Sensex up 29% in less than a month

Key benchmark indices extended recent strong gains as auto, realty, metal and capital goods stocks rose. Volatility was high. The BSE 30-share Sensex jumped 186.04 points, or 1.8%, off close to 110 points from the day's high and up close to 120 points from the day's low.

The market was volatile. Firm Asian stocks, resumption of buying by foreign funds and steps taken by the G20 leaders to revive the global economy, took the BSE Sensex to a five-month high at the onset of the trading session. The Sensex rose for the fourth day in a row today. Expectations of a further easing of the monetary policy by the Reserve Bank of India (RBI) also supported the market.

After a sharp surge in early trade, the market pared gains in mid-morning trade. It lost further ground in early afternoon trade as most Asian stocks pared strong intraday gains. The market regained strength in afternoon trade as European stocks rose at the onset of the trading session. A sharp slide was witnessed in mid-afternoon trade. The market regained strength in late trade.

Indian stocks have risen sharply in the past few days as a part of a solid rally in global stocks triggered by hopes the worst of the global economic recession may be over. From a 3-year closing low of 8,160.40 on 9 March 2009, the Sensex has risen 2,374.47 points or 29.09%.

European shares rose on Monday, tracking a late rally in the United States on Friday, as optimism for economic recovery picked up. Key benchmark indices in France, Germany and UK were up by between 0.09% to 0.69%.

Though most of the Asian markets were in green, many had pared earlier strong gains. Japan's Nikkei 225 Average 225 which had ended the morning trading session with a gain of 2.3%, closed 1.24% higher for the day. Key benchmark indices in South Korea, Singapore, Hong Kong and Taiwan were off the day's high. Key benchmark indices in South Korea, Singapore and Taiwan were now up by between 0.48% to 1.49%.

However, Hong Kong' Hang Seng which had pared intrday regained strength again and ended 3.11% higher for the day.

Asian stocks rose today, 6 April 2009, after Federal Reserve Chairman Ben S. Bernanke said policies to unfreeze credit markets are working. The Chinese stock market was closed for a holiday.

Trading in US futures showed the Dow could fall 28 points at the opening bell on Monday, 6 April 2009. The Dow futures were volatile.

US markets closed the week on Friday 3 April 2009 on a positive note. The Dow posted its biggest four week gain in 75 years. The Dow Jones closed up 36 points at 8,018, the Nasdaq added 19 points to close the day at 1,621 and the S&P 500 gained 8 points and closed at 843 on Friday.

Meanwhile, investors moved more cash out of safe-haven money market funds and moved it into higher-risk investments in the week ended 1 April 2009, data from Boston-based fund tracker EPFR Global showed on Friday, 3 April 2009. During the week ended 1 April 2009, long-only dedicated emerging market equity funds witnessed net inflows of $1.2 billion, according to the US-based EPFR Global, which provides fund flows and asset allocation data to financial institutions.

The broader category of Global Emerging Market (GEM) equity funds had net inflows of $867.5 million. However, India had net outflows of $4.1 million in the week ended 1 April 2009. It seems that emerging markets have once again become attractive investment destinations, promising better growth prospects, says EPFR Global managing director Brad Durham.

In the latest period, investors pulled $9.68 billion out of money market funds while developed equity markets such as the United States and Japan had outflows of $1.095 billion and $487.1 million, respectively.

In London, G20 leaders on 2 April 2009 agreed to provide a total of $1 trillion in resources to the International Monetary Fund (IMF) and other international institutions in an effort to confront a deep global economic downturn. The figure includes an agreement to boost the IMF's lending resources to $750 billion from the current level of $250 billion, the G20 leaders said in a joint statement issued at the end of a two-day emergency summit.

The G20 also agreed to provide $250 billion in trade-finance credits to combat a steep slump in global trade flows. "The global crisis is hitting emerging market and poor countries hard," said Dominique Strauss-Kahn, the IMF's managing director, in a statement. The G20 leaders have sent a powerful signal that the international community is committed to support these countries, including by ensuring that the IMF has the resources available, he said.

Citigroup Inc. economists Don Hanna and Jurgen Michels called the summit agreement a boon to emerging markets in a note to clients. The G-20 said they would couple the financing moves with steps to give emerging economic powerhouses such as China, India and Brazil a greater say in how the IMF is run.

