Sensex settles above 15,000 level; at nine-month high

Key benchmark indices settled at multi-month highs as buying frenzy in late trade helped indices reverse early losses caused due to weak global cues. The benchmark index BSE Sensex finished above the psychological 15,000 mark as investors mopped equities after the newly elected UPA government in its agenda disclosed about reviving economic growth. The BSE 30-share Sensex gained 137.78 points, or 0.93%, to 15,008.68 after sliding to day's low of 14,601.91 and surging to high of 15,026.03 in a highly volatile trade.

President Pratibha Patil addressed to a joint session of both houses a little while ago today, 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.

The Sensex jumped 5361.37 points or 55.57% in calendar year 2009. From a 3-year closing low of 8,160.40 on 9 March 2009, the Sensex is up 6848.28 points or 83.92%. The 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 totaled Rs 22,146.60 crore till 2 June 2009.

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.

European markets were trading firm today, 4 June 2009 ahead of interest rate decisions. Key benchmark indices in UK, Germany and France were up by between 0.21% and 0.76%.

Investors are awaiting the interest rate decisions from the Bank of England (BOE) and the European Central Bank (ECB) later in the day. The ECB is set to keep interest rates on hold with markets keen to see the details of its covered bond purchase plan as well as clues on whether rates may yet be cut further. The BOE is expected to keep interest rates at a record low 0.5% and refrain from expanding its quantitative easing plan.

Eurozone GDP fell 2.5% quarter-on-quarter in the first quarter of 2009, data confirmed on Wednesday, 3 June 2009. The annual drop was revised down to 4.8%, from an earlier reading of 4.6%.

Asian markets declined today, 4 June 2009, with investors indulging in profit taking after recent sharp gains. Weak economic data from the U.S. also hurt sentiment. Key benchmark indices in Japan, China, Singapore, South Korea, Hong Kong and Taiwan were down by between 0.40% and 2.60%.

Among economic news, according to the quarterly survey by the Ministry of Finance, Japanese business investment fell by 25.3% from a year earlier during the January-March period 2009, marking the eighth straight quarter of decline. Economists closely watch the capital investment figure because the government will use it in revising the preliminary first-quarter gross domestic product data, which showed a record 15.2% contraction at an annualized pace. Corporate investment in factories and equipment account for around 15% of Japan's GDP.

Trading in US index futures showed the Dow could rise 51 points at the opening bell on Thursday, 4 June 2009.

US markets slipped on Wednesday, 3 June 2009, the major U.S. averages snapped their four-day winning streak overnight, as traders chose to take profits on the back of some discouraging economic data. The U.S services sector contracted for the eighth straight month in May and employment data from the world's biggest economy has also turned out to be a bit disappointing.

The Dow Jones industrial average slipped 65.63 points, or 0.75%, at 8,675.24. The Standard & Poor's 500 Index fell 12.98 points, or 1.37%, at 931.76 and the Nasdaq Composite index declined 10.88 points, or 0.59%, at 1,825.92.

Reports on the job market, factory orders and the services sector of the US economy were in focus, along with congressional testimony from Federal Reserve Chairman Ben Bernanke.

Comments by the U.S. Fed Chairman Ben Bernanke that US budget deficits threaten financial stability and the government could not continue indefinitely to borrow at the current rate to finance the shortfall also affected investor sentiment.

Private-sector employers cut 532,000 jobs in May 2009 after paring 545,000 in April 2009, according to payroll-services firm ADP. Expectations were for 525,000 cuts. The Institute for Supply Management's (ISM) services index improved to 44 in May 2009 from 43.7 in April 2009, but just missed expectations. It was still below 50, indicating contraction. Also factory orders rose 0.7% in April 2009, an improvement over the downwardly revised 1.9% drop in March 2009 but shy of expectations

Closer home, the market may see 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.

The BSE 30-share Sensex rose 137.78 points, or 0.93%, to 15,008.68, its highest closing since 2 September 2009. The Sensex opened 115.82 points lower at 14,755.08. At the day's low of 14,601.91, the Sensex lost 268.99 points in early afternoon trade. The Sensex gained 155.13 points at the day's high of 15,026.03 in midafternoon trade

The S&P CNX Nifty shot up 41.95 points, or 0.93%, to 4,572.65 its highesr closing since 11 August 2009. Nifty June 2009 futures were at 4583.75, at a premium of 11.1 points over the spot closing. Turnover in NSE's futures & options (F&O) segment rose to Rs 66932.8 crore from Rs 65165.46 crore on Wednesday, 3 June 2009.

