Market gains for the 12th straight week

Key benchmark indices surged to 8-month high, extending gains for the twelfth straight week, boosted by strong inflow from foreign funds and positive global cues. Further signs of recovery in domestic and global economy and anticipation of a strong push for economic reforms by the newly elected United Progressive Alliance (UPA) government bolstered the bulls. The market gained in 4 out of 5 trading sessions in the week ended Friday, 29 May 2009. The BSE Small-Cap and BSE Mid-Cap indices outperformed the Sensex

On the back of higher government expenditure, India's economy expanded 5.8% in the fourth quarter ended March 2009 compared with a year earlier. That matched a revised gain of the previous quarter, government data announced at 11:00 IST on Friday, 29 May 2009 showed. Economists were expecting a 5% increase. The GDP grew 6.7% in the year ended March 2009, slowing from 9% in the previous year.

A leading indicator of German business activity rebounded in May 2009, hinting that the economic slump is easing, though the gain was less than expected. The Ifo business climate index, released on Monday, 25 May 2009 rose for the second straight month, to 84.2 in May 2009 from 83.7 in April 2009. The outcome fell below forecasts for a reading of 85.

In Asia, Bank of Japan Governor Masaaki Shirakawa said the economy is likely to experience a mild recovery as exports and production improve. He, however, said the outlook on the economy remains fraught with considerable uncertainties.

The 30-share BSE Sensex gained 738.10 points or 5.31% to 14,625.25, in week ended Friday, 29 May 2009. The broader 50-issue Nifty jumped 210.45 points, or 4.96%, to end the week at 4448.95

The BSE Sensex has surged 4977.94 points or 51.59% in calendar year 2009. From a 3-year closing low of 8,160.40 on 9 March 2009, the Sensex is up 6464.85 points or 79.22%.

The BSE Mid-Cap index gained 301.06 points or 6.33% to 5,056.74 and the BSE Small-Cap index advanced 473.66 points or 8.59% to 5,986.82 in the week ended 29 May 2009. Both these indices outperformed the Sensex

Key benchmark indices saw divergent trend on first day of the trading week on Monday, 25 May 2009. However, frenzied buying continued in small-cap and mid-cap shares in what was a highly volatile trading session. The BSE 30-share Sensex rose 26.07 points or 0.19% to 13,913.22. However the S&P CNX Nifty fell 0.95 points or 0.02% to 4,237.55.

The market lost ground on Tuesday, 26 May 2009, on concerns a glut of share sales will soak liquidity from the secondary market. The BSE 30-share Sensex fell 323.99 points or 2.33% to 13,589.23 and the S&P CNX Nifty slipped 120.85 points or 2.85% to 4,116.70.

Bulls were in back in charge of the proceedings on Wednesday, 27 May 2009 as key benchmark indices clocked smart gains after Finance Minister Pranab Mukherjee said reviving growth momentum is a top priority for the government. The BSE 30-share Sensex jumped 520.41 points or 3.83% to 14,109.64 and the S&P CNX Nifty gained 159.35 points or 3.87% to 4,276.05.

Finance Minister Pranab Mukherjee's comments that the government would take advantage of its political stability and push long-pending reforms boosted the bourses on Thursday, 28 May 2009. However volatility was high as traders rolled over positions from May 2009 series to June 2009 series in the futures & options (F&O) segment on last day of expiry. The BSE 30-share Sensex surged 186.37 points or 1.32% to 14,296.01 and the S&P CNX Nifty advanced 61.05 points or 1.43% to 4,337.10

Key benchmark indices extended gains for third straight session on Friday, 29 May 2009 as data showing a better-than-expected fourth quarter GDP growth strengthened expectations the economy will grow faster in the fiscal second-half of the year that began on 1 April 2009. The BSE 30-share Sensex rose 329.24 points or 2.3% to 14,625.25 its highest closing since 10 September 2008. The S&P CNX Nifty rose 111.85 points or 2.58% to 4,448.95 its highest closing since 9 September 2008.

