RIL, auto shares edge higher in volatile market

The key benchmark indices closed little changed after moving between positive and negative terrain throughout the day. Index heavyweight Reliance Industries jumped. The BSE 30-share Sensex fell 2.99 points or 0.02%, off close to 240 points from the day's high and up close to 85 points from the day's low.

India's largest engineering and construction firm by sales Larsen & Toubro (L&T) fell as order inflow declined 22% in Q1 June 2009 over Q1 June 2008. India's largest copper maker by sales Sterlite Industries tumbled. Auto stocks rose.

The market was volatile. Equities pared gains after a firm start triggered by overnight solid surge in US stocks. Traders took home profit after the Sensex jumped 6.3% in the two trading sessions to 14,253.24 on Wednesday, 15 July 2009 from 13,400. 32 on 13 July 2009. The market cut losses in mid-morning trade after it had pared a large part of the initial gains. The market hovered between the positive and negative terrain later. The market cut losses after hitting a fresh intraday low in afternoon trade. The market closed flat after hovering between the positive and negative terrain in late trade.

India's weather office has forecast widespread rainfall in most regions in the next five days, calming fears of extensive crop damage in the country where only 40% of the farmland is irrigated. In the next two days heavy rains are expected in the western Gujarat state, a key cotton and oilseeds producer, and many places in Madhya Pradesh where soybean is being planted.

A weak start to the vital June-September monsoon rains stoked fears of crop failure, encouraging the government to ban wheat exports and prepare contingency plans. But the weather office said on Wednesday that rainfall had improved in the past two days and Finance Minister Pranab Mukherjee told parliament yesterday that while the slow progress of monsoons was a concern, the situation was not alarming. A shortfall of 34% of the long-term average during the period from 1 June 2009 to 9 July 2009, has been reduced to 29% during the period 1 June 2009 to 14 July 2009.

Meanwhile, Finance Secretary Ashok Chawla said on Wednesday the government will come up with a roadmap for the sale of its stake in public sector companies by mid-August.

India's wholesale price index (WPI) in 12 months to 4 July 2009 fell 1.21% compared to a previous week's decline of 1.55% the government data showed at 12:00 IST today. The government revised upwards the WPI index to 1.56% for week ended 9 May 2009 to 1.56% from earlier 0.61%.

The stock market has entered a crucial period of earnings. Early this week, HDFC Bank, India's second biggest private sector bank, reported good Q1 results. Last week, IT bellwether Infosys reported better than expected Q1 results.

European shares edged higher in volatile trade on Thursday. Key benchmark indices in Germany, UK and France were up by between 0.09% to 1.02%.

Asian stocks pared gains after a firm start triggered by an improvement in US manufacturing. Key benchmark indices in Hong Kong, Japan, South Korea, Singapore and Taiwan rose were up by between 0.49% to 0.81%.

China's Shanghai Composite fell 0.17%, reversing early gains. China's economy rebounded from its weakest growth in almost a decade as record lending and surging investment countered a slump in exports. Gross domestic product expanded 7.9% in the second quarter from a year earlier after a 6.1% gain in the previous three months, the Statistics Bureau said in Beijing today.

Trading in US index futures indicated Dow could rise 4 points at the opening bell today, 16 July 2009.

US markets closed sharply higher yesterday, 15 July 2009 after Intel's earnings beat estimates and minutes from the Federal Reserve's most recent policy-setting meeting showed officials judged that the US economy's contraction was slowing. Also a slew of economic reports indicated stronger signs of a turnaround. The Dow gained 256.72 points, or 3.1%, to 8,616.21. The S&P 500 index added 26.84 points, or 3%, to 932.68, while Nasdaq Composite Index gained 63.17 points, or 3.5%, to 1,862.90.

In economic news, readings on New York manufacturing, consumer prices, industrial production and mortgage applications each provided hope for the economy. While none was particularly buoyant, each beat analyst expectations.

The BSE 30-share Sensex fell 2.99 points or 0.02% at 14,250.25. At the day's high of 14,493.10, the Sensex rose 239.86 points in early trade. At the day's low of 14,169.58, the Sensex fell 83.66 points in mid-afternoon trade.

The S&P CNX Nifty fell 2.10 points or 0.05% to 4,231.40. Nifty July 2009 futures were at 4230.10, at a discount of 1.30 points as compared to the spot closing of 4231.40. Turnover in NSE's futures & options (F&O) segment surged to Rs 68,847.29 crore from Rs 57,969 crore on Wednesday, 15 July 2009.

BSE clocked a turnover of Rs 6,278 crore, higher than Rs 5,460.73 crore on Wednesday, 15 July 2009.

The market breadth, indicating the overall health of the market, was positive. On BSE, 1,456 shares rose as compared with 1134 that fell. A total of 93 shares remained unchanged.

From the 30 shares Sensex pack, 16 fell and rest rose.