The market breadth, indicating the overall health of the market, was strong. On BSE, 2111 shares rose as compared with 716 that declined. A total of 55 shares remained unchanged.

The BSE Mid-Cap index rose 2.26% to 5,446.08 and the BSE Small-Cap index advanced 2.20% to 6,525.19. Both these indices outperformed the Sensex

BSE clocked a turnover of Rs 9118 crore as compared with Rs 9,461.31 crore on Wednesday, 3 June 2009

Most sectoral indices on BSE displayed logged gains. The BSE FMCG index (up 1.09%), the BSE Power index (up 2.30%), the BSE Capital Goods index (up 3.23%), the BSE Healthcare index (up 2.60%), the BSE PSU index (up 1.88%), the BSE Realty index (up 3.29%), the BSE Bankex (up 1.32%) outperformed the Sensex

The BSE TECk index (up 0.82%), the BSE Metal index (down 2.11%), BSE Consumer Durables index (down 0.55%), the BSE Auto index (up 0.46%), The BSE IT index (down 0.52%), the BSE Oil & Gas index (up 0.31%), underperfomed the Sensex

Among the 30-member Sensex pack, 21 rose while the rest slipped.

Pharma and FMCG companies dominated the list of gainers on defensive buying. India's largest pharma company by sales Ranbaxy Laboratories surged 6.27% to Rs 283.10 and was the top gainer from the Sensex pack

Sun Pharma (up 2.91%), Divi's Labs (up 7.78%), Dr Reddy's Labs (up 4.78%), rose from the pharma pack.

India's largest FMCG company by sales Hindustan Unilever gained 3.65% to Rs 248.50 and India's largest cigarette company by sales ITC rose 0.57% to Rs 204.15

FMCG shares were also boosted by reports that key product segments such as soaps, detergents, toothpastes, biscuits, snack foods and soft drinks saw volume growth of more than 20% in April-May 2009 due to stable prices and promotional activities

India's largest private sector firm by market capitalisation and oil refiner Reliance Industries (RIL) rose 0.23% to Rs 2250. The stock slipped to a day's low of Rs 2160 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 yesterday, 3 June 2009.

India's largest private sector bank by net profit ICICI Bank vaulted 2.82% to Rs 740 despite a 6% slump in its ADR on Wednesday, 3 June 2009. The stock recovered from day's low of Rs 651.25.

ICICI Bank today, 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.

Infrastructure shares advanced after President Pratibha Patil disclosed today, 4 June 2009 the UPA coalition government would aim to revive economic growth with higher investments in infrastructure sector. L&T (up 3.59%), GVK Power Infrastructure (up 1.47%), Punj Lloyd (up 6.03%), Lanco Infratech (up 9.16%), GMR Infrastructure (up 2.40%), Reliance Infrastructure (up 3.11%), Bhel (up 1.79%), and Jaiprakash Associates (up 2.70%), gained.

Maruti Suzuki India (up 2.71%), DLF (up 3.26%) and ACC (up 2.58%), gained

Realty stocks gained 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 3.26%), Unitech (up 2.32%), Shobha Developers (up 9.99%), Parsvnath Developers (up 4.95%), Indiabulls Real Estate (up 2.97%), Housing Development & Infrastructure (up 4.73%), advanced.

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 second largest listed cellular services provider by sales Reliance Communications (RCom) spurted 2.22% to Rs 340.30 on the company's plans to raise funds through the qualified institutional placement route. The announcement was made after market hours on Friday, 30 May 2009.

RCom will seek shareholders' approval to garner funds from qualified institutional investors, either through a share sale or an issue of a variety of instruments including fully convertible, partly convertible or non-convertible debentures with warrants or any other security. Although the company did not say how much it planned to raise reports suggested it may be around $500 million and will be used to strengthen financial position for a planned participation in the upcoming auction for nationwide 3G and Wi-Max spectrum allocation by the Indian government.

