Market gains on firm global cues

Firm global cues helped domestic bourses recover some of the Monday's sharp losses. The BSE 30-share Sensex rose 250.34 points or 1.69%, off close to 100 points from the day's high and up close to 295 points from the day's low. The Sensex closed above psychological 15,000 mark. It had fallen below this mark on Monday in a broad based sell off. IT stocks fell. Buying was witnessed in capital goods, realty and metal stocks.

The market was volatile. The market after opening lower turned positive for a brief period before reversing gains tracking weak Asia. Market surged to fresh day's high in mid-morning trade. Market extended gains later as Asian stocks reversed losses and European stocks rose. Market pared gains in mid-afternoon trade.

Global sell-off after a disappointing US consumer sentiment report reigniting concerns about the global economic recovery triggered a sharp sell-off on the domestic bourses on Monday, 17 August 2009. The BSE 30-share Sensex fell 626.71 points or 4.07% at 14,784.92 on Monday.

There is no fresh proposal for a farm debt waiver and economic growth is expected to be 6 percent-plus in the current financial year ending March 2010, Finance Minister Pranab Mukherjee said on Tuesday.

Meanwhile, India's July exports have fallen 26 % from a year earlier, Trade Secretary Rahul Khullar said on Tuesday. Government is not condsidering ban on maize, soymeal exports as of now he said.

The monsoon situation remains grim with the country heading into the worst drought year over the last two decades. Monsoon was 56% below normal in week to 12 August 2009 and was 72% below normal in the soyabean growing central region in past one week, India Meteorological Department (IMD) said on 13 August 2009. Monsoon rains were 29% below normal during the period from 1 June 2009 to 12 August 2009. However, India's weather office has ruled out an early withdrawal for this year's monsoon which has still one and half months to complete its full journey. The progress of monsoon is closely watched as more than two-thirds of the people live in villages and 60% of the farm land depends on the annual rains.

Prime Minister Manmohan Singh said on Tuesday that the country was facing a drought threat India reportedly aims to raise planting of winter-sown crops and improve irrigation to make up for the damage to farms and to try to counter rising food prices after poor monsoon rains hurt crops such as rice and sugarcane..

India's growth projection could be trimmed due to a poor monsoon, but the country has adequate food stocks to counter inflationary pressures, the plan panel Deputy Chairman Montek Singh Ahluwalia said on Tuesday.

European shares were higher on Tuesday, with banks and commodity stocks gaining as investors awaited the release of German ZEW figures and U.S. housing starts later in the day. The key benchmark indices in France, Germany and UK were up by between 0.53% to 0.8%.

Asian shares clawed their way back from early lows on Tuesday following wild swings in Shanghai, as investors worried whether more bouts of profit taking will spell the end of the bull market that emerged from the financial crisis.The key benchmark indices in Hong Kong, South Korea, Japan, Singapore rose by between 0.21% to 0.85%.

The Shanghai Composite Index rose 1.4% in volatile trade after yesterday's 5.8 % slump, which was the steepest since November 2008. But, Taiwan's Taiwan Weighted fell 2.05%.

Trading in US index futures indicated Dow could rise 63 points at the opening bell today, 18 August 2009.

The US markets plunged more than 2% on Monday, 17 August 2009 in its worst single-session percentage loss in six weeks.The Dow plunged 186.06 points, or 2%, to 9,135.34. The S&P 500 index fell 24.36 points, or 2.4%, to 979.73. The Nasdaq fell 54.68 points, or 2.8%, to 1,930.84.

The selloff came despite some encouraging economic news. Investors were uninspired by the news that the empire state manufacturing index moved into positive territory, signaling growth for the first time since April 2007. The reading came in better than expected at 12.08.

In more economic news, the Fed and treasury opted to extend the term asset-backed securities lending facility or the talf.

The BSE 30-share Sensex rose 250.34 points or 1.69% at 15,035.26 . The Sensex rose 349.59 points at the day's high of 15,134.51 in afternoon trade. At the day's low of 14,740.26, the Sensex fell 44.66 points in early trade.

