Sensex extends gains for seventh straight day

The benchmark index BSE Sensex rose for the straight seventh day on firm global cues. It hits its highest closing since 12 August 2008. The BSE 30-share Sensex rose 94.87 points, or 0.63%, off close to 155 points from the day's high and up close to 110 points from the day's low. Banking stocks pared gains and index heavyweight Reliance Industries faltered. While IT stocks rose. Hopes of renewed reforms and rekindled growth by the new government also bolstered investor sentiment.

The market was volatile. After a firm start tracking positive Asia market turned red for a brief period in mid-morning trade before regaining strength later. Market pared gains after hitting the fresh day's high in early afternoon trade. Market remained firm in afternoon trade. It surged to the fresh day's high in mid-afternoon trade. It pared most of its gains in late trade.

The recent solid surge in the market materialised as foreign funds' pumped Rs 20,606.80 crore in May 2009 and their inflow in calendar year 2009 Rs 21,818.80 crore (till 3 June 2009). As per the provisional data on NSE, foreign funds bought shares worth Rs 465.34 crore on Thursday, 4 June 2009.

Annual monsoon rains may further advance to more parts during the next 48 hours, India Meteorological Department (IMD), said on its website late on Thursday. Monsoon rains, which hit the country's mainland on 23 May ahead of normal schedule of 1 June, encountered a weak phase in the last week of May.

In the political front, President Pratibha Patil addressed to a joint session of both houses on Thursday, 4 June 2009 formally disclosing the agenda of the UPA coalition government. She said that the government would aim to revive economic growth with higher investments in sectors such as infrastructure, while adhering to fiscal prudence. Patil said steps would be taken to encourage foreign investment inflows, list shares of state-run firms and infuse more capital in banks. The government's immediate priority must be to focus on management of the economy that will counter the effect of the global slowdown, she added.

Patil said the new regime will develop a roadmap for listing public sector units, co-ordinate with other countries to bring back illegal money stashed in secret bank accounts, recapitalise public sector banks, and bring in the pension reforms bill.

On the economic front, the government's immediate focus would be on sectors that are adversely hit, especially small and medium enterprises, exports, textiles, commercial vehicles, infrastructure and housing.

There are reasons to believe that the recent strong rally may continue. For one, equity analysts are raising earnings forecasts of India Inc on hopes that the new government will focus on infrastructure sector and push economic reforms to boost growth.

The investors expect a pre-budget rally over the next one month on hopes of accelerated economic reforms and pro-reforms announcements. The UPA government's comfortable victory, without the support of the Left parties, has raised expectations that the government may revive disinvestment programme. The Congress party had in its manifesto released before polls promised to go ahead with disinvestment while retaining a majority holding in the state-run companies. Disinvestment programme was earlier put on backburner due to stiff opposition from the Left front.

Finance Minister Pranab Mukherjee is likely to present the Union Budget in the first week of July 2009 with focus on ‘Aam Admi' while providing special attention to sectors hit hard by global crisis. Railway Budget for the year 2009-10 would be presented on 1 July 2009 followed by Economic Survey on 2 July 2009.

Investors expect financial sector reforms such as increase in the cap on foreign direct investment in insurance sector to 49%, from 26% at present. Finance Minister Pranab Mukherjee on 26 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.

Congress candidate Meira Kumar was elected Speaker of the 15th Lok Sabha unanimously on Wednesday, 3 June 2009. Kumar is the first woman to be elected as the Speaker of the Lok Sabha. The first session of the 15th Lok Sabha on Monday, 1 June 2009. The session will last till 9 June 2009. In all, the Parliament session will have seven sittings.

European shares rose on Friday, with Rio Tinto leading miners higher after scrapping a planned tie-up with Chinalco, and energy companies rising on higher crude prices. Key benchmark indices indices in France, Germany and UK rose by between 0.54% to 1.58%.

. Asian shares rose on Friday as hopes for a global economic recovery drove up appetite for riskier assets, but traders were cautious ahead of U.S. monthly job data. Key benchmark indices in Hong Kong, Japan, South Korea, Singapore rose by between 0.96% to 1.42%. Key indices in Taiwan and China fell by between 0.28% to 0.48%.

