Key indices eke out small gains as global stocks rally

Volatility in banking, IT stocks and index heavyweight Reliance Industries (RIL) caused volatility on the bourses today, 4 February 2009. The BSE 30-share Sensex rose 52.55 points, or 0.57%, shedding close to 136 points from the day's high but off close to 67 points from the day's low. The Sensex had risen as much as 2.06% earlier in the day on firm Asian stocks and on hopes that US stimulus package will be approved.

Foreign funds which have pressed substantial sales on the domestic bourses in the current calendar year, continued to offload Indian stocks. But their outflow today, 4 February 2009, was a miniscule Rs 27.08 crore as per the provisional data released by the stock exchanges after trading hours. Domestic funds bought shares worth a net Rs 284 crore.

After holding firm in the first half of the trading session, a sudden sell-off pulled the market lower in afternoon trade. After a mild recovery, the market lost ground again in mid-afternoon trade. It bounced back later. But the recovery proved short-lived.

A slower-than-expected growth in direct tax collection also weighed on the market. The direct tax collections were up by a slower-than-expected 12.5% on-year to Rs 247000 crore for the period from 1 April 2008 to 31 January 2009. Despite the slower-than-expected collections, the government is hopeful of its annual target of Rs 365000 crore for the fiscal year. The data on the tax collections hit the market in afternoon trade.

European markets which opened after Indian market rose extending the previous session's rally as forecast-beating results from Alcatel-Lucent overshadowed disappointing earnings from Roche. Key benchmark indices in France, Germany and UK were up by between 0.48% to 1.16%.

Asian shares rose for a second consecutive session on Wednesday on tentative signs of an improving outlook for the battered global economy. Key benchmark indices in China, Hong Kong, Singapore Taiwan, and Singapore, Japan were up by between 0.39% and 2.77%. While Singapore's Strait Times fell 0.26%.

The mood was spurred by data showing activity in China's manufacturing sector may be bottoming out and a surprise rise in US pending home sales, providing hope for two economies critical to a recovery in Asia's exports.

Data on Wednesday showed China's official purchasing managers' index rose, even though it remained below a reading of 50 that divides expansion from contraction. The index rose to 45.3 for January 2009, up from 41.2 in December 2008 and a record low of 38.8 plumbed in November 2008.

Investors also welcomed the US Federal Reserve's extension of its programme to extend dollars to markets worldwide, and signs the US Senate is moving forward on a package intended to revive growth in the world's largest economy. A group of Republican US senators on Tuesday, 3 February 2009 offered a $445 billion alternative plan to boosting the ailing economy, about half of which would be in the form of tax cuts. The plan is an alternative to the $885 billion package crafted by Democrats who control the Senate.

US stocks rose on Tuesday, 3 February 2009, after better-than-expected US pending home sales data boosted sentiments. The Dow Jones industrial average advanced 141.53 points, or 1.78%, to end at 8,078.36. The Standard & Poor`s 500 index climbed 13.07 points, or 1.58%, to settle at 838.51. The Nasdaq Composite index increased 21.87 points, or 1.46%, to close at 1,516.30.

The BSE 30-share Sensex was up 52.55 points, or 0.57%, to 9,201.85. The Sensex rose 188.91 points at the day's high of 9,338.21 in mid-morning trade. The Sensex rose 14.86 points at the day's low of 9,164.16 in mid-afternoon trade.

The S&P CNX Nifty rose 19.15 points, or 0.69%, to 2,803.05.

The market breadth, indicating the overall health of the market, turned negative on BSE in mid-afternoon trade in contrast to a positive breadth earlier in the day. On BSE, 1,162 shares advanced as compared with 1,306 that declined. A total of 65 shares remained unchanged.

The BSE clocked a turnover of Rs 2,935 crore, lower than Rs 3,212.91 crore on Tuesday, 3 February 2009.

Nifty February 2009 futures were at 2775.45, at a discount of 27.60 points as compared to the spot closing of 2803.05. Turnover in NSE's futures & options (F&O) segment was Rs 32,068.03 crore much lower than Rs 40,066.85 crore on Tuesday, 3 February 2009.

The BSE Consumer Durables index (down 2.72%), the BSE Healthcare index (down 0.35%), underperformed the Sensex. The BSE Bankex (up 0.53%) matched the performance of Sensex.

The BSE Metal index (up 2.99%), the BSE Realty index (up 1.18%), the BSE Oil & Gas index (up 0.73%), the BSE Teck index (up 0.67%), the BSE PSU index (up 0.6%), the BSE FMCG index (up 0.23%), the BSE Power index (up 0.43%), the BSE Auto index (up 0.15%), the BSE Capital Goods index (up 0.13%), the BSE IT index (up 0.04%) outperformed the Sensex.

The BSE Sensex has lost 445.46 points or 4.61% 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

From the 30 share Sensex pack 19 rose while rest fell. Ranbaxy Laboratories, Reliance Infrastructure, ITC, NTPC fell by between 0.11% to 1.32%.

