Realty, banking shares power Sensex to one-month high

Key benchmark indices extended last two days' strong gains on hopes an interim budget will contain fiscal incentives to revive sagging growth. High volatility was witnessed in the second half of the trading session. The BSE 30-share Sensex gained 63.58 points or 0.66%, shedding 77.40 points from the day's high but up 136.84 points from the day's low. Turnover on BSE surged to Rs 3,716 crore from Rs 2,836.19 crore on Monday, 9 February 2009.

Volatility in index heavyweights Reliance Industries, L&T and ICICI Bank caused volatility in the second half of the trading session. After rallying 1.47% in early afternoon trade, weak European markets pulled the Sensex in the red in mid-afternoon trade. The market moved between positive and negative zone for a while later. It surged in late trade.

Buying by foreign funds also bolstered sentiment. As per the provisional data released by the stock exchanges, foreign funds today, 10 February 2009, bought shares worth a net Rs 368.96 crore. According to data released by stock market regulator Securities & Exchange Board of India (Sebi) Sebi after market hours today, 10 February 2009, foreign institutional investors (FIIs) bought shares worth a net Rs 289.10 crore on Monday, 9 February 2009. There has been substantial selling by foreign funds from the beginning of the calendar year 2009, with net outflow totaling Rs 4,047.30 crore, till 9 February 2009.

The Congress party-led coalition government will unveil an interim railway budget on Friday, 13 February 2009 followed by a mini general budget on 16 February 2009, ahead of national elections due by May 2009. A full budget for 2009-2010 will come only after a new government takes over. Foreign Minister Pranab Mukherjee, who is also responsible for finance and will present the mini budget, said on Friday, the government would take measures to boost growth, especially in sectors where jobs are at stake. The market is agog with talks that the forthcoming interim budget may offer tax sops and sector-specific stimulus package.

The government has so far announced two stimulus packages including tax cuts and the capital injections for banks. The Central Statistical Organisation (CSO) on Monday, 9 February 2009, pegged India's projected GDP growth for the year ending March 2009 at 7.1%, the slowest in six years and below the previous year's 9%.

European markets slipped today, 10 February 2009, weighed by commodity stocks that fell on persistent worries about metals and crude demand. Key benchmark indices in UK, Germany and France were down by between 1.03% and 1.65%.

Investors turned cautious after US President Barack Obama's administration delayed an announcement of a key financial recovery plan. US index futures showed the Dow could fall 88 points at the opening bell on reports the US Treasury had dropped plans to establish a "bad bank" to buy toxic assets from commercial banks as part of a broader rescue package. Reports added funding for the rescue plan is unlikely to exceed the $350 billion currently available under the Troubled Asset Relief Program (TARP).

Asian markets were mixed on concerns Washington's plans to heal the US economy might prove insufficient. Key benchmark indices in Singapore, Hong Kong, China, and Taiwan were up by between 0.70% and 1.82%. However indices in South Korea and Japan fell 0.32% and 0.29% respectively.

Wall Street finished flat on Monday as investors turned cautious after the Obama administration delayed an announcement of a key financial recovery plan. The Dow Jones industrial average fell 9.72 points, or 0.12%, at 8,270.87. The Standard & Poor's 500 Index rose 1.29 points, or 0.15%, at 869.89. The Nasdaq Composite Index fell 0.15 points, or 0.01%, at 1,591.56

An $838 billion economic stimulus bill backed by the White House narrowly advanced in the Senate on Monday, 9 February 2009 over strong Republican opposition, and Democratic leaders vowed to deliver the emergency legislation for President Barack Obama's signature within a few days. The vote was 61-36, one more than the 60 needed to move the measure toward Senate passage on Tuesday.

The US Treasury had announced last weekend that a banking stabilization plan scheduled to be unveiled on Monday had been postponed to Tuesday, amid indication that it could see some tweaking.

The BSE 30-share Sensex rose 63.58 points or 0.66% to 9,647.47. The Sensex opened 6.06 points higher. At the day's high of 9,724.87 hit in early afternoon trade, the Sensex rose 140.98 points. The barometer index today struck its highest level since 7 January 2009. The Sensex lost 73.26 points at the day's low of 9,510.63 hit in mid-afternoon trade.

The S&P CNX Nifty gained up 14.60 points or 0.5% to 2934.50. Nifty February 2009 futures were at 2923, a discount of 11.50 points as compared to the spot closing.

