzuki India (down 1.31%), and Grasim (down 0.34%), edged lower from the Sensex pack.

India's largest power generation company in terms of sales NTPC jumped 7.54% to Rs 176.90 on 18.76 lakh shares. It was the top gainer from the Sensex pack. The company's board of directors at its meet held on 13 January 2009 approved investment of Rs 6,037 crore in super thermal power projects in Madhya Pradesh, Uttar Pradesh and Chattisgarh.

India's second largest private sector power generation firm by sales Tata Power Company rose 5.11% to Rs 775 after a block deal of one lakh shares was executed on NSE at Rs 758 per share. The block deal constituted 0.05% of the company's equity.

India's largest private sector company by market capitalization and oil refiner Reliance Industries (RIL) spurted 6.76% to Rs 1220.65 on 22.21 lakh shares. The stock surged after the company during trading hours on Thursday said its unit Reliance Petroleum (RPL) will start fuel exports from its new refinery this month. RPL, last month, commissioned its 5,80,000-barrels-per-day only for exports refinery at Jamnagar in Gujarat. RPL gained 2.19%

India's largest oil exploration firm by market capitalisation Oil and Natural Gas Corporation (ONGC) vaulted 3.73% to Rs 648.20 on reports the company will invest $5.3 billion in developing gas finds in two of its eastern offshore KrishnaGodavari basin blocks to produce 25 million standard cubic meters per day of gas by 2013.

State run oil marketing firms rose as crude oil prices fell. HPCL (up 2.76%), BPCL (up 1.85%), and IOC (up 2.08%), gained.

Crude prices fell on Thursday, 15 January 2009, on unemployment benefit claims in US, the world`s largest oil consumer rose and organisation of petroleum exporting countries (Opec's) expectation that oil demand will fall in 2009. Light, sweet crude for February delivery fell $1.88, to $35.40 a barrel on the New York Mercantile Exchange (NYMEX). Lower oil prices will reduce losses at the state-run oil firms on domestic sale of cooking gas and kerosene at a controlled price.

Telecom pivotals surged on bargain hunting after a recent slide. India's largest cellular services provider by sales Bharti Airtel gained 4.63% to Rs 632 after declining 6.94% in one week to 15 January 2009. India's second largest cellular services provider by sales Reliance Communications rallied 4.19% to Rs 181.55 after sliding 15.62% in a week to 15 January 2009

IT pivotals underperformed the Sensex after TCS Chief executive S. Ramadorai said market conditions are tough and on firm rupee. Shares of TCS, India's largest software services exporter by sales, fell 1.47% to Rs 502.50. Ramadorai said almost all sectors are facing stress and almost all geographies are facing problems. TCS does not give guidance and hence management comments are watched closely.

After market hours on Thursday, 15 January 2009, TCS reported 3.31%% rise in standalone net profit as per Indian GAAP to Rs 1,211.89 crore on 3.07% rise in sales to Rs 5,875.48 crore in Q3 Decmeber 2008 over Q2 September 2007. The TCS management said currency volatility had hit the growth of its revenue in Q3 December 2008.

India's third largest software services exporter, Wipro, rose 1.55% to Rs 238.95, off day's low of Rs 229. Wipro's ADR fell 1.24% on Thursday, 15 January 2009. Wipro unveils its Q3 December 2008 results on 21 January 2009.

India's second largest software services exporter Infosys Technologies rose 1.27% to Rs 1268, recovering from low of Rs 1238.60. Infosys' ADR advanced 2.72% on Thursday, 15 January 2009.

India's fourth largest software services exporter Satyam Computer Services galloped 21.92% to Rs 24.75, on high volumes of 6.14 crore shares after the member of the newly-nominated board, Deepak Parekh, said after trading hours on Thursday that Satyam had Rs 1700 crore in receivables and might not need financial help if payments arrived on time. The stock had plunged about a third on Thursday after the government said it was not considering a bailout package.

Meanwhile UK-based investment bank Lazard Asset Management sold over 1.13 crore shares of Satyam in a bulk deal on the Bombay Stock Exchange at Rs 21.71 per share on Thursday, 15 January 2009. On the same day, Lazard sold 2.44 crore shares at Rs 21.74 a piece on the National Stock Exchange. Overall, the firm has sold 5.3% out of the 7.34% it holds in Satyam.

India's fifth largest software firm by sales HCL Technologies gained 8.24% to Rs 118.25 ahead of its Q2 December 2008 results on 23 January 2009.

The Indian rupee rose today as domestic shares crept up tracking other regional markets and raised hopes for fresh capital inflows. The partially convertible rupee was at 48.77/78 per dollar, stronger than its Thursday's close of 49.03/04. A firm rupee negatively impacts operating margins of IT firms as the sector derives a lion's share from exports

Banking shares gained on hopes lower interest rates may boost lending growth and on expectations of strong Q3 December 2008 results. ICICI Bank (up 2.82%), HDFC Bank (up 1.68%), and State Bank of India (up 1.59%), rose.

