Sensex scales in 1-1/2 month high

Strong Q1 June 2009 earnings from State Bank of India (SBI) and Mahindra & Mahindra (M&M) and firm global stocks helped the key benchmark indices snap a three day losing streak. A recovery in Chinese shares after Wednesday's (29 July 2009)'s 5% slide helped soothe investors' nerves. The BSE 30-share Sensex jumped 214.50 points or 1.41%, up close to 320 points from the day's low. The Sensex attained its highest closing since 11 June 2009. IT, realty, banking and FMCG stocks led gains. But index heavyweight Reliance Industries (RIL) slipped. The market breadth was strong.

As per the provisional figures on BSE, foreign funds bought shares worth Rs 366.81 crore and domestic funds sold shares worth Rs 286.67 crore today, 30 July 2009.

Volatility was high as traders rolled over positions from July 2009 contracts to August 2009 contracts in the futures & options segment ahead of the expiry of July 2009 contracts today, 30 July 2009. Rollover of Nifty positions from July 2009 contracts to August 2009 contracts was about 60% at the end of Wednesday's (29 July 2009) trading. Rollover in Mini Nifty futures was about 43%.

The key benchmark indices slipped in early trade tracking losses in Asian stocks. After an initial slide the market moved to positive zone for a brief period before slipping into the red again. It recovered sharply in mid-morning trade tracking recovery in Chinese stocks. The market extended gains in early afternoon trade as the latest data showed inflation remained in the negative territory for a seventh week in a row. The market pared gains after surging to a fresh intraday high in mid-afternoon trade. The market extended gains in late trade on strong Q1 results from SBI and M&M.

The market today snapped last three days' losing streak. From a recent high of 15,378.96 on 24 July 2009, the Sensex had lost 205.50 points or 1.33% to 15,173.46 on Wednesday, 29 July 2009.

The wholesale price index (WPI) fell 1.54% in 12 months to 18 July 2009 compared to previous week's fall of 1.17% the government data showed at 11:50 IST. But the government revised upwards inflation for the week ended 23 May 2009 to 1.34% from 0.48%.

The Q1 June 2009 results announced so far have been encouraging, with lower costs helping bottomline growth. The combined net profit of 1438 companies rose 25.8% to Rs 67307 crore on 5.6% fall in sales to Rs 622730 crore in Q1 June 2009 over Q1 June 2008.

Finance Minister Pranab Mukherjee told the parliament on Wednesday that economic growth was showing certain signs of improvement, and trade minister Anand Sharma said efforts were being made to reduce the trade deficit. The economy grew by 6.7% in 2008/09 (April/March), and Mukherjee said India will able to maintain that level of growth. On Tuesday, 28 July 2009, the Reserve Bank of India (RBI) projected growth in 2009/10 at 6% with an upward bias.

A weak monsoon remains a cause of concern. India's monsoon rains were 18% below normal in the week to 29 July 2009, having been above normal in the preceding two weeks. Total rainfall since the beginning of June was 19% below average, the India Meteorological Department said on Thursday. More than two-thirds of the people live in villages and 60% of the farm land depends on the annual rains.

Meanwhile, foreign direct investments (FDI) in India declined 43% to $2.2 billion in May 2009 over May 2008.

European shares rose on Thursday, as investors digested a raft of earnings, which continue to be mostly positive. Key benchmark indices in France, Germany and UK were up by between 0.53% to 1.2%.

Asian stocks rose, recovering from early losses. China's Shanghai Composite ended 1.69% higher, recovering from an initial fall. The index had declined 5% on Wednesday amid concern the government will curb inflows into a market that had more than doubled from last year's low.

Meanwhile, a statement on the People's Bank of China Web site late Wednesday cited a senior official as saying the central bank will emphasize market-based forces, rather than administrative controls in setting credit growth. The statement suggested the government isn't planning to set loan curbs at this time.

Key benchmark indices in Hong Kong, Singapore, South Korea and rose by between 0.49% to 1.23%.

Japan's Nikkei rose 0.51% in volatile trade as Japanese manufacturers increased production for a fourth month in June 2009, capping the fastest quarterly output expansion in more than half a century and helping the economy rebound from its deepest post-war recession.

Trading in US index futures indicated Dow could rise 66 points at the opening bell today, 30 July 2009.

US stocks fell on Wednesday, 29 July 2009 as investors worried that China might be ready to hit the brakes on lending, a move that could curb demand and hinder the global economic recovery.

The Dow Jones Industrial Average was down 26 points, or 0.3%, to 9,070.72. The S&P 500 index fell 4.47 points, or 0.5%, to 975.15, while the Nasdaq Composite Index was down 7.75 points, or 0.4%, to 1,967.76.

In economic news, orders for durable goods fell 2.5% in June 2009, much more than expected. Meanwhile mortgage applications fell for the first time in four weeks.