India's largest private sector company by market capitalization and oil refiner Reliance Industries (RIL) rose 4.32% to Rs 2277.50 in the week on reports it has struck gas in two blocks (D3 and D9), with estimates putting the natural gas reserves at 20 trillion cubic feet (tcf). Hardy Oil & Gas Plc has 10% stake each in the two blocks where RIL is the operator with 90% interest.

Shares of state-run oil firms surged boosted by Oil Minister Murli Deora's comments on deregulation of oil prices. BPCL (up 3.90%), HPCL (up 13.28%), and IOC (up 17.06%), gained.

Soon after taking charge, Oil Minister Deora on Friday, 29 May 2009 said a proposal to allow firms set retail fuel prices based on market prices would be sent to cabinet for discussion within six weeks. Currently the government sets prices for retail fuel such as petrol and diesel below actual prices, and partially subsidises state-run marketing firms for the difference.

India's largest oil exploration firm by revenue Oil & Natural Gas Corporation rose 12.49% to Rs 1175.95 on a recent newspaper report that the government may double the price of natural gas. The government may double the administered price of natural gas to $4.2 per million British thermal units. The increase will benefit ONGC and Oil India which sell the fuel at prices fixed by the government, according to the report.

India's largest construction & engineering firm by sales Larsen & Toubro gained 8.01% to Rs 1405.60 after net profit rose 3.28% to Rs 998.52 crore on 24.01% rise in total income to Rs 10835.79 crore in Q4 March 2009 over Q4 March 2008. The company announced the results during trading hours on Thursday, 28 May 2009.

Notwithstanding a slowdown in the Indian capital goods and infrastructure sectors, L&T's order intake rose 23% to Rs 51621 crore in the year ended March 2009 (FY 2009). The order book stood at Rs 70319 crore as on 31 March 2009, which is two times its revenue of Rs 34045 crore in FY 2009, giving a strong revenue visibility.

India's largest electric equipment maker by sales Bharat Heavy Electricals advanced 9.74% to Rs 2174.90 as net profit rose 21.29% to Rs 1347.47 crore in Q4 March 2009 over Q4 March 2008. The company announced the results after trading hours on Wednesday, 27 May 2009

India's second largest private sector power generation firm by sales Reliance Infrastructure shot up 13.93% to Rs 1276.85. The board of Reliance Infrastructure on Sunday, 24 May 2009, approved a new preferential offer of 43 million warrants to the company's promoters, convertible at Rs 1,000 a share, cancelling the current offer of equal size which expires on 19 July 2009 and which carried a conversion price of Rs 1,822 a share. If fully exercised the promoters the Anil Dhirubhai Ambani group would raise their stake in the company to 48%, from 38% currently, at a price of Rs 4,300 crore (against over Rs 7,800 crore through the earlier one).

Metal stocks gained on firm prices on the London Metal Exchange. Sterlite Industries (up 22.59%), Hindalco Industries (up 10.14%), Steel Authority of India (up 9.05%), and Tata Steel (up 11.85%), edged higher

India's largest drugmaker by sales Ranbaxy Laboratories jumped 26.21% to Rs 278.80. In a swift and unexpected move, Japanese drug maker Daiichi Sankyo on Sunday, 24 May 2009, took complete control of Ranbaxy Laboratories in which it had acquired 63.9% stake in June 2008 after all representatives of the former Indian promoter family resigned from the board. Following a board meeting on Sunday morning, former promoter Malvinder Mohan Singh, whose term was originally supposed to run till 2013, resigned as Chairman and Managing Director.

Besides Singh, two other Singh-family Board nominees, Sunil Godhwani and Balvinder Dhillon, also resigned. Tsutomu Une from Daiichi has been appointed chairman. Atul Sobti, who was originally nominated on the board by the former Indian promoters, has been appointed as CEO and MD for three years.

bank stocks rose on expectations of financial sector reforms by the Congress-led UPA government. India's second largest private sector lender by market capitalisation ICICI Bank rose 5.59% to Rs 740.70. India's largest private sector bank by market capitalisation HDFC Bank rose 5.35% to Rs 1442.35.

India's largest commercial bank by branch network State Bank of India jumped 7.93% to Rs 1869.10 on reports its credit growth could rise 25% in 2009-10, higher than an expected overall loan growth of 19-20% for the banking sector.

