Sensex ends volatile session with modest gains

The market ended the volatile session marginally higher Tuesday (3 February 2009) amid intraday fluctuations. Market, which was firm in afternoon, trimmed gains by mid-afternoon trade after European indices turned red. Dull signals from the US index futures, which suggested Dow could fall 16 points at the opening bell, also hit sentiments.

Volatility in indices can be attributed to similar ups and downs in index pivotals Reliance Industries and ICICI Bank. The BSE 30-share Sensex rose 82.60 points or 0.91%, shedding close to 154 points from the day's high. The Sensex recovered close to 108 points from the intraday low of 9,040.56.

The market had opened firm picking cues from global indices. Asian stocks rose led by bank and technology shares. The key benchmark indices in China, Singapore, South Korea, Taiwan and Singapore rose by between 0.39% to 2.65%. Japan's Nikkei fell 0.62% and Hong Kong's Hang Seng fell 0.66%.

Also the European markets had opened positive, but turned negative as the session proceeded. The key benchmark indices in France, Germany and UK were down by between 0.74% to 0.92%.

US markets had ended on a mixed note on Monday, 2 February 2009. A rally in technology stocks lifted the Nasdaq Composite Index by 18.01 points, or 1.22%, to 1,494.43 on bets Obama administration's economic stimulus will boost spending on telecommunications and tech infrastructure.

However, the Dow and S&P 500 fell as uncertainty about a plan to stem bank losses dragged. The Dow Jones industrial average ended down 64.11 points, or 0.80%, at 7,936.75 and the Standard & Poor's 500 Index dipped 0.45 point, or 0.05%, to 825.43.

The BSE 30-share Sensex was up 82.60 points, or 0.91%, to 9,149.30. The Sensex rose 236.05 points at the day's high of 9,302.75 in late trade. At the day's low of of 9,040.56 in mid-morning trade, the Sensex fell 26.14 points.

The S&P CNX Nifty up 17.25 points, or 0.62%, to 2,783.90.

A wide-based sell-off in stocks and sectors across the board took their toll on bourses, sending key benchmark indices lower yesterday, 2 February 2009. The BSE 30-share Sensex lost 357.54 points, or 3.79%, to 9,066.70 and the S&P CNX Nifty fell 108.15 points, or 3.76%, to 2,766.65.

The market breadth, indicating the overall health of the market, was negative on BSE with 1,081 shares advancing as compared with 1,363 that declined. 67 shares remained unchanged. Breadth was strong in opening trade.

The BSE Oil & Gas index (up 1.44%), the BSE FMCG index (up 1.01%), outperformed the Sensex.

The BSE Realty index (down 7.59%), the BSE Consumer Durables index (down 2.85%), the BSE Healthcare index (down 0.72%), the BSE Metal index (down 0.56%), the BSE Auto index (down 0.13%), the BSE Power index (down 0.1%), the BSE PSU index (down 0.04%), the BSE Capital Goods index (up 0.21%), the BSE Bankex (up 0.53%), the BSE Teck index (up 0.64%), the BSE IT index (up 0.66%) underperformed the Sensex.

Nifty February 2009 futures were at 2765, at a discount of 18.90 points as compared to the spot closing of 2783.90. Turnover in NSE's futures & options (F&O) segment increased to Rs 40,066.85 crore from Rs 34,205.27 crore on Monday, 2 February 2009.

Among the 30-share Sensex pack, 20 rose while the rest fell.

India's largest private sector company by market capitalization and oil refiner Reliance Industries (RIL) rose 1.96% to Rs 1,302.55. The stock moved in a range of Rs 1,271.50 – Rs 1,330. The stock was boosted by recent reports the Bombay High Court has in its interim order lifted stay on sale of RIL gas till the final order. Further the High Court added the gas has be sold at $4.2 mmbtu as per government utilisation.

Other oil stocks, Cairn India, Reliance Petroleum and ONGC rose by between 1.59% to 2.05%.

Rate sensitive realty stocks fell on reports falling interest rates have failed to revive housing demand. Indiabulls Real Estate, HDIL, Phoenix Mills, Unitech, Anant Raj Industries fell by between 0.39% to 8.94%.

DLF slumped 13.25% on high volumes of 1.3 crore shares on reports it plans to cut home prices by 20% to help lift demand in a slowing economy. The stock hit an all time low of Rs 131.25 in intra-day trade. India's biggest developer had its stock rating cut to underperform from outperform at Macquarie Group, post results.

Bank stocks were volatile as investors speculated falling bond yields and lower rates would accelerate loan growth and profitability. India's second largest private sector bank by net profit HDFC Bank rose 1.17% even as its American depository receipt (ADR) fell 1.11% on Monday, 2 February 2009. The stock moved between the high of Rs 910 and the low of Rs 890.

India's largest bank in terms of assets and branch network State Bank of India (SBI) fell 0.4% to Rs 1,091.30. The stock moved between the high of Rs 1,117 and a low of Rs 1,072. The bank 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, the bank said in a statement. SBI had previously charged 9.75% on a floating basis for home loans, and 11.25-12.25% on a fixed basis.

India's largest private sector bank by net profit ICICI Bank rose 1.77% to Rs 391.70 even as its ADR fell 2.55% overnight. The stocks moved between the high of Rs 404.50 and a low of Rs 383.55.

India's largest dedicated housing finance company by total income HDFC rose 0.64%.