Federal Bank surged 9.27% to Rs 155.65 on posting 98.1% rise in net profit to Rs 203.89 crore in Q3 December 2008 over Q3 December 2007. The results were announced during market hours today, 16 January 2009.

India's largest engineering and construction company by sales Larsen & Toubro advanced 1.46% to Rs 715.10 after it the company entered into a deal with Westinghouse Electric for 1,000 megawatt nuclear reactors in India. Westinghouse Electric is a unit of Japan's Toshiba Corp

India's top power equipment maker by sales Bharat Heavy Electricals (Bhel) rose 3.05% to Rs 1395. On 14 January 2009, the company signed a deal with Karnataka Power Corporation for constructing a 660 megawatt thermal power plant at Edlapur in Raichur district of Karnataka and two thermal units of 800 megawatt capacity each in Raichur.

Metal shares gained as copper prices rose on the commodities market. Tata Steel (up 2.50% to Rs 202.75), Hindalco (up 4.15% to Rs 50.25), and Sterlite Industries (up 2.31% to Rs 259.55), gained.

Auto shares rose on hopes lower interest rates and fall in fuel prices would spur demand for vehicles which is mainly driven by finance.

India's largest tractor maker by sales Mahindra & Mahindra (M&M) rose 0.45% to Rs 320.50. M&M, which bought a controlling stake in the Pune-based two-wheeler manufacturer, Kinetic Motors, in August 2008, plans to re-launch the Kinetic range of scooters by the end of this month.

India's largest truck maker by sales Tata Motors rose 0.50% to Rs 151.90 after its Amercian depository receipt jumped 4.40% on Thursday, 15 January 2009.

Bajaj Auto jumped 7.69% to Rs 472 on improvement in a key profit margin parameter in Q3 December 2008 over Q2 September 2008, despite adverse market conditions. The company's EBITDA (earnings before interest, tax, depreciation and amortization) margin stood at 14.5% in Q3 December 2008, higher than 13.6% in Q2 September 2008, Bajaj Auto said at the time of announcing Q3 December 2008 results during trading hours today, 16 January 2009.

India's fourth largest pharma company by market capitalisation Ranbaxy Laboratories rose marginally by 0.07% to Rs 216.15 after striking day's high of Rs 224. The company is reportedly planning to exit its Japanese joint venture - Nihon Pharmaceuticals Industry (NPI) by selling 50% stake after the Indian drug maker was acquired by Japanese drug major Daiichi Sankyo. Ranbaxy will sell the stake back to its Japanese partner Nippon Chemiphar. Ranbaxy's stake in the six-year-old joint venture is estimated at Rs 30.50 crore.

Nippon Chemiphar, a Tokyo stock exchange-listed mid-sized drug company, competes with Ranbaxy's owner Daiichi Sankyo in several therapeutic categories in the Japanese market.

The Satyam mega accounting scandal weighed on realty shares on market perception that a number of realty firms do not strictly follow good corporate governance practices. Mahindra Lifestyle (down 4.27%), Indiabulls Real Estate (down 3.34%), and Unitech (down 5.59%), edged lower.

Akruti City rose 2.52% to Rs 636.20. The National Stock Exchange after market hours yesterday, 15 January 2009 informed the open interest in the underlying security reached 90% of the specified market wide position limit in the futures & options segment.

Puravankara Projects slumped 6.03% to Rs 36.65. The stock recovered after sliding to a low of Rs 25.60 on a clarification by the company that it is not pulling out of a major project in Andhra Pradesh.

India's largest real estate firm by market capitalisation DLF slumped 3.44% to Rs 195.35 on high volumes of 42.93 lakh shares. As per recent reports the company is planning to turn down its special economic zone (SEZ) plans, battered by low demand for real estate. The company is planning to start five of its SEZs after 2010 when demand revives.

Hindustan Construction Company tumbled 11.10% to Rs 43.25 on reporting a 7.38% fall in net profit to Rs 23.20 crore in Q3 December 2008 over Q3 December 2007. The company announced the results during trading hours today, 16 January 2009.

Reliance Industries was the turnover topper on BSE with turnover of Rs 266.50 crore followed by Satyam Computer Services (Rs 152.85 crore), Reliance Capital (Rs 120.85 crore), Reliance Infrastructure (Rs 115.45 crore) and Educomp Solutions (Rs 103.75 crore).

Satyam Computer Services led the volume chart on BSE clocking volumes of 6.15 crore shares followed by Unitech (2.60 crore), Reliance Natural Resources (1.65 crore), Bank of Baroda (1.24 crore) and Suzlon Energy (69.30 crore).