U.S. nonfarm payrolls data due later in the day is expected to show employers cut 520,000 jobs in May 2009, lower than 539,000 in April 2009, and the unemployment rate is forecast to rise to 9.2 % from 8.9 % in April 2009.

Trading in the US index futures indicated Dow could rise 19 points at the opening bell today 5 June 2009.

The US markets advanced on Thursday 4 June 2009 as a report showed jobless claims fell last week and banks gained. The Dow Jones Industrial Average gained 74.96 points, or 0.9%, to 8,750.24. The S&P 500 index rose 10.70 points, or 1.2%, to 942.46, and the Nasdaq Composite rose 24.10 points, or 1.3%, to 1,850.02.

In economic news, initial jobless claims fell by 4,000 last week. Continuing claims fell to 6.73 million. It's the first time that it has declined since early January 2009, following 17 straight weeks of record highs. However, retail sales data disappointed. May 2009 sales reports from the nation's largest retailers showed 76% of retailers missed estimates.

The BSE 30-share Sensex rose 94.87 points, or 0.63%, to 15,103.55 its highest closing since 12 August 2008. The Sensex rose 248.62 points at the day's high of 15,257.30 hit in the mid-afternoon trade, its highest since 13 August 2008. At the day's low of 14,993.60, the Sensex fell 15.08 points in mid-morning trade.

The S&P CNX Nifty rose 14.25 points, or 0.31%, to 4,586.90 its highest closing since 11 August 2008. Nifty June 2009 futures were at 4594.80, at a premium of 7.90 points as compared to the spot closing of 4586.90. Turnover in NSE's futures & options (F&O) segment was Rs 65,938.39 crore lower than Rs 66,932.80 crore on Thursday, 4 June 2009.

BSE clocked a turnover of Rs 8.934 crore today lower than Rs 9,175.26 crore on 4 June 2009.

The Sensex jumped 5456.24 points or 56.55% in calendar year 2009. From a 3-year closing low of 8,160.40 on 9 March 2009, the Sensex is up 6,943.15 points or 85.08%.

The BSE Capital Goods index (up 2.95%), the BSE IT index (up 2.61%), the BSE Auto index (up 2.49%), the BSE TECk index (up 1.58%), the BSE PSU index (up 1.33%), the BSE Consumer Durables index (up 0.78%), the BSE Healthcare index (up 0.77%) outperformed the Sensex.

The BSE FMCG index (down 2.34%), the BSE Realty index (down 2.12%), the BSE Oil & Gas index (down 0.77%), the BSE Metal index (down 0.03%), the BSE Power index (up 0.18%), the BSE Bankex (up 0.49%) underperfomed the Sensex.

The market breadth, indicating the overall health of the market, was strong. On BSE, 1,514 shares rose as compared with 1,315 that declined. A total of 54 shares remained unchanged.

Among the 30-member Sensex pack, 20 rose while the rest declined.

The BSE Mid-Cap index was down 0.67% and the BSE Small-Cap index was down 1.02%. Both the indices underperformed the Sensex.

India's largest private sector firm by market capitalisation and oil refiner Reliance Industries (RIL) fell 1.94% to Rs 2,211.85 after its German unit Trevira, a specialty polyester manufacturer, went bankrupt. Reliance Industries had acquired Trevira five years ago for Rs 440 crore. This acquisition in 2004 had propelled Reliance to the position of the world's largest polyester fibre and yarn producer. The announcement was made after market hours on 3 June 2009.

Banking stocks pare gains on profit taking after they rose recently on hopes the UPA government will pursue financial sector reforms. India's largest private sector bank by net profit ICICI Bank rose 2.3% to Rs 751.15. The stock hit a high of Rs 763.80 and a low of Rs 738. Its American depository receipt (ADR) rose 7.19% on Thursday, 4 June 2009.