India's largest commercial vehicle maker by sales Tata Motors fell 6.41% after its vehicle sales fell 33% in January 2009 over January 2008. Commercial and passenger vehicle sales in India and overseas dropped to 36,931 units last month from 54,796 units a year earlier, Mumbai-based Tata Motors said.

India's largest tractor maker by sales Mahindra & Mahindra fell 1.1% as its sales in January 2009 fell 21% over January 2008. Sales of cars, SUVs, trucks and three-wheeled vehicles reached 17,611 units last month in India and overseas, compared with 22,309 units a year earlier, the company said.

India's largest car maker by sales Maruti Suzuki India rose 3.06% after it reversed three months of falling sales with a record gain in January on higher demand for its SX4 and D'zire sedans.

FMCG stocks rose on defensive buying. United Spirits, ITC, Dabur India, Marico, Hindustan Unilever rose by between 0.6% to 3.23%. The BSE FMCG index outperformed the Sensex, rising 1.01%

India's largest electric equipment maker by sales Bharat Heavy Electricals gained 2.35% on reports the company signed a pact with Kerala based KEL for setting up a joint venture firm.

Metal stocks declined on worries a weakening domestic and global economy has hit demand. Tata Steel, Hindalco Industries, Steel Authority of India, Hindustan Zinc fell by between 0.07% to 2.82%. While Sterlite Industries and National Aluminum Company rose by between 0.61% to 1.5%.

IT shares rose. India's second largest software services exporter Infosys Technologies rose 0.28%.

India's third largest software services exporter, Wipro rose 1.84% even as its American depository receipt (ADR) fell 1.44% overnight. The company forecasted a 7% fall in revenue for Q4 March 2009 on global economic downturn and pricing pressure from western clients, at the time of declaring results before market hours on 21 January 2009.

India's fifth largest IT exporter by sales HCL Technologies rose 3.84%. TCS, India's largest software services exporter by sales rose 1.62%.

Cement shares advanced on reporting healthy despatches in the past month. Aditya Birla Group January 2009 cement dispatches rose 7.35% to 3 million tones. Aditya Birla Group companies Grasim industries rose 7.15% and Ultratech Cement gained 5.62%. Meanwhile, Ambuja Cements rose 1.01% and India Cements advanced 4.47%.

India's largest cement maker by sales ACC rose 5.1% after it reported a 12.5% rise in January 2009 shipments from a year ago, to 1.89 million tonnes. The company, in which Swiss cement maker Holcim holds a more than 46% stake, said production rose to 1.87 million tonnes from 1.67 million tonnes a year earlier.

Ganesh Housing Corporation slipped 1.36% after the company said its promoters have pledged 30% stake of the company with the bank.

Exide Industries soared 3.63% after a 15 lakh shares or, 0.18% equity, changed hands in a block deal on BSE at Rs 40 each.

PVR declined 4.16% after the company said one of its promoter pledged 2.17% of the company's paid up capital with the bank.

C & C Constructions rose 0.35% after the company said its promoters have pledged 12.60% of the firm's paid up capital with the bank.

Educomp Solutions slumped 12.28% on reports the corporate affairs ministry ordered inspection of accounts of the company over alleged accounting frauds.

Max India rose 0.44% ahead of the company's board meeting to be held later in the day to consider a rights issue of shares.

Varun Shipping Company fell 0.64% after a block deal of 1.95 crore shares was executed on NSE at Rs 47.75 per share.

Indiabulls Securities fell 4.14% to Rs 20.85 after its board approved a buyback of shares at a maximum price of Rs 33.

Satyam Computer Services clocked the highest volume of 3.65 crore shares on BSE. Spice Communications (3.52 crore shares), Unitech (1.32 crore shares), DLF (1.3 crore shares) and Reliance Natural Resources (1.05 crore shares) were the other volume toppers in that order.

Reliance Industries clocked the highest turnover of Rs 297.09 crore on BSE. Spice Communications (Rs 280.74 crore), Satyam Computer Services (Rs 204.25 crore), DLF (Rs 181.58 crore) and Reliance Infrastructure (Rs 164.42 crore) were the other turnover topper in that order.

Foreign institutional investors (FIIs) are in selling mode after an inflow of Rs 1319.10 crore in December 2008. Their outflow in January 2009 totaled Rs 4250.30 crore (till 30 January 2009).

Meanwhile the market regulator market regulator Sebi late evening on Monday, 2 February 2009 said it will look at easing takeover rules in special cases, ahead of a possible acquisition of the mega fraud hit Satyam Computer Services.

The regulator also tightened rules for warrant subscriptions, raising the upfront payment for buying warrants to 25% from 10%. It also eased rules for pricing equity offerings by allowing companies to set the price two days before the opening date of a public offer.

Rules for bonus share offerings were also modified, with the regulator stipulating all offers where shareholder approval is not required should be completed in 15 days.

Meanwhile, a new version of US President Barack Obama's economic stimulus plan intends to inject $888 billion into the recession-crippled US economy, with most of the money devoted to infrastructure spending. The Senate debated about this on Monday, 2 February 2009 after a previous version of the American Recovery and Reinvestment Act of 2009 was approved by the House or Representatives last week.

In economic data, the Institute for Supply Management reported contraction in manufacturing activity for the 12th straight month. However the reading of 35.6 came in better than expected. Construction spending fell 1.4% in December 2008 while consumer spending fell 1%.