The BSE Sensex has jumped 556.69 points or 6.12% in the last three trading sessions from its close of 9090.88 on 5 February 2009 on expectations the forthcoming interim budget will contain fiscal incentives to revive sagging growth.

The barometer index is off 8666.63 points or 47.32% from its 52-week high 18,314.10 on 19 February 2008 but above 1950.08 points or 25.33% from its 52-week low of 7,697.39 on 27 October 2008. The Sensex had lost 10,639.68 points or 52.44% in the calendar year 2008.

The market breadth, indicating the overall health of the market, was positive on BSE with 1376 shares advancing as compared with 1101 that declined. A total of 109 shares remained unchanged. In early trade, the breadth was much stronger.

The BSE Mid-Cap rose 0.76% to 2,954.25, outperforming the Sensex. However, the BSE Small-Cap index gained 0.29% to 3,342.52, underperforming the Sensex.

The total turnover on BSE amounted to Rs 3,716 crore higher than Rs 2,836.19 crore on Monday, 9 February 2009. Turnover in NSE's futures & options (F&O) segment rose to Rs 39,017.91 crore from Rs 36,041.93 crore on Monday, 7 February 2009.

Sectoral indices on BSE displayed mixed trend. The BSE Capital Goods index (up 3.14%), the BSE Auto index (up 1%), BSE HealthCare index (up 1.14%), the BSE Bankex (up 1.16%), BSE Realty index (up 6.58%), outperformed the Sensex.

The BSE Teck index (up 0.39%), BSE IT index (up 0.02%), BSE Consumer Durables index (down 0.26%), the BSE FMCG index (down 0.78%), BSE Metal index (down 1.43%), BSE Oil & Gas index (up 0.57%), the BSE PSU index (down 0.02%), the BSE Power index (up 0.43%), underperformed the Sensex.

Among the 30-member Sensex pack, 17 declined while the rest gained. Reliance Infrastructure (down 2.79%), ITC (down 1.94%), and NTPC (down 1.61%), edged lower from the Sensex pack.

Realty shares advanced on hopes the forthcoming interim budget may include sops to the housing sector. India's largest real estate firm by market capitalisation DLF jumped 8.40% to Rs 151.60 on reports the company has secured long-term loans of about Rs 2000 crore. The counter clocked high volumes of 94.03 lakh shares and was the top gainer from the Sensex pack.

Indiabulls Real Estate (up 5.47%), Unitech (up 9.45%), and HDIL (up 4.07%), advanced.

India's largest private sector company by market capitalization and oil refiner Reliance Industries (RIL) rose 0.81% to Rs 1400.30 on hopes for a revenue boost from gas sales next month, and exports from its new refinery, which start in April 2009. The stock swung between a high of Rs 1414.20 and low of Rs 1373.35.

As per reports the company now plans to start selling petrol, diesel and jet fuel from its new export refinery in Jamnagar, Gujarat from April 2009. Exports from the company's unit Reliance Petroleum (RPL) which was about to start in January 2009 were delayed due to regulatory issues.

However India's biggest exploration company by sales, ONGC fell 1.75% to Rs 708.95 on profit booking after the stock rose 8.49% in two trading days to Rs 721.60 on 9 February 2009 from Rs 665.10 on 5 February 2009, on reports a government panel has allowed ONGC to file an appeal against a tax demand notice issued by the Income Tax (I-T) Department over treating each oil well as an individual company, which allowed India's largest oil producer to claim tax exemption for a longer time span.

Capital goods shares rose as investors bet higher government spending on infrastructure-related projects to pump prime the economy would boost orders for these firms. India's largest power equipment maker by sales Bharat Heavy Electricals (Bhel) advanced 4.11% to Rs 1450, extending a 2% rise on Monday, 9 February 2009 triggered by the company's announcement during trading hours of it winning four major contracts aggregating at around Rs 7,000 crore from various customers for the supply and installation of main plant equipment for thermal power projects.

India's largest engineering and construction firm by sales Larsen & Toubro gained 3.07% to Rs 695.10 on bargain hunting after sliding 6.35% in one month to 9 February 2009.

Praj Industries jumped 8.93% to Rs 61 after the company it has developed an innovative technology to manufacture ethanol. The company made this announcement during trading hours today, 10 February 2009.

