Sensex jumps 4.3% on good Q1 results, signs of pick up in economy

Key benchmark indices surged extending strong gains in the preceding week as encouraging Q1 June 2009 results, sings of pick up in the economy, revival of monsoon and firm global markets lifted sentiment. The market hit highest level in more than a month. The market rose in three out of five trading sessions in the week.

The BSE Sensex rose 634.04 points or 4.3% to 15,378.96 in the week ended Friday, 24 July 2009. The S&P CNX Nifty gained 193.60 points or 4.42% to 4,568.55.

The BSE Mid-Cap index jumped 276.22 points or 5.41% to 5,381.81 in the week. The BSE Small-Cap index rose 369.30 points or 6.5% to 6,050.20.

The Q1 June 2009 results announced so far were encouraging, with lower costs helping bottom-line growth. The combined net profit of 473 companies rose 17.40% to Rs 30972 crore on 5.4% growth in sales to Rs 206373 crore in Q1 June 2009 over Q1 June 2008.

India's annual monsoon rains, running between June to September, are seeing a revival after a sluggish start. India's monsoon rains were 15% above normal in the week to 22 July 2009, the second consecutive week of above-average rainfall after an exceptionally dry patch at the start of the season. Total cumulative monsoon, which runs from June to September, was 19% below average, improving from a 27% deficit in the previous week, the India Meteorological Department said on Thursday, 23 July 2009. More than two-thirds of the people live in villages and 60% of the farm land depends on the annual rains.

Meanwhile, the latest economic data indicated improving economic activity. The six infrastructure industries -- crude oil, refining, coal, electricity, cement and steel -- together grew at an annual rate of 6.5% in June 2009, faster than the previous month's rise of 2.8%, data showed on Thursday, 23 July 2009. The infrastructure sector accounts for 26.7% of India's industrial output.

Inflation measured by the wholesale price index (WPI) declined 1.17% in the 12 months to 11 July 2009, as compared with previous week's annual decline of 1.21%, government data showed on Thursday, 23 July 2009.

Global stocks jumped to multi month highs on signs of revival in global economy. US stocks surged sending the Dow Industrials above the key 9,000 mark for the first time in seven months as strong corporate profits and rebounding US home sales spurred optimism about the economy.

Buying by foreign funds has helped Indian market clock strong gains. The Sensex is up 5,731.65 points or 59.41% in calendar year 2009 as on 24 July 2009. From a 3-year closing low of 8,160.40 on 9 March 2009, the Sensex has risen 7,218.56 points or 88.45% as on 24 July 2009.

Purchases of Indian stocks by foreign institutional investors (FII) totaled Rs 7,279.50 crore in July 2009 (till 23 July 2009). FIIs had bought stocks worth a net Rs 3,224.90 crore in June 2009. FII inflow in calendar year 2009 totaled Rs 31,823.70 crore (till 23 July 2009).

Trading for the week began on a buoyant note. The BSE 30-share 446.09 points or 3.03% to 15,191.01 on Monday, 20 July 2009. But the key benchmark indices fell in volatile trade on Tuesday, 21 July 2009 as profit booking emerged after a recent solid surge. The BSE 30-share Sensex fell 128.52 points or 0.85% at 15,062.49

The key benchmark indices dropped for the second straight day on Wednesday, 22 July 2009, reversing intraday 2% gains, as investors booked profits after recent sharp rally. The BSE 30-share Sensex slipped 219.37 points or 1.46% at 14,843.12.

Key benchmark indices rallied on Thursday, 23 July 2009, snapping losses in the preceding two trading sessions, on stellar Q1 June 2009 earnings from some Sensex stocks and positive economic data during trading hours. The BSE 30-share Sensex jumped 387.92 points or 2.61% to 15,231.04 on that day.

The market extended gains for Friday, 24 July 2009 on firm global stocks. The BSE 30-share Sensex rose 147.92 points or 0.97% to 15,378.96 on . Auto, realty and metal shares logged smart gains. However banking shares faltered ahead of quarterly monetary policy review meet on 27 July 2009.

India's largest private sector firm by market capitalisation and oil refiner Reliance Industries (RIL) rose 4.16% to Rs 2,013.75 in the week ahead of its Q1 June 2009 results. After trading hours on Friday, 24 July 2009, RIL reported 11.53% fall in net profit to Rs Rs 3636 crore on 21.64% decline in total income to Rs 32757 crore in Q1 June 2009 over Q1 June 2008

The Supreme Court on 20 July 2009, asked the energy giant and former group firm Reliance Natural Resources (RNRL) why a gas pact between the two should not be cancelled. The court has scheduled next hearing on the dispute over the gas supply to Reliance Natural Resources (RNRL) on 1 September 2009.