India's largest private sector company by market capitalization and oil refiner Reliance Industries (RIL) rose 0.37% to Rs 1,307.40. The stock had risen as much as 2% in the morning. Recently, the Bombay High Court in its interim order lifted the stay on sale of gas from its KG basin till the final order.

India's largest oil exploration firm by revenue ONGC rose 2.41% on firm crude oil prices. Oil extended its rise to above $41 a barrel on Wednesday after the oil cartel Organisation of Petroleum Exporting Countries (Opec) said it may deepen record oil supply cuts in an attempt to boost prices, sparking expectations of a shrink in hefty crude inventories. US light crude for March delivery rose 30 cents to $41.08 a barrel. London Brent crude rose 15 cents to $44.23 a barrel.

India's biggest power equipment firm in terms of revenue Bharat Heavy Electricals rose 1.07% gaining for the second straight day. The company on Tuesday, 3 February 2009, said it would set up a joint venture with a Kerala-based firm for manufacturing products for railways and other industries. Other capital goods stocks ABB, Thermax, Crompton Greaves rose by between 0.29% to 1.17%. But India's biggest engineering & construction firm by revenue, Larsen & Toubro fell 0.65%.

Metal stocks rose as improved manufacturing data in China suggested its downturn may be bottoming out. Tata Steel, Steel Authority of India, Hindustan Zinc, Sterlite Industries rose by between 0.49% to 4.25%. China is the world's largest consumer of industrial metals. While, National Aluminum Company and Hindalco Industries fell by between 1.12% to 1.41%.

Shares of private sector banks fell in choppy trade on fears of rising defaults in a weakening economy. India's second largest private sector bank by net profit HDFC Bank fell 0.28 % to Rs 896.40. The stock moved between the high of Rs 921.40 and the low of Rs 885.

India's largest private sector bank by net profit ICICI Bank fell 0.54% to Rs 389.60. The stock moved between a high of Rs 405 and the low of Rs 386.25.

PSU banks rose on as falling bond yields will boost value of the bond portfolio and on hopes that lower interest rates will spur lending growth. India's largest bank in terms of assets and branch network State Bank of India rose 0.51% to Rs 1,096.90. State Bank of India will lower its home loan rates to 8% for new customers over the coming year, the second time it has reduced mortgage rates in as many months as the economy slows. The new rate will be offered between 2 February and 30 April 2009. SBI had previously charged 9.75% on a floating basis for home loans, and 11.25-12.25% on a fixed basis. The stock moved between the high of Rs 1,117.80 and the low of Rs 1,085.70.

PSU banks, Punjab National Bank, Union Bank of India, Bank of Baroda, Indian Overseas Bank, Bank of India rose by between 0.96% to 1.12%.

India's largest dedicated housing finance company by total income HDFC rose 0.69%.

IT pivotals fell in choppy after the industry body viz. the National Association of Software and Service Companies (Nasscom) cut export growth target for the current year. India's third largest software services exporter, Wipro fell 0.09% to Rs 223.95. The stock moved between the high of Rs 231.90 and a low of Rs 222.25. TCS, India's largest software services exporter by sales fell 0.17% to Rs 499.05.

India's second largest software services exporter Infosys Technologies rose 0.04% to Rs 1282.95. The stock moved between the high of Rs 1,307.25 and a low of Rs 1,279.

India's fifth largest IT exporter by sales HCL Technologies rose 3.74%. Nasscom today said India's software and services exports should rise 16-17 % to about $47 billion in the year to March 2009, slower than 21-24% forecast earlier.

Oracle Financial Services Software gained 1.23% after the company said it has bagged an overseas contract for providing software solution.

Rate sensitive realty stocks fell on recent reports falling interest rates have failed to revive housing demand. Indiabulls Real Estate, HDIL , Unitech fell by between 0.97% to 2.21%. Most of the realty deals including sale of commercial property and housing sales is driven by finance.

India's largest car maker by sales Maruti Suzuki India rose 3.09% extending gains for the second day in a row, on posting a 5.4% rise in vehicle sales to 71,779 units in January 2009 over January 2008.

India's second largest telecom services provider by sales Reliance Communication jumped 2.35% on reports the company plans to launch a cheaper variant of its wireless Internet service in rural areas. Among other telecom stocks, Bharti Airtel rose 1.41% whereas Idea Cellular fell 0.89%

Wire & Wireless clocked the highest volume of 6.94 crore shares on BSE. Satyam Computer Services (2.62 crore shares), Spice Communications (1.98 crore shares), DLF (1.23 crore shares) and Dish TV (1.07 crore shares) were the other volume toppers in that order.

Reliance Industries clocked the highest turnover of Rs 206.58 crore on BSE. DLF (Rs 168.98 crore), Spice Communications (Rs 161.64 crore), Satyam Computer Services (Rs 134.62 crore) and Reliance Infrastructure (Rs 112.73 crore) were the other turnover toppers in that order.