Auto stocks gained on hopes the new government will treat auto sector as a priority sector and attend to some pressing concerns of the sector, mainly differential excise duty, lack of retail finance and lack of focus on infrastructure. Maruti Suzuki (up 6.41%), Hero Honda Motors (up 3.62%), and Bajaj Auto (up 8.95%), rose

India's largest tractor maker by sales Mahindra & Mahindra spurted 7.17% to Rs 675.50 after its net profit jumped 89% to Rs 418.07 crore in Q4 March 2009 over Q4 March 2008. The results were announced during market hours on 28 May 2009.

However India's largest truck maker by sales Tata Motors fell 2.60% to Rs 336.70. The company reported a 50.7% fall in net profit to Rs 1001.26 crore in the year ended March 2009 over the year ended March 2008. The results were announced during market hours on Friday, 29 May 2009.

Realty stocks rose on expectations that stability at the Centre will attract more money from foreign investors into the sector which in turn will boost growth. DLF (up 20.77%), Indiabulls Real Estate (up 17.55%), and Unitech (up 11.93%), rose.

In the last six weeks, three realty firms Unitech, DLF and Indiabulls Real Estate, have together raised Rs 8000 crore through qualified institutional placements (QIPs).

India's top mobile operator by sales, Bharti Airtel lost 4.45% to Rs 819.65 on concerns of earnings dilution after the company on 25 May 2009 said it is in talks to buy 49% of Johannesburg-based MTN, the first step in a potential $23 billion merger. The deal may also see MTN, Africa's largest mobile-phone company, buy 36% of Bharti Airtel

Outsourcing focussed IT rose on a strong recent reading of US consumer confidence index. US is the biggest market for Indian IT firms.

India's largest software services exporter by sales TCS rose 10.38% to Rs 699.75. India's third largest software services exporter by sales Wipro gained 3.49% to Rs 381.55. India's second largest software services exporter by sales Infosys rose 5.44% to Rs 1602.

Shares of state-run companies rose on hopes of recommencement of the PSU disinvestment programme after the Congress-led UPA government got a clear mandate in the Lok Sabha election. NMDC (up 49.53%), HMT (up 27.28%), Shipping Corporation of India (up 5.20%), rose.

It may be recalled that the BJP-led National Democratic Alliance (NDA) had vigorously pursued PSU divestment. However, it was put in deep freeze in the last five years by the Congress-led United Progressive Alliance (UPA) government as the Left parties which supported the UPA government from outside, were bitterly opposed to the idea.

Swiss bank UBS AG's lead economic indicator rose for the fourth consecutive month in April 2009, pointing to a rebound in industrial activity by June 2009, it said in a note on Friday, 29 May 2009.

UBS said the key variables which have boosted its lead indicator index were the government bond yield spread, revival in foreign capital inflows and a rally in the stock markets.

Finance Minister Pranab Mukherjee on Thursday, 27 May 2009 said that a sustained stimulus to economic growth is possible by next round of reforms. He said reviving growth momentum is a top priority for the government adding that fiscal prudence will also be kept in mind.

Mukherjee said the government will stick to fiscal deficit target of 5.5% of GDP in the current financial year that ends on March 2010 (FY 2010). He said the government is committed to fiscal consolidation in 2-3 years. The minister said he would be able to announce the full-budget for FY 2010 by the first week of July 2009 and try to get it approved by 31 July 2009. He said the common man will be the focus of the government policy.

Addressing a press conference, Mukherjee said the industry and business have been hurt by high cost of finance but added that coordinated steps taken by central bank and government have stabilised the economy. He said the liquidity situation eased considerably adding that international capital flows have resumed.

The FM said he hoped banks would take advantage of the monetary policy and make cheap credit available.

The Federation of Indian Export Organisations (FIEO) said on Wednesday, 27 May 2009 that India's exports may have fallen by a third in April 2009 as a world-wide slump continued to hurt overseas demand for local goods. Earlier this month, government data showed India's exports declined by a third in March 2009, its sixth straight fall, dragging down the full year's growth to a paltry 3.4% at $168.7 billion in 2008/09.