The BSE 30-share Sensex rose 214.50 points or 1.41% to 15,387.96, its highest closing since 11 June 2009. The Sensex rose 236.45 points at the day's high of 15,409.91 in late trade. The Sensex lost 107.98 points at the day's low of 15,065.48 in early trade.

The S&P CNX Nifty was up 57.95 points or 1.28% to 4,571.45. Nifty August 2009 futures were at 4578, at a premium of 6.55 points as compared to the spot closing of 4571.45. Turnover in NSE's futures & options (F&O) was Rs 94,477.38 crore, much lower than Rs 1,16,508.34 crore on Wednesday, 29 July 2009. BSE clocked a turnover of Rs 6,027 crore, lower than Rs 7,534.13 crore on Wednesday, 29 July 2009.

The Sensex is up 5,740.65 points or 59.5% in calendar year 2009 as on 30 July 2009. From a 3-year closing low of 8,160.40 on 9 March 2009, the Sensex has risen 7,227.56 points or 88.56% as on 30 July 2009.

Coming back to today's trade, the market breadth, indicating the overall health of the market, was strong. On BSE, 1,499 shares advanced as compared with 1,167 that declined. A total of 85 shares remained unchanged.

Among the 30-member Sensex pack, 23 rose while the rest declined.

The BSE Mid-Cap index was up 0.54% and the BSE Small-Cap index was up 0.8%. Both the indices underperformed Sensex.

The BSE IT index (up 2.8%), the BSE FMCG index (up 2.7%), the BSE Bankex (up 2.2%), the BSE TECk index (up 1.57%), outperformed the Sensex.

The BSE Oil & Gas index (down 0.19%), the BSE Power index (down 0.03%), the BSE Metal index (down 0.02%), the BSE Healthcare index (up 0.09%), the BSE Consumer Durables index (up 0.13%), the BSE Capital Goods index (up 0.2%), the BSE Auto index (up 0.86%), the BSE PSU index (up 0.89%), the BSE Realty index (up 1.3%), underperformed the Sensex.

India's largest private sector firm by market capitalisation and oil refiner Reliance Industries (RIL) fell 1.37% to Rs 1,899.90 after Anil Ambani said he will approach the Supreme Court on Thursday, 30 July 2009, seeking a final hearing on the two-year-old gas supply dispute on 1 September 2009. According to him the gas supply dispute between RIL and Reliance Natural Resources (RNRL) vitally affects public interest. The matter concerns power projects of national importance representing a capacity of 12,000 megawatt (MW) and an investment of over Rs 50,000 crore and affects the interests of over 10 million shareholders, he said.

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.

Oil exploration pivotals were mixed after crude futures tumbled almost 6% Wednesday as US oil inventories unexpectedly rose, raising fresh concerns of weak demand. India's largest exploration firm by sales ONGC rose 0.12%. Fall in crude oil prices would result in lower realizations from crude sales for oil exploration firms.

Cairn India fell 0.58% as consolidated net profit fell 67.2% to Rs 45.44 crore on 49.2% fall in sales to Rs 204.95 crore in Q2 June 2009 over Q2 June 2008. The company declared the results after trading hours on Wednesday.

PSU OMCs rose on fall in crude oil prices. BPCL and HPCL rose by between 4.3% to 8.01%. Lower oil prices will reduce underrecoveries at the state-run oil firms on domestic sale of petrol, diesel, LPG and kerosene at a controlled price.

Indian Oil Corporation rose 4.08% as its net profit jumped 787.15% to Rs 3682.83 crore in Q1 June 2009 over Q1 June 2008. The company announced the result during market hours today.

Auto stocks rose after posting strong Q1 June 2009 results in the past few days. India's largest truck market by sales Tata Motors rose 0.44%. The company on Tuesday, 28 July 2009 reported 57.54% rise in net profit to Rs 513.76 crore on a 7.17% decline in total income to Rs 6723.99 crore in Q1 June 2009 over Q1 June 2008.

India's largest tractor maker by sales Mahindra & Mahindra rose 1.22% after net profit rose 151.63% to Rs 400.80 crore on 28.04 % rise in total income to Rs 426.61 crore in Q1 June 2009 over Q1 June 2008. The results for the current quarter include the figures of the erstwhile subsidiaries Mahindra Holdings and Finance and Punjab Tractors which were merged with the company. Hence, the figures of the current quarter are not comparable with those of the previous year's quarter. The results hit the market just a while back.

India's top small car maker by sales Maruti Suzuki India was flat at Rs 1,397.70.

India's largest bike maker by sales Hero Honda Motors was flat at Rs 1,639.60. The company posted 83% jump in net profit to Rs 500 crore on 34% rise in total revenue to Rs 3865 crore in Q1 June 2009 over Q1 June 2008. The company announced the Q1 result after market hours on Wednesday, 29 July 2009.

