Bank stocks lead rally

Easing concerns about the global economy and reports of near-normal monsoon in India this year helped stocks edge higher in what was a volatile trading session. The market rose for the sixth week in a row. The Sensex reclaimed the 11000 mark after the market dipped into the red for a brief period in mid-afternoon trade on slide in index heavyweight Reliance Industries (RIL) and some metal shares.

Index heavyweights Infosys Technlogies, Larsen & Toubro and ICICI Bank, surged. The BSE 30-share Sensex rose 75.69 points or 0.69%

Five out of 12 sectoral indices on BSE were in the red. Market breadth, which was strong throughout the session, lost steam in late trade. By the end of the day, there were 1362 gainers as against 1194 losers on BSE. A total of 94 shares were unchanged.

Government's forecast that the South West monsoon, critical to the country's $240 billion agricultural economy, will probably be near normal this year, supported the market at lower level. Rains in the June-September rainy season will probably be 96% of the average between 1941 and 1990, the New Delhi-based India Meteorological Department said in a statement today, 17 April 2009. Actual rainfall can be five percent more or less than the forecast, the bureau said. The monsoon outlook is most widely watched indicator because India's 235 million farmers represent about 20% of the $1.2 trillion economy.

The market was volatile. After a sharp surge in early afternoon trade, the market cut gains later. The market firmed up again in afternoon trade as investor sentiment was strong on sustained buying by foreign funds. Profit taking ahead of the weekend pulled the market sharply lower in mid-afternoon trade. The market cut losses in late trade on forecast of a near-normal rains this year.

Foreign funds were net buyers in Thursday's trade despite a near 3% fall in the barometer index BSE Sensex on that day. Foreign institutional investors (FIIs) bought shares worth a net Rs 395.90 crore on Thursday, 16 April 2009, lower than Rs 772.20 crore on Wednesday, 15 April 2009. FII inflow in April 2009 totaled Rs 3,488.10 crore (till 16 April 2009). FII outflow in calendar year 2009 totaled Rs 3,183.60 crore (till 16 April 2009).

Meanwhile, the government has reportedly postponed its largest auction of oil and gas fields after confusion about a tax holiday for natural gas production and the ongoing national elections

European markets were trading firm after a choppy start. Germany's DAX index rose 1.31%. France's CAC 40 was up 1.67%. UK's FTSE rose 1.33%

The European central bank's President Jean-Claude Trichet said Friday that the ECB would do what was necessary to restore confidence in the global economy. Trichet said the central bank would decide on non-standard policy steps in May, but that it was important not to create expectations.

Asian shares ended mostly in green on Thursday led higher by technology stocks after their US peers gained on hopes for better demand and some stability in the economy there. Key benchmark indices in Hong Kong, Indonesia, and Singapore were up by 0.12% to 0.60%. But key indices in South Korea and Taiwan were down 0.58% to 4.03%.

Japan's Nikkei 225 was up 1.74% after consumer confidence in Japan climbed in March 2009. However, Bank of Japan Governor Masaaki Shirakawa said Friday the Japanese economy is worsening and the downturn has yet to run its course.

China's Shanghai Composite was down 1.19%. Chinese industrial production expanded by 8.3% in March 2009 from a year earlier, up from 3.8% in the first two months. The data was released by the statistics bureau yesterday, 16 April 2009, in Beijing.

Trading in US index futures showed the Dow could rise 19 points at the opening bell on Friday, 17 April 2009. US index futures rose as General Electric and Citigroup both beat analyst estimates on their first-quarter results.

Wall Street gained Thursday amid hopes for an economic bottom in the US. US jobless claims declined. The number of people filing new claims for unemployment insurance in the week to 11 April 2009 fell to 6,10,000, the lowest number of new claims since late January 2009 and well below the 6,55,000 economists expected.

The BSE 30-share Sensex was up 75.69 points or 0.69% to 11,023.09. At the day's high of 11,339.47, the Sensex rose 392.07 points in early afternoon trade. At the day's low of 10,946.25, the Sensex fell 1.15 points in the late trade.

The S&P CNX Nifty was up 14.90 points or 0.44% at 3384.40. Nifty April 2009 futures were at 3386.50, a premium of 2.1 points compared to the spot closing. Turnover in NSE's futures & options (F&O) segment was Rs 75438.49 crore lower than Rs 78509.17 crore on Tuesday, 15 April 2009.

The BSE Mid-Cap index outperformed the Sensex, rising 0.98%. The BSE Small-Cap index underperformed the Sensex, rising 0.57%.

The BSE clocked a turnover of Rs 5555 crore, lower than Rs 7149.45 crore on 16 April 2009.

The BSE PSU index (up 0.86%), the BSE Power index (up 1.01%), the BSE Capital Goods index (up 2.57%), the BSE IT index (up 2.92%), the Bankex (up 2.93%), and the BSE Realty index (up 3.13%), outperformed the Sensex.