The Sensex is up 4,602.94 points or 47.71% in calendar year 2009, as on 16 July 2009. From a 3-year closing low of 8,160.40 on 9 March 2009, the Sensex has risen 6,089.85 points or 74.62% as on 16 July 2009.

Coming back to today's trade, the BSE Mid-Cap index was up 0.34% and the BSE Small-Cap index was up 0.44%. Both these indices outperformed the Sensex.

The BSE Auto index (up 1.95%), the BSE Oil & Gas index (up 1.88%), the BSE Consumer Durables index (up 1.51%), the BSE Healthcare index (up 0.69%), the BSE TECk index (up 0.67%),the BSE IT index (up 0.25%), the BSE PSU index (up 0.17%), the BSE FMCG index (down 0.01%), outperformed the Sensex.

The BSE Capital Goods index (down 1.65%), the BSE Metal index (down 0.45%), the BSE Power index (down 0.37%), the BSE Bankex (down 0.15%), the BSE Realty index (down 0.05%), underperformed the Sensex.

India's largest private sector firm by market capitalisation Reliance Industries (RIL) rose 3.16% to Rs 1,934.30 on bargain hunting after a recent sharp fall. Recent reports suggest that the government is open to allowing private-sector refiners such as RIL and Essar Oil to access subsidy on domestic fuel sales. The stock came off the day's high of Rs 1,966.60. From a recent high of 2,084.95 on 29 June 2009 the stock had lost 10.11% to Rs 1,875 on 15 July 2009.

The Supreme Court, last week, declined to stay the Bombay High Court's verdict in a dispute over the sale of natural gas by Reliance Industries (RIL) to Reliance Natural Resources (RNRL). The Supreme Court didn't grant RIL' plea to stay the order of the Bombay High Court until the resolution of the case and issued notices to the companies and the Centre. Both companies have to reply to appeals filed by each other by 20 July 2009, when the matter is scheduled to be heard. The government must also respond by then, the court said.

RIL had moved the Supreme court, challenging the Bombay High Court judgment asking it to supply gas to the former at a price that is 44% lower than fixed by the government. In its appeal filed in the Supreme Court on Saturday 4 July 2009, Reliance Industries contended that the high court had erred in deciding the three terms - quantity, tenure and price of gas supply to power plants of Reliance Natural Resources (RNRL) affiliates.

Shares of oil exploration firms reversed early gains as oil fell 0.16% after gaining 3.4% in the previous session. India's largest state-run oil exploration firm by revenue ONGC fell 1.16%. Cairn India fell 1,75%. US oil for August delivery dipped 13 cents to $61.41 a barrel, after gaining 3.4% on Wednesday.

PSU OMCs fell on higher crude oil prices. HPCL, BPCL and Indian Oil Corporation fell by between 0.42% to 0.85%. The rise in crude oil prices will increase under-recoveries for PSU OMCs on domestic sale of petrol, diesel, LPG and kerosene at a controlled price.

Oil minister Murli Deora, last week, said that the government will roll back the Rs 4 a litre hike in petrol prices and the Rs 2 a litre increase in diesel rates if international crude oil prices stabilize between $50 and $60 a barrel. At the beginning of this month, the Government had raised petrol and diesel prices citing spike in international crude oil prices to $70 a barrel.

Contrary to market expectations, the Union Budget 2009-2010 did not include a roadmap for decontrol of fuel prices in the country even as the finance minister said an expert panel will be set up to look into the matter of fuel pricing.

Two-wheeler makers rose boosted by good Q1 June 2009 results from Bajaj Auto during trading hours today. Bajaj Auto surged 5.12% after net profit jumped 67.60% to Rs 293.49 crore in Q1 June 2009 over Q1 June 2008.

Hero Honda Motors and TVS Motor Company rose by between 3.1% to 10.03%.

India's largest commercial vehicle maker by sales Tata Motor rose 2.62% on reports the company will deliver the first batch of Nano, the world's cheapest car, in the last week of July 2009.

India's largest small car maker by sales Maruti Suzuki India rose 3.2% and India's largest tractor maker by sales Mahindra & Mahindra rose 0.33%.

India's largest engineering and construction firm by sales Larsen & Toubro (L&T) fell 3.65% after a top official of the company said order inflow was down 22 % in Q1 June 2009 over Q1 June 2008. The company's order backlog at the end of the June quarter was Rs 71, 650 crore ($14.7 billion).

L&T's net profit rose 218.08% to Rs 1598.20 crore on 6.68% rise in total income to Rs 7362.71 crore in Q1 June 2009 over Q1 June 2008. Exceptional profit of a massive Rs 1019.88 crore on sales of long term investment in Ultratech Cements boosted the Q1 net profit. The company announced the result during market hours today.