RNRL has asked the Supreme Court to dismiss the government's affidavit on the dispute, even as the petroleum ministry has suggested that the court treats the pact between the two brothers null and void. The dispute concerns supply of natural gas from RIL's field, off the Andhra Pradesh coast, as also the price at which Reliance Natural Gas will get the fuel for power projects within the group.

In reply to the lawsuit filed by Reliance Industries challenging the Bombay High Court order, RNRL has said the government has no role to play in the private gas sharing dispute, and certainly not as a party to the row. The government, however, has said that the country's interest must be taken into consideration first and that cannot be held to ransom by a dispute between two industrialists or a previous, private pact between them.

India's largest steel maker by sales Tata Steel jumped 12.01%. The company raised $500 million by issue of global depository receipts (GDR) priced each GDR at $7.644. Each GDR issue represents one underlying equity share. The issue will result in equity dilution of nearly 9%. The company will use the funds for expansion projects.

India's largest dedicated housing finance company by sales, HDFC fell 4.13%. The lender's net profit rose 20.68% to Rs 564.92 crore on 22.86% rise total income to Rs 2,849.07 crore in Q1 June 2009 over Q1 June 2008. The company announced its result during late trade on Wednesday, 22 July 2009.

HDFC has reportedly cut lending rates for new customers by 25-50 basis points. The financial institution has restructured its loan baskets to create a new product where loans up to Rs 15 lakh are available at 8.75% as against 9.25% earlier.

India's largest electric equipment maker by sales Bharat Heavy Electricals (BHEL) fell 1.11%. The company's net profit rose 22.41% to Rs 470.59 crore on 27.64% rise in total income to Rs 5,898.51 crore in Q1 June 2009 over Q1 June 2008. Bhel outstanding order book stood at Rs 1,24,000 crore. The company announced the result during market hours on Wednesday.

India's third largest IT exporter by sales Wipro rose 6.99%. Wipro's consolidated net profit as per Indian accounting rules rose 0.54% to Rs 1015.50 crore on 2.5% fall in sales to Rs 6289.10 crore in Q1 June 2009 over Q4 March 2009. The company announced the results before trading hours on Wednesday.

Wipro expects 0.91% to 1.9% growth in consolidated revenue from IT Services at between $1035 million to $1053 million in Q2 September 2009 over Q1 June 2009. The guidance is based on constant currency exchange rates.

India's largest IT firm by sales Infosys fell 1.23%. The government has launched a Government-to-Business (G2B) services e-biz project with Infosys as the technology partner. The project is among the 27 Central, State and Integrated Mission Mode Projects (MMPs) under the National E-Governance Plan (NEGP).

India's largest IT exporter by sales TCS jumped 11.13%. The company's net profit rose 15.27% to Rs 1276.44 crore on 0.12% fall in sales to Rs 5609.60 crore in Q1 June 2009 over Q4 March 2009. The company announced result after trading hours on 17 July 2009.

Tata Power 2.17% in the week. The company during trading hours on Wednesday 22 July 2009, said strong response for its GDR issue helped it raise $335 million as compared with an earlier announced plan to raise $250 million. The company will use the funds for its ongoing capital expenditure plans. Tata Power issued 14.8-million GDRs priced at $22.58 a piece, with each GDR representing one equity share.

India's top small car maker by sales Maruti Suzuki India shot up 16.28%. The company's net profit rose 25.26% to Rs 583.54 crore on a 31.01% increase in total income to Rs 6709.53 crore in Q1 June 2009 over Q1 June 2008. The stock hit a record high of Rs 1397.50 in intra-day on Friday, 24 July 2009. The result was announced during trading hours on Thursday, 23 July 2009.

India's largest cement manufacturer by sales ACC vaulted 4.15%. The company's net profit soared 79% to Rs 485.61 crore on a 15.32% increase in total income to Rs 2138.24 crore in Q2 June 2009 over Q2 June 2008. The results were declared during trading hours on Thursday, 23 July 2009.

India's top cigarette maker by sales ITC gained 0.7%. The company's net profit rose 17.38% to Rs 878.80 crore on 5.14% rise in total income rose to Rs 4220.49 crore in Q1 June 2009 over Q1 June 2008. The results were unveiled during trading hours on Thursday, 23 July 2009.

India's second largest listed cellular services provider by sales Reliance Communications (RCom) gained 1.15%. The company has bagged a Rs 10,000-crore telecom infrastructure outsourcing deal from new entrant Etisalat DB Telecom (formerly Swan Telecom). The deal, which includes both towers and transmission, is spread over a 10-year period. The company made this announcement during market hours on Wednesday, 22 July 2009.