India's top tractor maker by sales Mahindra and Mahindra jumped 3.96% to Rs 285.15 on reports its auto components and design engineering arm Mahindra Systech is in advanced talks with two Australian aerospace companies - one to acquire an aircraft components maker and the other to forge a joint venture for building eight- and 14-seater planes. However the names of the target firms were not disclosed.

Bank stocks rose on expectations that bond prices will recover if the central bank cuts rates further. India's largest bank in terms of assets and branch network State Bank of India rose 1.52% to Rs 1165. India's second largest private sector bank by net profit HDFC Bank rose 2.82% to Rs 945 as its American depository receipt (ADR) rose 1.35% on Monday, 9 February 2009. India's largest private sector bank by net profit ICICI Bank gained 0.15% to Rs 428.65 tracking 2.77% rise as its ADR on Monday, 9 February 2009.

Higher bond prices could boost treasury income of banks. Prime Minister's Economic Advisory Council chairman Suresh Tendulkar said late yesterday, 9 February 2009, the central bank may cut interest rates after the interim budget to spur the economy. However, bond prices fell today, 10 February 2009, on a higher-than-expected extra government borrowing plan.

The government will sell Rs 46000 crore ($9.44 billion) of additional debt in four parts between 20 February 2009 and 20 March 2009, Economic Affairs Secretary Ashok Chawla said in New Delhi today. Government bond prices have plunged in 2009 as the government borrowed more than budgeted for the fiscal year ending 31 March 2009 to pump prime the economy. The extra borrowings are largely aimed at supporting the economy, which has been hurt by a slump in consumer spending in the wake of the global financial crisis.

Most IT pivotals slipped after the Obama administration delayed an announcement of a key financial rescue plan. TCS, India's largest software services exporter by sales rose 1.93%. India's second largest software services exporter Infosys Technologies fell 0.37%. India's fifth largest IT exporter by sales HCL Technologies fell 2.37%. India's third largest software services exporter, Wipro slipped 0.53%.

Indian IT firms count US finance firms among their key clients. IT stocks fell despite a weak rupee. The partially convertible rupee was at 48.71 as compared with its previous close of 48.57. A weak rupee boosts operating margins of IT firms.

E-learning solutions provider Educomp Solutions soared 18.43% to Rs 1,891.45. The stock rose for the third day in a row after the company said during market hours on 6 February 2009 that its promoters have not pledged any of their shares to any financial institution/bank/or individual.

Metal shares slipped on persistent worries about global demand with key global economies in recession. Tata Steel (down 2.20%), Hindlaco (down 2.07%), and Sterlite Industries (down 1.48%), slipped.

Steel Authority of India fell 3.95% to Rs 86.40 after foreign brokerage Macquarie Group cut rating on the stock to neutral from outperform.

Reliance Industries topped the turnover chart on BSE with a turnover of Rs 337.60 crore followed by Educomp Solutions (Rs 253.40 crore), Reliance Infrastructure (Rs 207.45 crore), United Spirits (Rs 175.90 crore) and Reliance Capital (Rs 162.15 crore).

Unitech led the volume chart on BSE clocking volume of 3.41 crore shares followed by Cals Refineries (2.20 crore shares), Kohinoor Broadcasting (1.13 crore shares), GVK Power Infrastructure (1.08 crore shares) and Satyam Computer Services (1 crore shares).

Select shares extended Monday's, 9 February 2009 rally on speculation of favourable announcements from the Railways Minister Lalu Prasad in his interim rail budget on 13 February 2009. Wagon makers Texmaco (up 5.57%), Titagarh Wagons (up 12.78%), and Bharat Earth Movers (up 5.09%) surged on hopes the interim budget for 2009- 10 is likely to have proposals for introduction of more Garib Raths thereby boosting demand for wagons.

Shipping shares rallied after the Baltic Dry Index, a measure of freight rates for dry bulk vessels, gained 10% yesterday, 9 February 2009. The index surged over 50% last week on reports mining companies scrambled to hire ships to deliver iron ore to China.

Essar Shipping (up 5.71%), Mercator Lines (up 3.09%), Shipping Corporation of India (up 1.49%), Varun Shipping (up 1.31%), advanced.

United Spirits rose 0.65% to Rs 706 on reports the company plans to divest around 49% stake in its UK-based wholly-owned subsidiary Whyte & Mackay (W&M), which it acquired for 595 million pounds in May 2007.