Sensex attains six-month high

Key benchmark indices rose for the second straight day mirroring gains in European markets. But volatility was high as traders rolled over positions from the near-month April 2009 contracts to May 2009 in the derivatives segment ahead of the expiry of the near month contracts on Wednesday, 29 April 2009. The BSE 30-share Sensex was up 194.06 points or 1.74%, off close to 30 points from the day's high and up 260 points from the day's low. The Sensex attained its highest closing level in more than six months.

Index heavyweight Reliance Industries (RIL) shrugged off weak Q4 results. Realty, auto and banking stocks rose. IT stocks cut intraday losses.

Volatility was high right from the onset of the trading session. After an early surge, the market soon slipped into the red. It recovered in morning trade. Volatility ruled the roost in early afternoon trade. Market spurted in mid-afternoon trade as European stocks rose in early trade. Choppy trading was the order of the day in late trade.

The expiry of the near-month derivatives contracts has been advanced to 20 April 2009 from 30 April 2009 as the stock market remains closed on 30 April 2009 on account of voting for the parliamentary elections in Mumbai on 30 April 2009. Rollover of Nifty positions from April 2009 series to May 2009 series stood at 29%, as on Thursday, 23 April 2009.

Political uncertainty, with polling underway for India's 15th Lok Sabha, may ensure wild swings on the bourses in the next few weeks. The month-long parliamentary elections that began on 16 April 2009 will conclude on 13 May 2009 with results due on 16 May 2009. Poll estimates point to a fractured mandate.

European shares rose on Friday led by banks as leading indicator of German business activity rebounded strongly from an 18-year low in April 2009. Key benchmark indices in Germany, France and UK were up by between 1.72% to 2.31%.

Britain's recession accelerated at a faster-than-expected pace in the first three months of 2009, with gross domestic product shrinking by 1.9% from the level seen in the fourth quarter of 2008, the Office for National Statistics (ONS) reported Friday. The first-quarter plunge was driven by a 1.2% quarterly contraction in the services sector, which dominates the UK economy.

British consumers increased spending in March 2009 despite the deepening recession, according to the ONS. The agency said seasonally-adjusted retail sales rose 0.3% in March 2009 after falling by a downwardly-revised 2% in February 2009. Compared to March 2008, sales were up 1.5% compared to a 0.4% annual increase in February 2009.

Unemployment in Spain jumped to 17.4% in the first quarter of 2009, bringing the total number of unemployed to 4,010,700, the National Statistics Institute reported on Friday.

Asian stocks fell on concern the global recession is hurting corporate profits. Key benchmark indices in Hong Kong, South Korea, Singapore and Japan were down by between 0.4% and 1.57%. key benchmark indices in Hong Kong & Taiwan rose by between 0.09% to 0.29%.

South Korea's economy expanded 0.1% in the first quarter, the government said today, 24 April 2009.

China's Shanghai Composite fell 0.62%. A number of investment banks, including Goldman Sachs and Morgan Stanley, have recently raised their forecasts for China's growth this year, citing the aggressive moves by the Chinese government to stimulate the economy.

Trading in US index futures indicated the Dow could rise 31 points at the opening bell today 24 April 2009.

US stocks rose in volatile trade on Thursday as better-than-expected results from several regional banks and solid results from Apple Inc overshadowed disappointing economic data and anemic outlooks from economic bellwethers like United Parcel Service. The Dow Jones industrial average gained 70.49 points, or 0.9%, to 7,957.06. The S&P 500 index added 8.37 points, or 1%, to 851.92, and the Nasdaq Composite index rose 6.09 points, or 0.4%, to 1,652.21.

Fears that that the federal government's stress tests on 19 major US banks may reveal weaknesses created volatility throughout the session. The government is set to unveil results on 4 May 2009.

Shares of credit card firm American Express surged in after-hours trade as Q1 net profit fell 56%, beating expectations. The results hit the market after the closing bell.

US government data on Thursday showed existing US homes sales fell in March 2009 to a much lower-than-expected annual rate, while weekly initial jobless claims rose slightly more than expected.

