Market extends gains for the sixth day

Volatility ruled the roost as the key benchmark indices notched up small gains. The market rose for the sixth straight day in a row. But, India's largest steel maker by sales Tata Steel tumbled after reporting heavy losses in Q1 June 2009 on consolidated basis. The BSE 30-share Sensex was up 11.22 points or 0.07%, off close to 70 points from the day's high and up close to 95 points from the day's low. The market breadth, indicating the overall health of the market, was strong

As per provisional data, foreign funds today, 27 August 2009, sold shares worth a net Rs 41.47 crore. Domestic funds bought shares worth a net Rs 29.22 crore

Capital goods stocks
rose. IT stocks gained after the top three IT firms won a large order from British Petroleum. Realty stocks fell.

The market recovered after an early slide triggered by weak global stocks. The Sensex moved into positive zone in morning trade. It slipped into the red red again later. The market once again moved into the green from red in early afternoon trade. The market extended gains in afternoon trade. The market pared gains in mid-afternoon trade.

Volatility was high in late trade with the Sensex alternatively moving between positive and negative zone as traders rolled over positions in the derivatives segment from August 2009 series to September 2009 series, ahead of the expiry the August 2009 contracts. The August 2009 contracts expired today. The rollover in Nifty futures was about 65% at the end of Wednesday's (26 August 2009) trade. Rollover in Mini Nifty futures was about 51%.

Finance Minister Pranab Mukherjee today said the economy is showing some positive signals. The Finance Minister expects over 6% growth in the year ending March 2010 even as he expressed concerns over growth in the infrastructure sector. Mukherjee said weak rains have hit the summer crop. India's economy could possibly grow at more than 8% in the year ending March 2011, he added. He further said India's heavy borrowing in the 2009/10 fiscal year will not crowd out private investments.

As per reports, India's monsoon rain in the week till 26 August 2009 was 6.6% below long term average. The monsoon deficit narrowed to 25% during the period from 1 June 2009 to 26 August 2009, from 26% a week ago. More than two-thirds of the people live in villages and 60% of the farm land depends on the annual rains.

The government's immediate objective is to reverse declining exports and the trade policy will give thrust to employment oriented sectors, Commerce Minister Anand Sharma said today at the time of unveiling a trade policy for the five years ending March 2014. The minister said he expects exports to grow 15% in fiscal year ending March 2011. The government will continue a tax refund scheme for exporters until December 2010 while a duty-free export promotion scheme will be valid until March 2011, Sharma said on Thursday.

India is expected to return to a high export-growth path of an annual 25% by 2014, Sharma said on Thursday. He said government will take further steps to reduce transaction cost for exporters. He said government to allow tax refund schemes for jewellery sector and there are plans to set up diamond bourses. He said state run banks will provide dollar credit to exporters.

Sharma said India's industrial output rose 7% in July 2009, compared to a 7.8% rise in June 2009. Government data had on Wednesday shown a sharp slowdown in infrastructure sector output. Infrastructure sector out grew 1.8% in July 2009 over July 2008, lower than an upwardly revised 6.8 % in June 2009. The infrastructure sector accounts for 26.7% of India's industrial output.

The widely watched wholesale price index fell 0.95% in the 12 months to 15 August 2009, its 11th successive fall. The decline was, however, lower than a 1.53% decline a week before that. The food articles index surged 13.3% from a year earlier as drought has hit nearly half of India's districts, eroding crop production and raising major headaches for policy makers. The government announced the inflation data after market hours on Wednesday.

European shares fell reversing early gains. Key benchmark indices in France, Germany and UK were down by between 0.02% to 0.48%.

Asian stocks declined today led by commodity companies, after China's government said it may curb overcapacity in the steel and cement industries as well as strengthen controls of stock and bond sales by companies in targeted sectors. Key benchmark indices in China, Hong Kong, Japan, Taiwan, South Korea, were down by between 0.42% to 1.56%. Sigapore's Strait Times rose 0.53%.