The BSE Auto index (up 0.15%), the BSE Oil & Gas index (down 0.29%), the BSE FMCG index (down 0.64%), the BSE Consumer Durables (down 0.73%), the BSE Healthcare index (down 0.80%), and the BSE Metal index (down 1.66%), underperformed the Sensex.

India's largest private sector firm by market capitalisation and oil refiner Reliance Industries (RIL) fell 1.09%, extending losses for the second sessions in a row. The stock had lost 4.88% in the previous session on profit taking. Earlier the stock had risen 20.44% in eight straight sessions to Rs 1825.55 on 15 April 2009 from Rs 1515.70 on 30 March 2009. The scrip has the highest weightage on the Sensex. The company recently started pumping gas from the Krishna Godavari (KG) which is estimated to add close to $2 billion to the companys profit at peak production levels.

Delhi based realtor Unitech soared 21.34% on reports the company raised nearly $325 million by selling fresh shares to institutional investors via a qualified institutional placement (QIP) on Thursday. The shares were placed at Rs 38.50 each.

Mahindra Lifespace Developers (up 10.74%), Puravankara Projects (up 9.73%), Parsvnath Developers (up 8.94%), HDIL (up 3.42%)m and Sobha Developers (up 2.35%), were other gainers in the realty sector.

However, DLF (down 1.75%), Ansal Properties & Infrastructure (down 3.67%), and Indiabulls Real Estate (down 5.05%), were losers from the realty sector.

India's largest engineering and construction firm by revenue Larsen & Toubro rose 4.21% as the company expects its order inflow to grow by 25-35% in the year ending March 2010 (FY 2010). The company said during trading hours on Thursday new orders grew 24% to Rs 52000 crore in the financial year that ended on 31 March 2009.

Wind-turbine maker Suzlon Energy spurted 3.29%. The company is reportedly seeking to reschedule payments to Portugal's Martifer SGPS SA for buying a 22.4% stake in German unit REpower Systems AG.

Suzlon had fallen more than 18% on Thursday, on reports the company faces new problems over blades for a project in China. The company, however, on Thursday denied media reports. Suzlon clarified that blades referred to in the reports are in testing stage and their production has not started yet, the company's chief operating officer (COO) Sumant Sinha had said.

Bharat Heavy Electricals (up 1.20%), BEML (up 1.52%), Areva T&D (up 2.61%), ABB (up 2.94%), Crompton Greaves (up 3.52%), SKF India (up 6.19%), and Thermax (up 7.35%), were the other major gainers from the capital goods sector.

India's largest private sector power utility Reliance Infrastructure soared 2.30%. As per recent reports, Reliance Infrastructure has been selected by Power Finance Corporation to act as IT implementation agency for state electricity boards (SEBs). This would enable the company to access Rs 10000-crore projects from the SEBs.

State-run power transmission utility Power Grid Corporation of India rose 2.96% after 20 lakh shares changed hands in a block deal on NSE at Rs 96.25 each.

Banking shares were in demand after US bank JPMorgan Chase & Co on Thursday, posted a better-than-expected quarterly profit and fuelled hopes the world banking sector was stabilizing. A further fall in bond yields also aided rally in bank shares.

India's largest commercial bank by branch network State Bank of India rose 3.54% on reports its credit growth could rise 25% in 2009-10 even as the banking sector may see loan growth of 19-20%.

O.P. Bhatt, Chairman, State Bank of India said with increase in efficiency and opening of more number of branches, SBI should be able to achieve higher growth figure. SBI, which has the largest network of branches at over 11,111, added 1,600 branches in 2008-09. The bank is planning to add another 800-1,000 branches in 2009-10, with the majority in rural and semi-urban areas.

Private sector bank and Sensex pivotal ICICI Bank rose 3.53%. It has the fourth highest weightage of 6.05% on the Sensex.

HDFC Bank (up 0.36%), Kotak Mahindra Bank (up 0.99%), Union Bank India (up 2.56%), Canara Bank (up 5.94%), Axis Bank (up 7.04%), and Allahabad Bank (up 10.09%), were the other major banking sector gainers.

At 13:30 IST, the 6.05% 2019 government bond yield was at 6.40%, off its early low of 6.36%, which was its lowest since 16 March 2009. It had ended at 6.43% on Thursday. It may be recalled that many banks had reported robust Q3 December 2008 results on the back of treasury gains as bond prices soared. Bond yields and bond prices are inversely related.

Power sector lender Power Finance Corporation rose 6.95% after its net profit rose 32.22% to Rs 390.58 crore on a 33.09% rise in operating income to Rs 1819.27 crore in Q4 March 2009 over Q4 March 2008.