The global economic crisis is far from over, International Monetary Fund Managing Director Dominique Strauss- Kahn said on Thursday, 23 April 2009. Meanwhile, finance chiefs from the Group of Seven (G7) are meeting today in Washington. There is pressure on the G7 countries to ensure that stimulus policies are maintained until expansion is assured.

Closer home, the Reserve Bank of India (RBI) on Tuesday, 21 April 2009 cut its key short-term rates by 25 basis points each to shore up faltering growth in the face of the global economic slowdown. The Reserve Bank also repeated a call for banks to pass on its rate cuts to customers and said deposit rates should also fall. "There is scope for the overall interest rate structure to move down within the policy rate easing already effected by the Reserve bank," it said, adding its latest rate cut reinforced the case.

Reacting to the RBI rate cut, ICICI Bank, India's largest private sector bank by net profit, announced a reduction in both deposit and lending rates after trading hours on Tuesday, 21 April 2009. ,p> The RBI cut is growth estimate for the year ended March 2009 (FY 2009) to 6.5% to 6.7%, from 7% projected earlier. It has forecast growth of around 6% for the year ending March 2010 (FY 2010). The fiscal and monetary stimulus measures initiated during 2008-09 coupled with lower commodity prices could cushion the downturn in the growth momentum during 2009-10 by stabilizing domestic economic activity to some extent, RBI said in a statement. However, any upturn in the growth momentum is unlikely in view of the projected contraction in global demand during 2009, particularly decline in trade, it added.

Strong rural demand, lagged impact of monetary and fiscal stimuli, softening of domestic input prices, investment demand from brown-field expansion projects and some restructuring initiatives are expected to have a positive impact on industrial production in the coming months, the RBI said.

While moderation in internal accruals has an adverse effect on corporate investment, decline in input prices and reduction in borrowing costs may have a favourable impact on profitability of the corporate sector going forward, the RBI said.

The central bank said that managing large government borrowing in FY 2010 in a non-disruptive manner would be a major challenge, and said it would used a mix of monetary and debt management tools to ensure this was done smoothly. Large borrowings also militate against the low interest rate environment that the RBI is trying to maintain to spur investment demand in keeping with the stance of monetary policy, the central bank said in its policy statement.

The RBI said wholesale-priced based inflation was expected to turn negative early in the current fiscal year, but this should not be interpreted as deflation for policy purposes. It projected WPI inflation would be around 4% at the end of FY 2010.

The RBI said a planned April 2009 review of the policy on foreign banks in India would now not go ahead until there was greater clarity regarding stability, recovery of the global financial system and better global coordination on regulation and supervision.

A good news for the economy is forecast of a near normal monsoon by the India Meteorological Department (IMD) on 17 April 2009. The IMD said rainfall in the June-September 2009 monsoon season was expected to be 96% of the long-term average. The outlook is among the nation's most widely watched indicator as monsoon rains are a major influence on output of key crops, economic activity and also affects sentiment in the country's financial markets.

The market sentiment remains firm due to buying by foreign funds. Foreign institutional investors (FIIs) bought shares worth a net Rs 311.70 crore on Thursday, 23 April 2009. FII inflow in April 2009 totaled Rs 4,860.40 crore (till 23 April 2009). FII outflow in calendar year 2009 totaled Rs 1,811.20 crore (till 23 April 2009).

FIIs had resorted to heavy selling of Indian stocks in the first two months of calendar 2009. Domestic institutional investors had absorbed the selling by FIIs.

Foreign direct investment (FDI) into India is expected to be at least $40 billion in the year to March 2010 (FY 2010) on a favourable outlook, Gopal Krishna, a joint secretary, said on Friday, 24 April 2009. FDI during 2008/09 fiscal year (FY 2009) was likely around $37.5 billion, including reinvestment by foreign firms, he said. There will be some investment in FY 2010 which will be delayed but overall outlook is positive and optimistic, Krishna said.

The BSE 30-share Sensex jumped 194.06 points or 1.74% to 11,329.05, its highest closing since 14 October 2008. At the day's high of 11,362.88 Sensex rose 227.89 points in late trade. At the day's low of 11,070.33, the Sensex fell 64.66 points in morning trade.