US index futures moved between gains and losses. Trading in US index futures indicated Dow could fall 7 points at the opening bell today, 27 August 2009.

US markets ended flat on Wednesday, 26 August 2009 as a smaller-than-estimated rise in orders for some durable goods and possible curbs on raw-materials suppliers in China outweighed a surge in new-home sales. The Dow rose 4.23 points, or 0.04%, to 9,543.52. The S&P 500 index added 0.12 points, or 0.01%, to 1,028.12, while the Nasdaq Composite Index rose 0.20 points, or 0.01%, to 2,024.43.

In economic news, new-home sales shot up 9.6% in July 2009 to 433,000 units. The number blew past economists' expectation for a 1.6% increase. Another data showed orders orders for durable goods, excluding transportation, rose less than forecast in June 2009 despite overall orders posting their largest advance since July 2007.

The BSE 30-share Sensex was up 11.22 points or 0.07% to 15,781.07. The barometer index rose 84.06 points at the day's high of 15,853.71 in afternoon trade. The Sensex fell 84.36 points at the day's low of 15,685.49 in early trade.

The S&P CNX Nifty was up 7.35 points or 0.16% to 4,688.20. Nifty September 2009 futures were at 4705, at a premium of 16.80 points as compared to the spot closing of 4688.20. Turnover in NSE's futures & options (F&O) segment spurted to Rs 91,809.58 crore from Rs 78,077.71 crore on Wednesday, 26 August 2009.

BSE clocked a turnover of Rs 6546 crore, lower than Rs 6917.58 crore on Wednesday, 26 August 2009.

The market breadth, indicating the overall health of the market, was strong. On BSE, 1631 shares advanced as compared with 1127 that declined. A total of 79 shares remained unchanged.

Among the 30-member Sensex pack, 15 rose while the rest declined.

The market has surged in the past six days supported by positive global cues. The BSE Sensex has risen 971.43 points or 6.55% to 15,781.07 on Thursday, 27 August 2009 from 14,809.64 on 19 August 2009.

Equities have risen sharply this year on the back of heavy buying by foreign funds. The Sensex is up 6133.76 points or 63.58% in calendar year 2009 as on 27 August 2009. From a 3-year closing low of 8,160.40 on 9 March 2009, the Sensex is up 7620.67 points or 93.38% as on 27 August 2009. FII inflow in calendar year 2009 totaled Rs 37,849.20 crore (till 26 August 2009).

Coming back to today's trade, the BSE Mid-Cap index was up 0.38% and the BSE Small-Cap index rose 0.42%. Both the indices outperformed the Sensex.

The BSE Consumer Durables index (up 4.11%), the BSE Capital Goods index (up 1.16%), the BSE Healthcare index (up 1.13%), the BSE Teck index (up 0.62%), the BSE PSU index (up 0.5%), the BSE IT index (up 0.32%), the BSE Power index (up 0.28%), the BSE Auto index (up 0.25%), the BSE Oil & Gas index (up 0.12%), outperformed the Sensex.

The BSE Metal index (down 0.88%), the BSE Bankex (down 0.57%), the BSE Realty index (down 0.26%), the BSE FMCG index (up 0.01%), underperformed the Sensex.

India's largest steel maker by sales Tata Steel fell 5.14% after the company reported a net loss of Rs 2208.68 crore in Q1 June 2009 on a consolidated basis compared with a net profit of Rs 3900.90 crore in Q1 June 2008. The company's total income fell 46% to Rs 23496.21 crore in Q1 June 2009 over Q1 June 2008. The stock tanked soon after the result hit the market in late trade. The stock was the top loser from the Sensex pack.

Among other metal stocks, Hindustan Zinc, JSW Steel, Hindalco Industries and Steel Authority of India, fell by between 0.15% to 2.65%.