Mexico said Wednesday, 1 April 2009, it will seek $47 billion from the IMF under the Washington-based lender's new Flexible Credit Line, which allows some countries to borrow money with no conditions.

Closer home, expectations of a further easing of the monetary policy by the Reserve Bank of India (RBI) remain with inflation near zero. Inflation as measured by the wholesale price index rose 0.31% in the 12 months to 21 March 2009, marginally above the previous week's annual rise of 0.27%, government data showed on 2 April 2009. The annual inflation rate was 7.85% during the corresponding week of the previous year.

Foreign funds have resumed buying of Indian stocks. Foreign funds bought shares worth Rs 696.30 crore on Thursday, 2 April 2009. The foreign funds bought shares worth a net Rs 234.80 crore on Wednesday, 1 April 2009. The inflow followed heavy sales in the preceding three trading sessions. Foreign funds dumped stocks worth a net Rs 1266.70 crore in three trading sessions from 27 March 2009 to 31 March 2009. Before the selling, foreign institutional investors had mopped up stocks worth Rs 3635 crore in a short span from 17 March 2009 to 26 March 2009.

However, a recent sharp volatility in the rupee may dissuade fresh buying by foreign funds. The rupee has bounced back after hit a record low beyond 52 per dollar early last month. The Indian rupee strengthened past 50 per dollar on Monday, 6 April 2009, its strongest in more than a month. The partially convertible rupee was at 49.98 per dollar, stronger than its Thursday's close of 50.33/35. The currency market was closed on Friday for a local holiday.

Domestic institutional investors have been absorbing heavy selling by foreign funds witnessed in first two months of calendar year 2009.

Indian manufacturing activity contracted for a fifth straight month in March 2009 as demand remained depressed by the global economic downturn, although there were some signs of improvement, a survey showed on Wednesday, 1 April 2009. The new orders index rose to 49.5 in March 2009 from 45.9 in February 2009.

Signs of improvement in the manufacturing sector has helped offset dismal exports data. India's exports fell an annual 21.7% in February 2009 to $11.91 billion, data released by the government duding trading hours on Wednesday, 1 April 2009, showed. It was a fifth straight monthly fall in exports as the global slowdown slashed demand for Indian goods. The trade deficit narrowed to $4.9 billion in February 2009 from $6.1 billion in January 2009 due to a sharp fall in imports. Imports fell an annual 23.3% to $16.82 billion in February 2009. Oil imports fell 47.5% during the month from a year earlier to $4.05 billion.

Prime Minister Manmohan Singh on 24 March 2009 said India's economy will revive in a big way in six to seven months as stimulus packages start to take effect. On the same day, Planning Commission Deputy Chairman Montek Singh Ahluwalia scaled down the GDP (gross domestic product) growth projection for the current fiscal to 6.5% from the 7.1% increase estimated by the government earlier during the year, owing to the ongoing global crisis.

Meanwhile, there are signs that the credit flow to businesses is improving. During the fortnight ended 13 March 2009, loans sanctioned by scheduled commercial banks (SCBs), including regional rural banks, went up by Rs 22,423 crore. This was the third fortnight in a row when credit flow went up. Earlier, an extreme risk aversion by banks had chocked credit flow to the industry - the lifeline of business.

Indian corporate bonds sales posted their best quarter on record as government-backed infrastructure and finance companies raised funds to bolster their capital. Indian companies raised Rs 37800 crore from bonds in Q1 March 2009, 44% more than in the same period a year earlier. State-owned lender India Infrastructure Finance Co. raised Rs 7370 crore in the biggest bond sale of the quarter, followed by a Rs 3950-crore issue by the National Bank for Agriculture & Rural Development, known as Nabard.

Earlier the global financial crisis ends and sooner the risk appetite of global investors and global companies improves, better it will be for India Inc. An increase in risk appetite of global investors/global companies will help Indian firms raise overseas funds required for business expansion. The global financial crisis has chocked the overseas funding route for Indian firms.

Raising funds may become difficult for small and medium enterprises (SMEs) with new lending regulations for banks, popularly known as Basel II norms coming into force from 1 April 2009. All business units, irrespective of their size, will need to take ratings for their enterprises to secure working capital, loans, and other funds from banks.

