Bulls proclaim victory for the ninth week in a row

Firm market sentiments on the back of sustained buying support from foreign institutional investors (FIIs) helped the benchmark index BSE Sensex to close in the positive terrain in the week, completing its ninth winning-week. But volatility ruled the roost as some market participants booked profits ahead of the keenly-awaited general election outcome next week.

FII inflow in May 2009 totaled Rs 3,269.60 crore, and the inflow in calendar year 2009 totaled Rs 3,982.40 crore (till 7 May 2009).

The 30-share BSE Sensex rose 473.18 points or 4.15% to 11,876.43, in week ended 8 May 2009. The broader 50-unit Nifty rose 146.75 points or 4.22% to 3620.70 in the week.

The BSE Mid-Cap index rose 7.30% to 3,770.42 and the BSE Small-Cap index rose 8.54% to 4,277.26 in the week.

Trading for the week began on an upbeat note, with key benchmark indices striking 7-month highs on Monday, 4 May 2009. Strong domestic and global economic data and aggressive build-up of fresh derivatives positions in May 2009 series triggered a solid rally on the bourses. The BSE 30-share Sensex jumped 731.50 points, or 6.41%, to 12,134.75, registering its biggest single day point gain since 31 October 2008. The S&P CNX Nifty advanced 180.05 points, or 5.18%, to 3,654.

The two key benchmark indices - the BSE Sensex and the S&P CNX Nifty saw divergent trend on Tuesday, 5 May 2009, with the Sensex falling marginally and the S&P CNX Nifty rising slightly in what was a highly choppy trading session. The BSE 30-share Sensex ended lower by 3.67 points, or 0.34%, at 12,092.96. The S&P CNX Nifty rose 7.90 points, or 0.22%, to 3,661.90

Political uncertainty pulled the market lower in a choppy trading session on Wednesday, 6 May 2009, with the barometer index BSE Sensex falling below the psychological 12,000 mark. There was a sudden sell-off after the Sensex surged to a 6-month high in afternoon trade on the back of rally in Asian shares. The BSE 30-share Sensex lost 178.33 points, or 1.47%, to 11,952.75. The S&P CNX Nifty shed 36.85 points, or 1.01%, to 3,625.05.

Firm global markets lifted the domestic bourses in what was a highly volatile trading session on Thursday, 7 May 2009. The BSE 30-share Sensex rose 164.19 points, or 1.37%, to 12,116.94. The S&P CNX Nifty gained 58.85 points or 1.62% to 3,683.90, its highest closing since 3 October 2008.

Indian markets drifted lower Friday, 8 May 2009, as political uncertainty loomed large. The BSE 30-share Sensex fell 240.51 points, or 1.98%, to 11,876.43. The S&P CNX Nifty fell 63.20 points or 1.72% to 3,620.70.

India's largest private sector firm by market capitalisation and oil refiner Reliance Industries (RIL) rose 5.23% in the week on market expectations of a strong growth in bottom line in coming quarters from sale of gas which it started pumping last month from its deep-sea field off the east coast.

India's biggest engineering & construction firm by revenue Larsen & Toubro (L&T) rose 12.65%. L&T on 16 April 2009, said the company expects its order inflow to grow by 25-35% in FY 2010.

Auto stocks spurted on higher sales last month. The BSE Auto index rose 153.78 points or 4.40% to 3,652.02 in the week

India's largest car maker by sales Maruti Suzuki India rose 1.58% after vehicle sales rose about 15% to 71,748 units in April 2009 over April 2008. In the domestic market, sales grew by 9% at 64,857 units in April 2009 as against 59,539 units in April 2008, while exports grew by 146% at 6,891 units as against 2,797 units last year, the company said in a statement. This is the fourth consecutive month of sales crossing 70,000-units mark, it added.

India's largest tractor maker by sales Mahindra & Mahindra rose 1.65% after its total vehicle sales rose 14.84% to 23,004 units in April 2009 over April 2008. Domestic sales rose 16.6% to 22,617 units in April 2009 over April 2008. Exports fell 39.3% to 387 units.

India's largest commercial vehicle maker by sales Tata Motors rose 8.31%. Tata Motors total vehicle sales fell 1.7% to 37,518 units in April 2009 over April 2008. Domestic sales rose 1.2% to 36,257 units, while commercial sales rose 8.8% to 22,847 units. Passenger vehicles sales, however, declined 4.1% to 14,615 units and exports fell 45% to 1,261 in April 2009 over April 2008.