India's largest mobile phone company by sales Bharti Airtel rose 2.74% on reports the company and MTN Group may agree on a merger deal by mid-September. The stock was the top gainer from Sensex pack. However, South Africa's MTN said no decision or agreement to acquire any shares, GDRs, implement transaction with Bharti Airtel has yet been made by the boards of either MTN or Bharti.

Bharti and Johannesburg-based MTN, Africa's largest wireless carrier, on 20 August 2009 extended talks for a second time over a potential $23 billion merger that would challenge Vodafone Group Plc's push into India and Africa. The deadline is 30 September 2009.

India's second largest mobile telecom player by sales Reliance Communications (RCom) fell 1.5% despite reports the company is likely to sign a 10-year tower-sharing agreement with Chennai-based telecom operator STel. The deal is likley to bring annual revenue of about Rs 800-1000 crore for RCom

Bank stocks fell on profit taking. India's second largest private sector bank by net profit HDFC Bank fell 0.15% after its ADR fell 1.1% on Wednesday, 26 August 2009.

India's largest private sector bank by net profit ICICI Bank fell 1.36%. The bank has launched a special offer for new home loan borrowers effective from 20 August 2009. Under this, interest rates for home loans upto Rs 20-lakh will now be at 8.75%. For loans between Rs 20-Rs 50 lakh, the new rates will be 9.25% while those above Rs 50-lakh, the rate has been fixed at 9.75%.

But, India's biggest bank in terms of branch network State Bank of India (SBI) rose 0.61%.

IT stocks rose after the top three IT firms won a large outsourcing deal from British Petroluem. India's third largest software services exporter Wipro rose 2.01% as its ADR rose 2.16% on Wednesday. India's second largest software services exporter Infosys Technologies rose 0.39% as its American depository receipt (ADR) rose 2.62% on Wednesday, 26 August 2009. But, India's largest software services exporter TCS fell 0.67%.

In one of the largest deals, the top-three Indian vendors Infosys, TCS and Wipro along with IBM Corp bagged a slice of the $1.5 billion five year information technology (IT) outsourcing contract from British Petroleum Pcl (BP), one of the world's largest integrated oil and gas companies. The companies announced the BP deal after trading hours on Wednesday.

None of the three companies announced the order size. BP has been consolidating its IT vendors for the past 12 months, with goals to simplify its processes and improve service quality.

Realty shares fell on profit taking. Indiabulls Real Estate, Phoenix Mills, Unitech and DLF fell by between 0.34% to 3.31%.

India's largest private sector firm by market capitalisation and oil refiner Reliance Industries (RIL) was flat at Rs 2040.25. The stock hit a high of Rs 2056.50 and a low of Rs 2020.10. A panel of ministers has reportedly decided to protect NTPC's interests with regard to a gas dispute. As per reports, the government has decided to spell out its position in the two disputes involving the Krishna-Godavar Basin D6 block gas supplies - NTPC-Reliance Industries (RIL) and RIL-Reliance Natural Resources (RNRL).

On Friday, 21 August 2009 the government had clarified that it was not correct that it would earn Rs 500 crore from the KG basin gas, as claimed by Anil Ambani in the media. It said it would get Rs 84,000 crore.

The dispute between Reliance Industries and Reliance Natural Resources (RNRL) is centered around the price and supply of gas from KG basin operating by RIL to RNRL for the power plants of Anil Dhirubhai Ambani group. NTPC-RIL case also deals with price and supply of gas to NTPC's power plants from RIL.

India's largest oil exploration firm by market capitalisation ONGC rose 0.26% ahead of the opening of the intiail public offer (IPO) of state-run Oil India (OIL) on 7 September 2009. OIL, which produces 3.5 million tonne of oil annually, will offer fresh equity of 2.64 crore shares or 11%, while the Government will put on offer 10% of its stake in OIL to the public sector refining-cum-marketing companies — Indian Oil Corporation, HPCL and BPCL. The government has fixed a price band of Rs 950-1,050 per share for the Oil India IPO.