Rate sensitive realty shares reversed early losses as inflation remained in the negative zone. Investors are concerned that the central bank may start reversing its interest-rate cuts in early 2010 as food and energy prices fan inflation. Rising interest rates may dent property demand as most of the commercial and housing deals are driven by finance.

India's largest real estate developer by sales DLF rose 1.02% ahead of its Q1 June 2009 result today. Unitech, Indiabulls Real Estate, Phoenix Mills and Omaxe rose by between 0.95% to 3.31%.

IT stocks rose on weak rupee. Better-than-expected Q1 June 2009 results by IT pivotals Infosys, Wipro and TCS also underpinned sentiment for IT stocks. TCS, Infosys and Wipro rose by between 1.34% to 6.04%.

The rupee recovered against the dollar after hitting a one-week low in early trade. The partially convertible rupee was hovering at 48.33/48.34, firmer than Wednesday's close of 48.42/48.43. A weak rupee boosts revenues of IT firms in rupee terms as the sector derives a lion's share of revenue from exports.

Patni Computer Systems rose 12.55% after the company said it will scout for acquisitions in the range of $50 million-$200 million in Europe and the Asia-Pacific to help lower its dependence on the US market.

Bank stocks rose on strong Q1 results from State Bank of India, India's biggest commercial bank in terms of branch network. State Bank of India (SBI) rose 4.37% as its net profit jumped 42.02% to Rs 2330.37 crore on 29.86% rise in total income to Rs 21041.51 crore in Q1 June 2009 over Q1 June 2008. The results hit the market during trading hours today.

India's second largest private sector bank in terms of operating income HDFC Bank rose 2.95%. India's largest private sector bank in terms of operating income ICICI Bank rose 3.14%.

Some FMCG stocks rose on improvement in India's annual monsoon in July 2009 after a dry spell in June 2009. FMCG firms derive substantial revenue from rural sector. Britannia Industries, ITC, Dabur India, Nestle India, United Spirits, Tata Tea, rose by between 0.65% to 2.79%.

India's largest FMCG company by sales Hindustan Unilever rose 5.15%. The company reported a 2.68% fall in net profit to Rs 543.19 crore on a 5.06% increase in total income to Rs 4536.17 crore in Q1 June 2009 over Q1 June 2008. The results were declared during trade hours on Tuesday, 28 July 2009.

India's largest private sector steel maker by sales Tata Steel rose 2.53% even as net profit fell 47% to Rs 789.83 crore on a 8.16% decline in total income to Rs 5661.89 crore in Q1 June 2009 over Q1 June 2008. The result was announced during trading hours on Wednesday, 29 July 2009.

India's second largest steel maker by sales Steel Authority of India rose 3.26% even as net profit fell 27.74% to Rs 1326.09 crore in Q1 June 2009 over Q1 June 2008. The company announced the result during trading hours today.

India's largest copper market by sales Sterlite Industries rose 0.89%. The company's net profit fell 68.5% to Rs 112.70 crore in Q1 June 2009 over Q1 June 2008. The result was announced during trading hours on 29 July 2009.

Construction stocks rose on government's thrust on infrastructure sector in Union Budget 2009-2010. Era Infra Engineering, Gayatri Projects and IVRCL Infrastructure & Projects rose by between 1.56% to 3.14%.

But capital goods stocks fell on profit taking after a recent surge triggered by government's thrust on the infrastructure sector in Union budget 2009-2010. Bharat Heavy Electricals, Punj Lloyd, ABB, Praj Industries, Siemens fell by between 0.06% to 1.86%.

Cement stocks rose on posting good Q1 June 2009 results. Grasim Industries, ACC, Ambuja Cements and Ultratech Cements rose by between 0.78% to 4.1%.

Some power stocks rose after a strong response to the Adani Power initial public offer which opened for subscription on Tuesday, 28 July 2009. NTPC, Power Grid Corporation Of India, Torrent Power rose by between 1.45% to 2.96%. Reliance Infrastructure rose 1.8% ahead of its Q1 June 2009 result today.

Sun Pharmaceuticals Industries tumbled 3.62% after net profit fell 56.7% to Rs 121.51 crore on a 39.5% decline in sales to Rs 405.88 crore in Q1 June 2009 over Q1 June 2008. The company announced the results during trading hours on Wednesday, 29 July 2009.

Other HealthCare stocks, Cadila HealthCare, Piramal HealthCare, Lupin fell by between 0.02% to 3.7%.

Unitech clocked highest volume of 1.54 crore shares on BSE. Suzlon Energy (1.47 crore shares), Mahindra Satyam (1.14 crore shares), Ispat Industries (1.1 crore shares) and Ruchi Soya Industries (1.08 crore shares) were the other volume toppers in that order.

Tata Steel clocked the highest turnover of Rs 255.38 crore on BSE. Housing Development & Infrastructure (Rs 185.26 crore), DLF (Rs 171.59 crore), Suzlon Energy (Rs 145.94 crore) and State Bank of India (Rs 144.07 crore) were the other turnover toppers in that order