The S&P CNX Nifty was up 71 points or 1.62% to 4,458.90. Nifty August 2009 futures were at 4455.10 at a discount of 3.80 points as compared to the spot closing of 4458.90. Turnover in NSE's futures & options (F&O) segment rose to Rs 73,655.74 crore from Rs 70,983.18 crore on Monday, 17 August 2009.

BSE clocked a turnover of Rs 5166 crore higher than Rs 4,977.50 crore on Monday, 17 August 2009.

Equities have risen sharply this year on the back of heavy buying by foreign funds. The Sensex is up 5387.95 points or 55.84% in calendar year 2009 as on 18 August 2009. From a 3-year closing low of 8,160.40 on 9 March 2009, the Sensex is up 6,874.86 points or 84.24% as on 18 August 2009. FII inflow in calendar year 2009 totaled Rs 36,571.70 crore (till 13 August 2009).

Coming back to today's trade, the BSE Mid-Cap index was up 2.06% and the BSE Small-Cap index was up 2.09%. Both the indices outperformed the Sensex.

The BSE Capital Goods index (up 3.64%), the BSE Realty index (up 2.39%), the BSE Metal index (up 2.3%), the BSE Power index (up 2.11%), the BSE PSU index (up 1.79%), outperformed the Sensex.

The BSE IT index (up 0.09%), the BSE Consumer Durables index (up 0.6%), the BSE Healthcare index (up 0.61%), the BSE Oil & Gas index (up 0.87%), the BSE Teck index (up 0.96%), the BSE FMCG index (up 1.55%), the BSE Bankex (up 1.63%), underperformed the Sensex.

The BSE Auto index rose 1.69% and matched Sensex's 1.69% jump.

The market breadth, indicating the overall health of the market, was strong. On BSE, 1702 shares advanced as compared with 909 that declined. 79 shares remained unchanged.

From 30 share Sensex pack, 25 stocks rose and rest fell.

India's largest private sector firm by market capitalisation and oil refiner Reliance Industries (RIL) rose 0.35% to Rs 1946.40. The stock hit a high of Rs 1,955.80 and a low of Rs 1920. Reliance Industries has reportedly initiated talks with global energy majors to divest its shareholding in at least half-a-dozen overseas exploration blocks to reduce risk. RIL owns majority stakes, from 70% to 100%, in blocks in countries including Columbia, Oman, Australia and Yemen through its wholly-owned subsidiary Reliance Exploration and Production DMCC (REP DMCC).

As per recent report Prime Minister Manmohan Singh has constituted a panel of four senior cabinet ministers that will continuously review the government's position in the Supreme Court case over allocation of gas from the Krishna-Godavari basin to ensure that their ministries don't speak in divergent voices on the vexed issue.

The dispute between Reliance Industries and Reliance Natural Resources (RNRL) which 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.

Oil exploration stocks rose as crude oil rose today, snapping two days of losses, as the dollar's decline spurred investors to purchase commodities as an alternative investment. Rise in crude oil prices would result in higher realizations from crude sales for oil exploration firms.

India's largest state-run oil exploration firm by sales ONGC rose 1.46%. Crude oil for September delivery rose 0.15% to $ 66,85 a barrel on the New York Mercantile Exchange.

Cairn India rose 0.91%. As per recent reports, the company is likely to start crude production from its Rajasthan oil fields later this month. The company has already reached pricing agreements for the crude with principal buyers, Indian Oil Corporation and Mangalore Refinery and Petrochemicals.

Shares of three public sector oil marketing companies rose on expectations that a hike in retail fuel prices in early July 2009 may boost Q2 September 2009 results. BPCL, HPCL and Indian Oil Corporation (IOC) rose by between 2.48% to 3.6%. On 1 July 2009, the government had hiked petrol price by Rs 4 per litre and diesel by Rs 2 per litre.

The three public sector oil marketing firms reported strong Q1 June 2009 results as they incurred negligible underrecoveries on domestic sale of fuel at controlled prices. The strong performance was despite lack of any oil bonds from the government.

Metal shares rose as Shanghai copper rose on Tuesday after falling by its 5 % limit in the previous session, while London futures bounced back, rising 1%. Steel Authority of India, National; Aluminum Company, Sterlite Industries, Hindalco Industries, Tata Steel, Hindustan Zinc rose by between 0.09% to 6.08%.