The S&P CNX Nifty was up 57.05 points or 1.67% to 3,480.75 its highest closing since 15 April 2009.

BSE clocked a turnover of Rs 5,254 crore, higher than Rs 4,743.41 crore on Thursday , 23 April 2009.

Nifty April 2009 futures were at 3475, at a discount of 5.75 points as compared to the spot closing of 3480.75. Turnover in NSE's futures & options (F&O) segment increased to Rs 68,374.47 crore from Rs 68,331.06 crore on Thursday, 23 April 2009.

The BSE Sensex is up 1,681.74 points or 17.43% in calendar 2009 from its close of 9,647.31 on 31 December 2008.

Coming back to today's trade, the BSE Mid-Cap index rose 1.86%, outperforming the Sensex. The BSE Small-Cap index rose 1.71%, underperforming the Sensex.

The BSE Bankex (up 2.77%), the BSE Consumer Durables index (up 2.32%), The BSE IT index (up 5.22%), the BSE Metal index (up 5.2%), the BSE Realty index (up 4.21%), the BSE Auto index (up 3.92%), the BSE TECk (up 3.12%), outperformed the Sensex.

the BSE FMCG index (up 0.09%), the BSE Healthcare index (up 0.83%), the BSE PSU index (up 2.09%), the BSE Oil & Gas index (up 2.25%), the BSE Power index (up 2.26%), the BSE Capital Goods index (up 2.83%) underperfomed the Sensex.

The market breadth, indicating the overall health of the market, was strong. On BSE, 1,547 stocks advanced as compared to 995 that declined. A total of 58 shares remained unchanged.

From the 30 share Sensex pack 24 stocks gained while rest fell.

India's largest private sector firm by market capitalisation and oil refiner Reliance Industries (RIL) rose 1.26% to Rs 1,784.55 as gas sales will add close to $2 billion to the company's bottomline at peak production level. The company started pumping gas from the Krishna-Godavari basin early this month.

RIL's net profit fell 9.35% to Rs 3546 crore on 23.9% fall in sales to Rs 28,362 crore in Q4 March 2009 over Q4 March 2008. The company announced results after the market hours yesterday.

Cement stocks gained on good Q4 March 2009 results posted by cement firms. ACC, Ultratech Cement, India Cements, Grasim Industries rose by between 1.21% to 5.68%.

Rate sensitive real estate shares rose on hopes lower rates will spur housing demand. DLF, Indiabulls Real Estate Housing Development & Infrastructure rose by between 1.37% to 5.86%. Most of the realty deals including sale of commercial property and housing sales is driven by finance.

Banking stocks jumped on hopes falling interest rates will boost lending growth. India's largest bank in terms of assets and branch network State Bank of India (SBI) was up 3.33%. SBI chairman O.P. Bhatt on Tuesday 21 April 2009 said interest rate cuts by the Reserve Bank of India were a signal for commercial banks to lower their rates. He said a decision on whether SBI would lower rates would be taken after a meeting of the bank's asset-liability. SBI's advance tax payment jumped 27.64% to Rs 1810 crore in Q4 March 2009 over Q4 March 2008.

India's largest private sector bank by net profit ICICI Bank was up 2.1% ahead of its Q4 March 2009 result tomorrow. A total of 13 brokerages expect a between 2.2% to 45.8% fall in net profit to between Rs 623.30 crore to Rs 1124 crore in Q4 March 2009 over Q4 March 2008. Its American depository receipts (ADR) jumped 9.34% on Thursday, 23 April 2009.

ICICI Bank cut its lending rates by 50 basis points after the central bank cut official interest rates on Tuesday 21 April 2009. The benchmark advance rate, or the rate that it charges its top customers, now stands at 16.25% from 16.75%, effective from Wednesday, 22 April 2009.

ICICI Bank also cut rates for retail customers by 50 basis points. The rates on deposits have been cut between 25 to 50 basis points, with effect from Friday 24 April 2009, the bank said.