Lack of funding has hit a slew of long-gestation infrastructure projects in India. World Bank Chief Economist & Senior Vice-President, Dr Justin Yifu Lin, on 13 March 2009, said if India can improve its infrastructure such as electricity, power, transportation and port facilities, it will be well on its path to achieve a 9-10% growth.

India's fiscal deficit for the April-February 2009 period was Rs 3,07,000 crore ($61 billion), or 94.1% of an upwardly revised budget target, a government statement said on Tuesday, 31 March 2009. In February 2009, the government revised upwards its fiscal deficit estimate for the year ending 31 March 2009 to Rs 3, 27, 000 crore, equivalent to 6% of gross domestic product from 2.5% estimated earlier. The deficit has widened after the government announced extra spending of close to Rs 1,50,000 to cover a farm debt scheme, subsidies and steps to stimulate a slowing economy.

The upside on the domestic bourses will be capped in the next two months due to political uncertainty ahead of parliamentary election to be held between mid-April 2009 to mid-May 2009. More so at a time when early estimates point a fractured mandate. A group of smaller political parties, including the communists, have formally launched a Third Front in a bid to provide an alternative to the two main parties viz. the Congress and the BJP.

Meanwhile, the Bharatiya Janata Party (BJP) in its manifesto for the parliamentary elections released on Friday, 3 April 2009, said it will provide 35 kilogram (kg) of rice or wheat at Rs 2 per kg per month for Below Poverty Line (BPL) families against food coupons.

The party has gone out to woo the farmers offering them to waive off all current loans and provide fresh loans at four per cent interest rate. Every school-going girl child belonging to BPL families will be provided by a bicycle, the manifesto said, which also promised hike in income exemption limit to Rs. three lakh for the salaried class and IT exemption to all categories of defence personnel.

If it comes to power, BJP will take steps to generate employment through massive public spending on infrastructure projects. It will complete the implementation of Atal Bihari Vajpayee's dream projects: National Highway Development Project by building 15-20 kilo metre of new highways every day; and Pradhan Mantri Gram Sadak Yojana, to link all villages with over 500 people by all-weather road.

BJP said it will introduce schemes to encourage private industry and services sectors. It said it will ensure a low tax, low interest rate regime.

The party has promised exemption of personal income tax for those earning up to Rs 3 lakh per annum. For women and Senior Citizens, the exemption will be Rs 3.5 lakh per annum. This will benefit over 3.5 crore people.

BJP has also promised scrapping of the Fringe Benefit Tax (FBT), which is a source of harassment to employees and employers alike.

If it comes to power, BJP will construct 10,00,000 housing for the poor units every year, kick-start the real estate sector that is suffering at present and bring down interest on housing loans to make urban housing affordable.

The party has promised a complete exemption for interest income on bank deposits for all other than corporates and those who have business income.

To boost the tourism sector, the party will identify 50 destinations and develop infrastructure, connectivity. It will take steps to double foreign tourist arrivals in 5 years to help generate employment in hospitality industry.

BJP said it will ban foreign direct investment (FDI) in retail sector to help domestic retail trade.

The BSE 30-share Sensex was up 186.04 points, or 1.8%, to 10,534.87 its highest closing since 10 November 2008. At the day's high of 10,654.89, the Sensex rose 306.06 points in early trade its highest since 5 November 2008. At the day's low of 10,410.44, the Sensex rose 61.61 points in mid-afternoon trade.

The S&P CNX Nifty was up 45.55 points or 1.42% to 3,256.60 its highest closing since 16 October 2008.

The BSE clocked a turnover of Rs 4,672 crore today, lower than Rs 4,926.47 crore on Thursday, 2 April 2009.

Nifty April 2009 futures were at 3,260.25, at a premium of 3.65 points as compared to the spot closing of 3256.60. Turnover in NSE's futures & options (F&O) segment fell to Rs 48,445.32 crore from Rs 56,491.50 crore on Thursday, 2 April 2009.

The BSE Mid-Cap index rose 2.48% and the BSE Small-Cap index rose 3.21%. Both the indices outperformed the Sensex.