Realty shares rose on bargain hunting after Monday's sharp losses on hopes the government's thrust on housing sector in the Union Budget 2009-2010 may help extend recovery in housing demand witnessed in the past few months. Phoenix Mills, Omaxe, Indiabulls Real Estate, Ansal Properties, DLF, Anant Raj Industries rose by between 0.6% to 5.47%.

IT stocks extended recent fall on unexpected decline in a U.S. consumer confidence index after weak US retail sales and increase in weekly jobless claims. IT companies derive a lion's share of revenues from exports to the US. India's second largest IT exporter by sales Infosys fell 0.59% as its American depository receipt (ADR) fell 3.13% on Monday. India's largest IT exporter by sales TCS fell 0.19%. But, India's third largest IT exporter by sales Wipro rose 0.85% even as its ADR fell 4.8% on Monday.

Bank stocks rose on bargain hunting after the recent fall. India's largest private sector bank by net profit ICICI Bank rose 2.1% even as its ADR fell 6.82% on Monday.

India's biggest commercial bank in terms of branch network State Bank of India (SBI) rose 1.21%.

India's second largest private sector bank by net profit HDFC Bank rose 2.39% even as its ADR fell 2.75% on Monday.

India's largest dedicated home loan lender HDFC rose 3.06%. The lender on Monday raised Rs 4300 crore through a qualified institutional placement issue of non-convertible debentures (NCD) with detachable warrants.

Construction, 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 construction and capital goods firms and may help boost cement demand. Among construction shares, IVRCL Infrastructure & Projects, Gayatri Projects, Hindustan Construction Company, Nagarjuna Construction Company rose by between 0.59% to 4.78%.

Bidding is expected to start soon on 139 road projects covering 14,395 kilometres at a cost of about US$ 21 billion.

Capital goods stocks, Larsen & Toubro, Punj Lloyd, ABB, Crompton Greaves, Praj Industries rose by between 1.95% to 4.86%.

Power companies rose boosted as investor faith in power sector after recent robust subscription for initial public offers of NHPC and Adani Power. NTPC, CESC, Power Grid Corporation, Tata Power Company, Reliance Infrastructure, Jindal Steel and Power, GVK Power & Infrastructure rose by between 0.79% to 2.21%.

India's largest mobile operator by sales Bharti Airtel rose 2.87% on reports it has received offers from more than a dozen offshore banks eager to finance its merger with South African mobile-phone company MTN Group.

Auto stocks rose on bargain hunting after recent fall on concerns arising from scanty rains. Auto firms derive substantial revenue from rural India. Tata Motors, Maruti Suzuki India, Hero Honda Motors, Mahindra & Mahindra, TVS Motor Company rose by between 0.01% to 2.89%.

FMCG stocks fell on concerns over scanty rains. FMCG firms derive substantial revenue from rural markets. Nestle India, REI Agro, ITC, Tata Tea, Hindustan Unilever fell by between 0.15% to 1.44%.

Shares in dry bulk carriers rose after the Baltic Exchange's main sea freight index which tracks rates to ship dry commodities, rose to a one-week high on Monday suggesting commodity buying was slowly picking up. Mercator Lines, SCI, Great Eastern Eastern Shipping and Essar Shipping rose by between 0.9% to 4.09%.

The index, which gauges the cost of shipping resources including iron ore, cement, grain, coal and fertiliser, rose 0.8 percent to 2,774 points in a third straight session.

Unitech clocked the highest volume of 3 crore shares on BSE. Firstsource Solutions (2.4 crore shares), IFCI (1.93 crore shares), Cals Refineries (1.65 crore shares) and Suzlon Energy (1.16 crore shares) were the other volume toppers in that order.

Unitech clocked the highest turnover of Rs 256.45 crore on BSE. Tata Steel (Rs 193.48 crore), Reliance Industries (Rs 159.57 crore), DLF (Rs 140.73 crore) and Reliance Capital (Rs 138.73 crore) were the other turnover toppers in that order.