Decline in L&T's order intake weighed on other capital goods stocks as well. BEML, ABB, Punj Lloyd, Praj Industries, Siemens fell by between 0.04% to 1.53%.

Some cement stocks fell on profit taking after recent rise after a thrust on infrastructure development in the Union Budget 2009-2010. Birla Corporation of India, Grasim Industries, Ambuja Cements, Ultratech Cements, fell by between 0.38% to 1.25%.

Finance Minister Pranab Mukherjee on 6 July 2009, provided a thrust on various infrastructure projects in the Budget which may help boost cement demand. The government announced more spending for urban, water and road projects. The allocation to National Highway development program allocation was increased 23% to Rs 15948 crore.

Construction stocks fell on profit taking after recent gains. Era Infra Engineering, Hindustan Construction Company, IVRCL Infrstructure &Projects and Nagarjuna Construction Company fell by between 1.2% to 2.95%.

India's largest copper maker by sales Sterlite Industries fell 6.12% on equity dilution concerns after the company said it is raising $1.5 billion in an issue of American Depositary Receipts, with parent Vedanta to buy $500 million of the issue. The deal, arranged by JPMorgan and Morgan Stanley, was launched in the United States on Wednesday, 15 July 2009. The stock was the major loser from the Sensex pack.

The world's sixth-largest steel producer, Tata Steel rose 1.29% after company said its unit had raised its holding in Australia's Riversdale Mining to 19.38%.

Telecom stocks rose even after junior telecoms minister Gurudas Kamat today said the government has ordered a special audit of the country's five leading private-sector mobile telecoms firms to check whether there had been any misreporting of revenue. Bharti Airtel and Reliance Communications rose by between 0.67% to 3.09%.

Mahindra Holiday's and resorts settled at Rs 317.10, a premium of 5.7% over the initial public offer price of Rs 300 on its debut today. The stock debuted at Rs 315. It hit a high of Rs 339.70 and low of Rs 311.10. On BSE, 84.96 lakh shares changed hands in the counter.

IT stocks rose on hopes of a revival in US economy. US is the largest market for IT firms. India's third largest IT exporter by sales Wipro rose 0.87% as its American depository receipt (ADR) rose 8.34% on Wednesday.

India's largest IT firm by sales Infosys rose 0.23% after the company raised the lower end of its annual forecast in dollar terms at the time of announcing Q1 June 2009 results before trading hours on Friday, 10 July 2009. Its ADR rose 3.52% overnight. But, India's largest IT exporter by sales TCS fell 0.49%

Some FMCG stocks rose on hopes of revival in India's annual monsoon. FMCG firms derive substantial revenue from the rural sector. Britannia Industries, Tata Tea, Nestle India, Dabur India and United Spirits rose by between 0.5% to 5.47%.

Some drug makers rose after the Finance Minister Pranab Mukherjee reduced customs duty on life saving drugs in the Budget. Ranbaxy Laboratories, Pfizer, Cipla, Lupin, Biocon, Sun Pharmaceutical Industries rose by between 0.1% to 3.61%.

Finance minister on 6 July 2009, reduced basic customs duty on influenza vaccine and nine other specified life-saving drugs used for treating breast cancer, hepatitis-B, rheumatic arthritis, etc.

The government has also reduced basic customs duty for two bulk drugs used in manufacturing these medicines from 10% to 5%. Bulk drugs are processed raw materials used in manufacturing the final doses of medicines.

Power stocks fell on profit taking after disappointment from the Budget. There was lack of any major sops in the Budget for the power sector. Reliance Power, Reliance Infrastructure, Tata Power Company, fell by between 0.09% to 3.97%.

Fertiliser shares rose on hopes of revival in India's annual monsoon. Rashtriya Chemicals and Fertilizers, Nagarjuna Fertilizers & Chemicals, Zuari Industries, Chambal Fertilizers & Chemicals, National fertilizers, Gujarat State Fertilizers Company, Deepak Fertilisers and Petrochemicals Corporation, Tata Chemicals rose by between 0.15% to 2.38%.

Shipping stocks fell even as the Baltic Dry Index, which measures the cost of shipping commodities, climbed 7.3% in London yesterday, taking gains in the past two days to 12%. Essar Shipping, GE Shipping Company and Mercator Lines fell by between 0.2% to 4.31%.

Mahindra Satyam clocked the highest volume of 3.52 crore shares on BSE. Suzlon Energy (1.61 crore shares), Reliance Natural Resources (1.6 crore shares), Ispat Industries (1.48 crore shares) and IFCI (1.46 crore shares) were the other volume toppers in that order.

Reliance Industries clocked the highest turnover of Rs 328.33 crore on BSE. Mahindra Satyam (Rs 288.99 crore), Mahindra Holiday's & Resorts (Rs 269.42 crore), Aban Offshore (Rs 261.80 crore) and Larsen & Toubro (Rs 224.22 crore) were the other turnover toppers in that order.