The BSE Consumer Durables index (up 5.84%), the BSE Capital Goods index (up 3.75%), the BSE Metal index (up 3.65%), the BSE Auto index (up 3.59%), the BSE Realty index (up 2.97%), the BSE Bankex (up 2.15%), the BSE TECk index (up 2%) outperformed the Sensex.

The BSE IT index was flat and matched the performance of Sensex.

The BSE FMCG index (down 1.82%), the BSE Healthcare index (up 0.08%), the BSE PSU index (up 0.65%), the BSE Oil & Gas index (up 0.99%), the BSE Power index (up 1.38%), underperfomed the Sensex. The BSE IT index was unchanged and underperformed the Sensex.

The market breadth, indicating the overall health of the market, was strong on BSE with 1,871 stocks advancing as compared with 651 that declined. A total of 57 shares remained unchanged.

From the 30 share Sensex pack 22 stocks rose while rest fell.

India's largest private sector company by market capitalization and oil refiner Reliance Industries (RIL) rose 0.59% to Rs 1,672.25 after the company started pumping gas from the Krishna Godavari (KG) last week which is estimated to add close to $2 billion to the company's profit at peak production levels. However, the stock came off the day's high of Rs 1,718.

Meanwhile, as per reports Reliance Industries (RIL) and ONGC Videsh, the overseas arm of Oil and Natural Gas Corporation plan to jointly bid for oil blocks in Venezuela, and may also include Indian Oil Corporation in the alliance.

India's largest exploration firm by sales ONGC rose 1.76% and private sector oil exploration firm Cairn India rose 1.33% as crude oil prices surged nearly 2% in Asian electronic trades on Monday, 6 April 2009. Rise in crude oil prices would result in higher realizations from crude sales for the oil exploration firm.

Banking stocks rose on hopes lower interest rates may boost lending growth. The stocks were volatile. India's largest private sector bank by net profit ICICI Bank rose 4% to Rs 374.65. The stock hit the high of Rs 380.50 and the low of Rs 363.05. Its American depository receipts (ADR) rose 1.39% on Friday, 3 April 2009. ICICI Bank's advance tax payment remained unchanged at Rs 250 crore in Q4 March 2009 when compared to Q4 March 2008.

India's second largest private sector bank by operating income HDFC Bank rose 2.73% to Rs 1,062.95. The stock hit the high of Rs 1,074.80 and the low of Rs 1039.50. Its ADR rose 2.63% on Friday. Its advance tax payment rose 10% to Rs 275 crore in Q4 March 2009 over Q4 March 2008.

India's largest bank in terms of assets and branch network State Bank of India fell 1.43% to Rs 1,128.95. It hit the high of Rs 1,199 and a low of Rs 1,113.15. Its advance tax payment jumped 27.64% to Rs 1810 crore in Q4 March 2009 over Q4 March 2008.

India's biggest dedicated housing finance firm by operating income HDFC rose 7.37%. It announced a 50 basis points reduction in its retail prime lending rate (RPLR) to 14% effective 25 March 2009.

Some healthcare stocks fell after recent gains triggered by expectations of better Q4 March 2009 results following reports of higher advance tax payment by these firms. Lupin, Cipla, Ranbaxy Laboratories, Sterling Biotech fell by between 0.35% to 4.41%.

Some FMCG shares fell as a strong recovery in equity markets forced investors to dump these so called defensive stocks. ITC, Hindustan Unilever, Marico, Dabur India and United Spirits fell by between 0.16% to 4.38%.

Outsourcing focussed IT stocks reversed early gains on a stronger rupee. IT stocks had surged in the past few days on hopes aggressive measures by the United States to revive the economy may bear fruit. US is the biggest market for Indian IT firms. India's second largest software services exporter Infosys Technologies fell 0.42% to Rs 1,414.45. Its ADR rose 1.57% on Friday.

Recent reports said it may win a large IT project from the government, which will run on a transaction-based pricing model, similar to the passport processing contract its larger rival Tata Consultancy Services (TCS) won last year. The contract is among the many large IT contracts that are up for bidding from government departments or public sector undertakings, reports suggest.

India's third largest software services exporter, Wipro fell 0.3% to Rs 269.45. Its ADR rose 5.76% on Friday. Recently its unit Wipro Infotech won an outsourcing contract worth Rs 1,182 crore from the Employees State Insurance Corporation (ESIC).