Cairn India fell 1.6% as crude oil declined. Cairn India will start pumping crude on Saturday 29 August 2009 from its Rajasthan block.

Crude oil declined for a third day on Thursday after a report showed that inventories unexpectedly rose last week in the US, the world's largest energy user. Crude oil for October delivery dropped as much as 62 cents, or 0.9%, to $70.81 a barrel in electronic trading on the New York Mercantile Exchange. Fall in crude oil prices would result in lower realizations from crude sales for oil exploration firms.

India's largest car maker by sales Maruti Suzuki was flat at Rs 1404.80 after its sales chief said on Thursday that company has seen double-digit percentage growth in sales this month and has not seen any impact so far due to drought in the country.

India's largest bike maker by sales Hero Honda Motors fell 1.77% even after the company said it will launch 9 new models by March 2010.

India's largest truck marker by sales Tata Motors fell 2.55% on profit taking after a strong rally in the past few weeks. The company has reportedly come to the public for the second time to raise about Rs 1,500 crore via fixed deposit schemes, offering up to 9.88% annual interest for a three-year deposit.

Capital goods shares rose on government's thrust on infrastructure. Higher government spending on infrastructure sector in 2009-2010 to provide a stimulus to the economy, may result in increase order flow for capital goods firms.

Larsen & Toubro, Bharat Heavy Electricals, ABB, Thermax, Siemens, BEML, rose by between 0.96% to 2.83 %

Power stocks fell on profit taking. Reliance Infrastructure, Torrent Power, GVK Power, PowerGrid Corporation of India, Reliance Power, Adani Power fell by between 0.58% to 2.23%.

Among a slew of IPOs lined from the sector include that of Indiabulls Power, JSW Energy, Jindal Power, Sterlite Energy, and GMR Energy.

Some FMCG stocks dipped on concerns deficient monsoon rains may crimp rural sales. FMCG firms derive a substantial revenue from rural India. Hindustan Unilever, Dabur India, Marico, Tata Tea, Britannia Industries fell by between 0.53% to 2.54%.

Shares of four tea makers rose after tea prices in Kenya, which sets global benchmark prices, hit record levels due to drought. Asian Tea & Exports, Warren Tea, McLeod Russel and Harrisons Malayalam rose by between 0.16% to 10%. Kenyan tea prices hit record levels for the second week running at the Mombasa auction on Wednesday, 26 August 2009 due to drought fears

Sugar stocks rose on bargain hunting after a recent fall. Shree Renuka Sugars, Bajaj Hindustan, Renuka Sugars rose by between 1.2% to 2.93%.

Sugar stocks fell recently after government on Monday 24 August 2009 decided to limit sugar stocks with bulk buyers.

Shares of export oriented sectors gained after the government extended tax sops for exports in its new foreign trade policy. From the textile pack, Gokaldas Exports, Arvind Mills, Alok Industries and Raymond rose by between 1.41% to 5%.

From leather sector, Bhartiya International, Mirza Tanneries, Liberty Shoes Crew Bos rose by between 0.39% to 7.18%.

Gitanjali Gems, Shrenuj & Company, Vaibhav Gems, SB&T International rose by between 4.65% to 17.58% from the gems and jewellery sector after the trade minister said government would allow a tax refund scheme for the sector.

Cals Refineries clocked the highest volume of 2.62 crore shares on BSE. Mahindra Satyam (2.14 crore shares), Reliance Natural Resources (1.68 crore shares), Alok Industries (1.53 crore shares) and Unitech (1.37 crore shares) were the other volume toppers in that order.

Aban Offshore clocked the highest turnover of Rs 377.02 crore on BSE. Mahindra Satyam (Rs 245.85 crore), Tata Steel (Rs 203.40 crore), HOEC (Rs 158.80 crore) and Reliance Capital (Rs 256.87 crore) were the other turnover toppers in that order.