Metal stocks soared after manufacturing in China expanded for the first time in nine months. The BSE Metal index surged 1,064.06 points or 15.45% to 7,949.87.

India's largest steel maker by sales Tata Steel rose 18.67%. The company said its sales volume surged by 31% to 4.52 lakh tonnes in April 2009 over April 2008 led by robust demand from auto and construction sectors. Steel Authority of India (up 14.36%), Sterlite Industries (up 20.27%), National Aluminum Company (up 15.34%), Hindustan Zinc (up 20.73%) and Hindalco Industries (up 26.83%), soared.

A China purchasing manager's index rose to a seasonally adjusted 53.5 in April 2009 from 52.4 in March 2009, according to a 1 May 2009, statement from the Federation of Logistics and Purchasing. A reading above 50 indicates an expansion.

Banking stocks rose on brisk buying. The BSE Bankex rose 322.25 points or 5.67% to 6,007.47.

India's second largest private sector bank by market capitalisation HDFC Bank rose 3.89% in the week. However, the stock fell 2.83% on Friday, 8 May 2009, after DBS Group, Southeast Asia's biggest bank, sold its entire 2.7% stake in HDFC Bank through the block deals on BSE that day.

India's largest private sector bank by net profit ICICI Bank rose 8.97%.

India's largest bank in terms of assets and branch network State Bank of India (SBI) rose 3.71%. SBI will announce Q4 March 2009 results on Saturday, 9 May 2009. A total 13 brokerages expect a between 15% fall to a 39% rise in SBI's net profit at between Rs 1601.20 crore to Rs 2626.60 crore in Q4 March 2009 over Q4 March 2008.

Outsourcing focussed IT stocks shrugged off US governments' plan to scrap tax incentives that encourage American firms to ship jobs overseas. The BSE IT index rose 62 points or 2.33% to 2,725.35 in the week.

India's second largest software services exporter by sales Infosys rose 0.94%. India's third largest software services exporter by sales Wipro jumped 7.41%. India's largest software services exporter by sales TCS rose 1.13%.

Analysts feel that US government's plan to scrap tax incentives that encourages American firms to ship jobs overseas is unlikely to dent business for Indian outsourcers. US president Barack Obama on Monday, 4 May 2009, announced plans to reduce tax breaks for US-based multinationals shipping jobs to places like India. Instead, the tax incentives would now go to those creating jobs inside the US, in places like the Buffalo city, New York.

Currently, US businesses that invest overseas can take an immediate tax deduction for expenses supporting their overseas investments. They can also defer the payment of US taxes on the profits they make from such investments. But, now the Obama Administration wants to ensure that companies do not receive deductions for expenses supporting their offshore investments until they pay tax on their offshore profits. This is intended to disincentivise US companies from retaining profits abroad.

Infosys said the proposal, if implemented, was unlikely to reverse the outsourcing of a gamut of services by US firms to Indian companies. "The current proposal, as we understand, is to close corporate tax loopholes on US multinational corporations and crack down on their overseas tax havens," the company said in a statement. "We do not believe that it has anything to do with IT outsourcing done by US corporations.", Infosys said.

Annual rate of inflation as measured by the wholesale price index rose marginally 0.7% in the week ended 25 April 2009 from 0.57% the week before, data released by government showed on 8 May 2009.

The six core industries which constitute 26.7% of the Index of Industrial Production (IIP) grew at 2.9% in March 2009. Core sector growth in March 2009 was better due to higher output of cement and electricity, which was supported by the coal and petroleum products sectors. However, crude and finished carbon steel output contracted, compared to March 2008, pulling down the overall growth rate of the core sector.

According to data released by the ministry of commerce and industry on Wednesday 29 April 2009, the core sector grew at 2.7% during the financial year ended March 2009, compared to a growth of 5.9% in the financial year ended March 2008.

Data for the IIP for March 2009 will be released on 12 May 2009, by the Central Statistical Organisation.

The ABN AMRO Bank purchasing managers' index (PMI) based on a survey of 500 companies, rose to 53.3 in April 2009 from March 2009's 49.5. The figure above 50 indicates expansion while below 50 indicates contraction of manufacturing activity.