Sensex rises for the 8th consecutive week

Momentum buying lifted the market for the eighth consecutive week on expectations of a recovery in the Indian and global economy. Foreign investors made heavy purchases. A recent reduction in interest rates also powered the market higher.

A forecast by the Meteorological Department of a near normal monsoon as well as better-than-expected fourth quarter earnings announced by some key corporates also provided fillip to the market sentiment.

FII inflow in April 2009 totaled Rs 7,039.90 crore, and the inflow in calendar year 2009 totaled Rs 368.10 crore (till 28 April 2009).

The 30-share BSE Sensex rose 74.20 points or 0.65% to 11,403.25, in week ended 29 April 2009. But the broader 50-unit Nifty fell 6.8 points or 0.19% to 3473.95 in the week.

The BSE Mid-Cap index fell 2.4% to 3,513.86 and the BSE Small-Cap index fell 3.1% to 3940.90 in the week.

Trading for the week started on a mixed note. Key benchmark indices saw divergent trend - with the BSE Sensex advancing and its peer S&P CNX Nifty ending lower on Monday. 27 April 2009. The BSE 30-share Sensex rose 42.80 or 0.38% to 11,371.85. The S&P CNX Nifty slipped 10.75 points or 0.31% to 3,470.

Indian stocks joined global sell off on Tuesday, 28 April 2009, after the Wall Street Journal reported Bank of America Corporation and Citigroup Inc. were told by US regulators that they need more capital. Concerns that the swine-flu outbreak will curtail travel and delay a recovery from the global recession also weighed on global stocks. The BSE 30-share Sensex fell 370.10 points or 3.25% to 11,001.75. The S&P CNX Nifty fell 107.65 points or 3.1% to 3,362.35.

Positive global cues and short covering in April 2009 derivatives contracts which expired on 29 April 2009, boosted the bourses on that day. The BSE 30-share Sensex rose 401.50 points or 3.65% to 11,403.25. The S&P CNX Nifty rose 111.60 points or 3.32% to 3473.95.

India's largest private sector firm by market capitalisation and oil refiner Reliance Industries (RIL) rose 1% in the week. The company signed gas sales and purchase agreement (GSPA) with customers in the power sector for supply of natural gas from the prolific KG-D6 block. The GSPAs were signed with nine customers in the power sector for supply of about 11 million standard cubic metres (mmscmd) of natural gas at 11 different power generation facilities.

Meanwhile, as per other reports, Reliance Industries has resumed crude oil production from one well in its east coast deepwater block. Reliance had stopped crude oil production form the Krishna Godavari block, popularly known as D-6, from 22 March 2009 to add more wells to raise the crude oil output.

India's largest oil exploration firm by sales Oil and Natural Gas Corporation gained 1% as crude oil moved past $50 a barrel mark. The rise in crude oil prices would result in higher realizations from crude sales for oil exploration firms.

India's largest telecom services provider by sales Bharti Airtel was almost unchanged at Rs 749.30. Its consolidated net profit as per US accounting standards rose 21% to Rs 2239.30 crore on 26% growth in sales to Rs 9824.50 crore in Q4 March 2009 over Q4 March 2008. The company also announced a 2-for-1 stock split. The result was declared on 29 April 2009.

India's second largest private sector bank by operating income HDFC Bank was unchanged at Rs 1100.70. 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 on Thursday 23 April 2009.

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 largest private sector bank by net profit ICICI Bank jumped 10.50% after Goldman Sachs raised its rating on the stock to 'buy' on improving core earnings.

ICICI's net profit fell 35% to Rs 743.76 crore on a 11.4% decline in operating income to Rs 9203.36 crore in Q4 March 2009 over Q4 March 2008. The net profit slipped 9.6% to Rs 3758.13 crore on a 2.3% fall in operating income to Rs 38696.27 crore in the year ended March 2009 over the year ended March 2008.

India's largest bank in terms of assets and branch network State Bank of India (SBI) fell 2.3%. SBI chairman O P Bhatt on 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 copper maker by sales Sterlite Industries India rose 2.80% on better-than-expected Q4 numbers. Sterlite Industries India reported a 54.62% fall in consolidated net profit to Rs 598.25 crore in Q4 March 2009 over Q4 March 2008. Total income declined 34.76% to Rs 4800 crore in Q4 March 2009 over Q4 March 2008.

India's monsoon, forecast to be near normal this year, may arrive a week earlier than the normal 1 June 2009 date, boosting prospects for an early planting of crops such as rice, oilseeds and cotton.

The weather office does not foresee a delay in the onset of the June-to-September rainy season, D Sivananda Pai, a director at India Meteorological Department, said on 28 April 2009, on a conference call organized by brokerage Edelweiss Securities. India's 235 million farmers rely on the timing of the four- month season to decide which crops to grow.

UBS's lead economic indicator in India has climbed for three consecutive months pointing to a strong recovery in industrial activity by June 2009, it said in a note late on Friday, 24 April 2009. UBS said the key variables which have boosted its lead indicator index was the government bond yield spread, real (M1) money supply and a revival in foreign capital inflows. "Our base-case scenario is for the Indian economy and corporate earnings to bottom out by the second half of 2009/10 and for full recovery in 2010/11," it said. UBS said it is positive on the Indian stock market on a 12 month view with overweight recommendation for autos, metals, banks, real estate and conglomerates.

The Reserve Bank of India (RBI) said on Tuesday it had extended up to 31 October 2009, the ceiling on the rates of interest on pre-shipment rupee export credit of up to 270 days and post-shipment rupee export credit up to 180 days at benchmark prime lending rate minus 2.5%. The earlier validity was up to 30 April 2009.

The Reserve Bank of India (RBI) governor D. Subbarao on Saturday, 25 April 2009, said unwinding of fiscal stimulus in an orderly manner is one of the major challenges going forward. The central bank governor also highlighted other challenges ahead. These include implementing the fiscal stimulus packages, particularly stepping up public investment, revival of private investment demand, maintaining flow of credit while ensuring credit quality.

For the central bank, which is also the regulator of the financial markets, preserving financial stability along with provision of adequate liquidity is another task that will have to be addressed, according to the RBI governor. Besides, it will have to ensure an interest rate environment that supports the return of the economy to a high growth path.

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.