India's largest software services exporter by sales TCS rose 0.18%. The company's advance tax payment fell 54.3% to Rs 53 crore in Q4 March 2009 over Q4 March 2008.

India's fifth largest IT firm by sales HCL Technologies spurted 5.01% on reports the firm has bagged a five-year IT services contract worth close to $170 million or Rs 848 crore from US-based Microsoft Corporation.

Satyam Computer Services jumped 13.16% on reports private equity investor Wilbur Ross and Larsen & Toubro may reportedly jointly bid for a controlling stake in Satyam.

A stronger rupee affects operating profit of IT firms negatively as they earn most of their revenues from exports.

Cement shares fell on reports the government has warned cement makers that it will not extend any stimulus package to the industry unless they reduce the price of the building material. ACC, Ambuja Cements, Grasim Industries, Ultratech Cement fell by between 1.82% to 3.14%.

The warning followed the three rounds of price increases by cement companies in the past two months despite the government's move to contain its price by reducing excise duty on cement.

Indian largest engineering and construction firm by sales Larsen & Toubro rose 7.4%. It had recently won two orders worth a total of Rs 1,344 crore ($265 million) from refiner Mangalore Refinery and Petrochemicals. It had also bagged two orders aggregating Rs 1,143 crore ($227 million) from Tata Steel.

India's largest equipment maker by sales Bharat Heavy Electricals was flat at Rs 1,531.90. It had reported a 6.06% rise in net profit to Rs 3,039 crore on 28.52% rise in turnover to Rs 27,505 crore for the financial year ended March 2009 over financial year ended March 2008, as per tentative figures. The company announced the provisional figures during trading hours on Thursday, 2 April 2009.

Other capital goods stocks, BEML, Praj Industries, Thermax, ABB, rose by between 0.53% to 8.18%.

Rate sensitive real estate shares rose on hopes lower rates will spur housing demand. DLF, Indiabulls Real Estate and Housing & Development Infrastructure rose by between 3.07% to 8.91%. Most of the realty deals including sale of commercial property and housing sales is driven by finance.

India's largest steel maker by sales Tata Steel rose 4.89% on reports its output grew 12.6% to 5.6 million tonnes in the financial year ended March 2009 over the financial year ended March 2008.

JSW Steel rose 2.35% after its steel output grew 11 % to 1.1 million tonnes in Q4 March 2009 over Q4 March 2008.

Other metal stocks, Hindustan Zinc, Steel Authority of India, Sterlite Industries, National Aluminum Company and Hindalco Industries, rose by between 0.2% to 6.39%, on firm base metal price on the London Metal Exchange.

India's largest commercial vehicle maker by sales Tata Motors rose 3.05% on improved sales in the month just gone by. Tata Motors' domestic sales fell 13% to 52,686 units in March 2009 over March 2008. Nevertheless, the domestic sales rose 24% in March 2009 over February 2009.

India's largest commercial vehicle maker by sales Ashok Leyland fell 1.86% after its total vehicle sales fell 52% to 5,112 units in March 2009 over March 2008.

India's largest car maker by sales Maruti Suzuki India rose 0.55%. The total vehicle sales rose 21.9% to 85,669 units in March 2009 over March 2008, the company said last week.

India's largest tractor maker by sales Mahindra & Mahindra rose 14.26%. The company, last week, posted a 6% rise in total vehicles sales to 26,209 in March 2009 over March 2008.

India's largest motorbike maker by sales Hero Honda Motors rose 3.01%. The company, last week, reported 10.2% rise sales to 3.53 lakh unit in March 2009 over March 2008.

Satyam Computer Services clocked the highest volume of 2.84 crore shares on BSE. Suzlon Energy (2.23 crore shares), Reliance Natural Resources (2.02 crore shares), Cals Refineries (1.39 crore shares) and Essar Oil (1.32 crore shares) were the other volume toppers in that order.

Reliance Infrastructure clocked the highest turnover of Rs 281.13 crore on BSE. Reliance Industries (Rs 242.26 crore), Reliance Capital (Rs 163.73 crore), ICICI Bank (Rs 158.42 crore) and Essar Oil (Rs 144.26 crore) were the other turnover toppers in that order.