ICICI Bank on 4 June 2009 said it will cut lending rates by 50 basis points from Friday, 5 June 2009. The benchmark advance rate, or the rate that it charges its top customers, will drop to 15.75% from 16.25%. It also cut floating reference rate (FRR) applicable to floating rate retail loans (including floating rate home loans) by 50 basis points. The revised FRR will be 12.75% from 13.25%. All the existing floating rate customers to benefit from the cut.

India's second largest private sector bank by operating income HDFC Bank rose 2.15% to Rs 1,418.70. Its ADR rose 3.06% overnight. The stock hit a high of Rs 1,431 and a low of Rs 1,386.50.

But, India's biggest bank in terms of branch network State Bank of India (SBI) fell 3.09% to Rs 1,817.90. The stock hit a high of Rs 1,920.90 and a low of Rs 1,810. Reports suggest SBI Chairman O P Bhatt said there is room to cut lending rates by 25 basis points.

India's biggest dedicated housing finance firm by operating income HDFC fell 0.63%.

Outsourcing focussed IT stocks rose 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 firm by sales Infosys Technologies rose 3.91% on recent reports the firm is looking at three to four companies with annual revenue of $100 million to $200 million in the U.S. and Europe for a potential acquisition. Its ADR gained 0.94% overnight.

India's third largest software services exporter by sales Wipro rose 0.49% as its ADR rose 1.48% overnight.

But, India's largest software services exporter by sales TCS rose 1.93%.

Cement stocks rose on posting healthy growth in shipments in the month of May 2009. India Cements, Grasim Industries, ACC, Ambuja Cements rose by between 0.68% to 6.06%.

Some capital goods stocks rose on hopes the UPA government's aim to revive economic growth would spur orders. Larsen & Toubro, Bharat Heavy Electricals, Crompton Greaves, Siemens, Thermax, Praj Industries rose by between 0.78% to 5.3%.

Auto stocks rose on posting good monthly sales figures in the month of May 2009. Tata Motors, Mahindra & Mahindra, Bajaj Auto, Maruti Suzuki India and Hero Honda Motors rose by between 0.73% to 5.64%.

Healthcare stocks rose on hopes newly elected UPA government will give primary importance to healthcare segment and health of citizens. Ranbaxy Laboratories, Dr Reddy's Laboratories, Biocon, Wochardt, Pfizer rose by between 0.41% to 6.22%.

Telecom stocks rose on hopes government may speed up the auction process for the spectrum allocation of third generation WiMax services and stress on rural telephony. Idea Cellular and Bharti Airtel rose by between 1.56% to 1.59%. Reliance Communications fell 0.98%.

Metal stocks as Copper rose in London, heading for a third straight weekly gain, on speculation that the pace of job cuts slowed in the U.S., adding to indications that the worst of the economic slump may be past. Steel Authority of India, National Aluminum Company, Hindalco Industries and Sterlite Industries rose by between 0.77% to 3.39%.

Hindustan Zinc rose 0.05% on raising zinc and lead prices.

Sugar stocks rose on hopes of a firm sugar prices on fall in output. Dhampur Sugar, Shree Renuka Sugars and Bajaj Hindustan rose by between 2.74% to 8.92%.

Shares of multiplex cinema operators rose on reports talks between Bollywood producers and multiplex owners came to an end as the two parties reached a revenue sharing deal. Cinemax India, Adlabs Films, PVR, Inox Leisure, Pyramid Saimira, and Fame India rose by between 0.95% to 5%.

Cals Refineries clocked the highest volume of 8.61 crore shares on BSE. Jaiprakash Associates (3.2 crore shares), Unitech (3.05 crore shares), Satyam computer Services (2.65 crore shares) and Ispat Industries (2.26 crore shares) were the other volume toppers in that order.

Jaiprkash Hydro Power clocked the highest turnover of Rs 308.19 crore on BSE. Unitech (Rs 298.34 crore), Suzlon Energy (Rs 292.50 crore), Reliance Capital (Rs 274.32 crore) and Reliance Industries (Rs 217.99 crore) were the other turnover toppers in that order.