Brokearge Motilal Oswal Financial Services jumped 2.24% after the scrip entered the S&P CNX 500 index, replacing RSWM, in the broad-based index.

India's second largest software outsourcer by sales Infosys Technologies rose 3.86% on bargain hunting after it fell 5.96% in past three session to Rs 1341.30 on 15 April 2009 from Rs 1426.45 on 9 April 2009. The stock had tumbled after the company issued a weak guidance for the year ending March 2010 (FY 2010). It has the second highest weightage of 8.33% on the Sensex.

Infosys has forecast a 3.1% to 6.7% decline in revenue to between $4.35 billion and $4.52 billion as per US GAAP for the year ending March 2010 (FY 2010). The company forecast a 9.5% to 13.6% decline in consolidated earnings per American Depositary Share in the range of $ 1.91 and $ 2.00 for FY 2010. The pricing for the quarter ended March 2009 declined by 3%, S.D.Shibulal, chief operating officer, Infosys said in a statement.

Patni Computer (up 8.28%), Oracle Financial Software Services (up 8.03%), HCL Technologies (up 5.95%), NIIT Technologies (up 5.29%), and TCS (up 0.33%). However, India's third largest software outsourcer by sales Wipro fell 0.85%.

Steel stocks fell on profit selling after they spurted in past few sessions. India's largest steel maker by sales Tata Steel fell 4.03%. It had lost 8.25% on Thursday after the stock rose 49.55% in eight consecutive sessions to Rs 293.35 on 15 April 2009 from Rs 196.15 on 30 March 2009. Steel Authority of India (down 3.96%), and JSW Steel (down 4.35%), were the other steel majors that slipped.

India's largest aluminium maker by sales Hindalco Industries slipped 5.18%. According to recent reports, Hindalco is actively considering scaling down production of alloy wheels at its Silvassa unit due to low demand from the auto industry for premium products. Aluminium April futures fell 0.90% on the Multi Commodity Exchange at 15:30 IST.

India's largest copper maker by sales Sterlite Industries tumbled 3.12% after copper April futures fell 0.99% on the Multi Commodity Exchange at 15:30 IST.

Steel pipes maker Welspun Gujarat Stahl Rohren rose 0.51% after falling 1.97% in the afternoon based on reports the company is expected to post yet another drop in quarterly net profit, despite rising sales, as higher interest and falling prices put pressure on margins.

India's largest passenger car maker by sales Maruti Suzuki fell 1.67%. The stock had risen 5.47% in past three session to Rs 851.55 on 16 April 2009 from Rs 807.35 on 9 April 2009.

India's largest truck maker by sales Tata Motors tumbled fell 2.89%. It had fallen 13.50% on profit selling after it rose 56.35% in six consecutive sessions to Rs 281.20 on 15 April 2009 from Rs 179.85 on 1 April 2009.

Commercial vehicle maker Ashok Leyland fell 0.71%. However, auto shares like Mahindra & Mahindra (up 0.10%), Escorts (up 2.07%), TVS Motor Company (up 2.30%), Hero Honda Motor (up 2.81%), gained.

Telecom stocks were in demand after GSM technology based mobile service providers added a record 10.8 million subscribers in March 2009. Bharti Airtel (up 1.44%), 0Reliance Communications (up 0.30) and Idea Cellular (up 2.37%), edged higher.

Idea Cellular added 1.42 million Global System for Mobile communications (GSM) users in March 2009. Bharti Airtel added 2.81 million GSM users in March 2009 compared to 2.73 million in February 2009. Reliance Communications, which has a much larger presence with phones using the competing standard CDMA, added 4,00,223 GSM subscribers in March 2009.

Sugar shares extended recent gains on reports retail sugar prices may hit Rs 30 per kilogram from current Rs 28.50 on acute shortage of cane. DCM Shriram Industries (up 6.61%), Simbhaoli Sugars (up 5%), Bajaj Hindustan Sugar (up 3.38%), Triveni Engg Industries (up 2.99%), Balrampur Chini (up 1.88%), EID Parry (up 1.79%), and Shree Renuka Sugars (up 1.36%), galloped.

The reason for shortage of sugar is attributed to shortage of cane, a raw material used in production of sugar. In response to price rise government may hike quota release for Q1 June 2009. The government, recently waived import duty on both raw and refined sugar to avert any rise in the price of this politically-sensitive commodity. In the wholesale markets, sugar prices have shot up by Rs 30 per quintal in the last fortnight to Rs 2,700-2,750 per quintal in Delhi. The rise in sugar prices stand to improve the operating margins of sugar producers.

Private sector airliner Jet Airways India rose 1.34% on reports the company is restructuring its business operations that would trim its workforce and enhance efficiency.

Security products maker Zicom Electronic Security Systems was locked at 5% upper limit after a block deal of five lakh shares was executed on BSE at Rs 84.45 per share.