India's second largest private sector bank by operating income HDFC Bank rose 1.6% on strong Q4 results. Its ADR gained 6.4% on Thursday boosted by the results.

The banks' net profit rose 33.9% to Rs 630.88 crore on 53.1% rise in operating income to Rs 5,365,52 crore in Q4 March 2009 over Q4 March 2008. The results were more or less in line with market expectations. The bank announced the results after trading hours yesterday.

HDFC bank's gross non performing assets (NPA) stood at 1.98% of advances as of 31 March 2009 compared to 1.91% as of 31 December 2008. Net NPA as of 31 March 2009 was at 0.63% of net advances.

India's biggest dedicated housing finance firm by operating income HDFC rose 2.53%.

Auto shares rose on hopes lower interest rates would spur demand for vehicles which is mainly driven by finance. India's largest car maker by sales Maruti Suzuki India rose 0.69% even as its net profit fell 18.32% to Rs 243.13 crore in Q4 March 2009 over Q4 March 2008. The results hit the market in mid-afternoon trade today.

Mahindra & Mahindra, Tata Motors and Hero Honda Motors rose by between 2.22% to 7.01%.

Outsourcing focussed IT stocks recovered on hopes aggressive measures by the United States to revive the economy may bear fruit. US is the biggest market for Indian IT firms. A firm rupee had pulled down IT stocks earlier in the day. India's third largest software services exporter, Wipro was down 0.34% to Rs 311.90, off the day's low of Rs 301.10. Wipro reported 14.8% rise in Q4 consolidated net profit at Rs 1010 crore on 13.5% rise in total income to Rs 6,583.20 crore in Q4 March 2009 over Q4 March 2008. The company announced the results on Wednesday.

Wipro has forecast between $1.009 billion and $1.025 billion in revenue from information technology services in the quarter ending 30 June 2009, lower than the $1.058 billion posted in the three months ended 31 March 2009. Wipro Chairman Azim Premji said the company did a major re-organization of its software business at the beginning of the last financial year and hopes to emerge stronger than before. Chief Financial Officer Suresh Senapaty said operating margins for the software business expanded to 21.8% during the quarter from 21% in year-earlier period, in spite of lower business volumes.

India's second largest software services exporter Infosys Technologies was almost unchanged at Rs 1,448.60. The stock came off the day's low of Rs 1,405. India's largest software services exporter by sales TCS rose 2.58% to Rs 582.60, off the day's low of Rs 550.

The Indian rupee rose on Friday, helped by the dollar's weakness against some currencies but demand from oil refiners for import payments limited the rise. The partially convertible rupee was at 49.81 per dollar, compared to the previous close of 49.92/94. A strong rupee affects operating profit of IT firms negatively as they earn most of their revenues from exports.

Healthcare stocks rose triggered by expectations of better Q4 March 2009 results following reports of higher advance tax payment by these firms. Ranbaxy Laboratories, Sun Pharmaceuticals Industries, Cipla, Wockhardt, Biocon, Lupin rose by between 1.7% to 3.57%.

Some FMCG stocks rose triggered by expectations of a surge in sales due to forecast of a good monsoon this year. ITC, Tata Tea, Dabur India, Britannia Industries rose by between 0.13% to 2.09%. FMCG firms derive a substantial revenue from rural markets.

Reliance Infrastructure jumped 3.72% as consolidated net profit rose 14.85% to Rs 1353.23 crore in the year ended March 2009 over the year ended March 2008. The company announced the results during trading hours on Thursday, 23 April 2009.

Cals Refineries clocked the highest volume of 3.69 crore shares on BSE. Unitech (3.08 crore shares), IFCI (2.06 crore shares), Reliance Natural Resources (1.85 crore shares) and Suzlon Energy (1.46 crore shares) were the other volume topers in that order.

Reliance Industrial Infrastructure clocked the highest turnover of Rs 301.14 crore on BSE. Reliance Industries (Rs 237.18 crore), Reliance Capital (Rs 216.12 crore), ICICI Bank (Rs 208.05 crore) and Housing Development & Infrastructure (Rs 206.35 crore) were the other turnover toppers in that order.