However metal shares were weak on profit booking after the sharp recent surge and on fears of waning global demand post poor economic data from the US. India's largest aluminium and copper marker by sales Sterlite Industries lost 6.24% to Rs 659 and was the top loser from the Sensex pack

Tata Steel (down 3.46%), Hindalco Industries (down 3.17%), Sail (down 2%), Sesa Goa (down 2.10%) and Hindustan Zinc (down 2.65%), edged lower

National Aluminum Company fell 4.15% to Rs 342 after its net profit fell 80% to Rs 83 crore in Q4 March 2009 over Q4 March 2008 on lower aluminum prices. The company announced the result after market hours on Wednesday, 3 June 2009.

India's top truck marker by sales Tata Motors rose 1.80% to Rs 368.50, extending yesterday's 3.68% rise after global credit rating agency Moody's on Tuesday, 2 June 2009 revised upwards outlook for its low investment grade rating on from negative to stable after the company successfully refinanced a bridge loan for Jaguar and Land Rover acquisition. Despite the sharp rise, the stock is off day's high of Rs 378.70

However, India's top tractor maker by sales Mahindra & Mahindra (M&M) lost 1.22% to Rs 689 on profit booking after surging sharply recently

Oil exploration firms slipped after US light crude oil for July delivery fell $2.43 to $66.12 a barrel on the New York Mercantile Exchange on Wednesday, 3 June 2009. Fall in oil prices affects realization from crude sales of oil exploration firms.

India's largest oil exploration firm by sales ONGC slipped 0.34% to Rs 1165 and India's second largest oil exploration firm by sales Cairn India lost 2.78% to Rs 249.90

India's second largest software firm by sales Infosys Technologies slipped 1.27% to Rs 1625 despite 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.

Airline stocks fell after reports indicated the government is in no hurry to remove the bar on foreign airlines buying stakes in Indian carriers. Jet Airways (down 2.27%), SpiceJet (down 0.95%), slipped. However Kingfisher Airlines rose 1.41%. Reports quoting Aviation Minister Praful Patel said there was no bailout package on cards for the airline industry, which is saddled with losses.

Fertiliser shares gained on hopes of sops from the government in the Union Budget and speculative build-up of positions ahead of the monsoon season. Chambal Fertilisers (up 4.34%), Tata Chemicals (up 5.12%), RCF (up 2.94%), and Nagarjuna Fertilisers (up 3.03%), rose.

PSU shares gained on hopes of positive announcement on disinvestment front in President Pratibha Patil's address to a joint session of both houses today, 4 June 2009 as she formally discloses the agenda of the UPA coalition government.

Engineers India (up 13.97%), Dredging Corporation (up 5.39%), HMT (up 5%), Beml (up 6.75%), and Balmer Lawrie (up 3.86%), surged.

MMTC climbed 10% to Rs 31,098.25 on hopes the government may divest substantial stake in the company. The government holds 99.33% stake in MMTC as on March 2009.

Suzlon Energy was the top traded counter on BSE with turnover of Rs 435.68 crore, followed by Reliance Capital (Rs 342.21 crore), Reliance Natural Resources (Rs 304.82 crore), Reliance Industries (Rs 255.52 crore), and Unitech (Rs 239.93 crore).

Satyam Computer topped the volume chart on BSE clocking volume of 3.85 crore followed by Reliance Natural Resources (3.31 crore shares), Suzlon Energy (3.29 crore shares), Ispat Industries (2.86 crore shares) and Unitech (2.49 crore shares).

Suzlon Energy spurted 7.55% to Rs 136 on reports the company is close to raising Rs 600 crore from private equity investors to finance the purchase of Portuguese energy firm Martifier's stake in its subsidiary REpower. Suzlon owns about 83% in REpower.

Indage Vintners was locked at upper limit of 5% at Rs 110.05 on reports Japanese beer maker Asahi Breweries and an Indian entrepreneur are in the race to buy a major stake in the company.

Kinetic Engineering was locked at upper limit of 5% at Rs 55.65 after winning an order for supplying specialised transmission gear assemblies to an unspecified European automobile manufacturer.

Asian Electronics hit 5% upper circuit at Rs 47.45 after company said its board of directors will meet on 10 June 2009 to consider raising funds through various routes. The company announced the fund raising plans after market hours on Wednesday, 3 June 2009.

Anu's Laboratories rose 2.78% to Rs 37 after its board recommended 1:1 bonus issue. The company announced the bonus issue before market hours today, 4 June 2009.

Torrent Power spurted 10.23% to Rs 157.35 on reports the company has submitted a proposal to Gujarat Electricity Regulatory Commission (GERC) for hiking tariff by 15%.