Nifty surges to 15-month high

Key benchmark indices surged on the back of revival in monsoon and firm global stocks. The S&P CNX Nifty scales its highest level in nearly 15 months. The market rose in all the five trading sessions in the week ended Friday, 28 August 2009. Global markets rallied to 10-month highs buoyed by renewed hopes that the global economic recovery is gathering pace.

The BSE Sensex jumped 681.51 points or 4.47% to 15,922.34 in the week ended 28 August 2009. The S&P CNX Nifty gained 203.55 points or 4.49% to 4732.35, its highest closing since 2 June 2008.

The BSE Mid-Cap index jumped 304.38 points or 5.48% to 5,863.70 and the BSE Small-Cap index rose 498.78 points or 7.72% to 6,961.76 in the week.

World stocks rose after Federal Reserve Chairman Ben S. Bernanke and European Central Bank President Jean-Claude Trichet said in an annual meeting of policy makers on 21 August 2009, the world economy is pulling out of its deepest recession since the 1930s.

The US economy shrank at an annual pace of 1% between April and June 2009, unchanged from an initial estimate released last month, according to the latest data. Analysts had been expecting a downward revision, with some forecasting a contraction of 1.5%. Consumer spending contracted by at a lower-than-expected 1% in the second quarter. Consumer spending accounts for about 70% of US economic activity.

The UK economy contracted 0.7% the second quarter as the recession prompted companies to cut investment and inventories while consumers scaled back spending. The fall in gross domestic product was less than the 0.8% calculated last month, the Office for National Statistics said on 28 August 2009 in London.

Investor optimism about the global economy soared to its highest level in nearly six years, with portfolio managers putting their cash back into equity markets, a global fund manager survey for August 2009 by a foreign brokerage house showed.

A net 75% of survey respondents believe the world economy will strengthen in the coming 12 months, the highest reading since November 2003 and up from 63% in July 2009. Confidence about corporate health is at its highest since January 2004. A net 70% of the panel respondents expect global corporate profits to rise in the coming year, up from 51% last month.

Closer home, revival of monsoon rains boosted sentiment. India's monsoon rains were 5% below average in the week to 26 August 2009, coming in close to normal for the second successive week after a prolonged dry spell, the Meteorological Department said on 27 August 2009. Rainfall since 1 June to 26 August was 25% below normal, improving slightly from a deficit of 26% a week earlier. More than two-thirds of the people live in villages and 60% of the farm land depends on the annual rains.

The government expects GDP growth to accelerate to over 8% in 2010-11, with the economy showing signs of recovery, Finance Minister Pranab Mukherjee said on 27 August 2009. In the current fiscal, finance minister Pranab Mukherjee said the economy would expand more than 6%, despite scanty monsoon.

Growth had dipped to 6.7% in 2008-09 after over 9% growth in the previous three years as the global economic meltdown cast its shadow on the economy.

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 on 27 August 2009 while 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

Finance Minister Mukherjee on 26 August 2009 said reforms would continue in right earnest to get the economy back to 9% growth. At an event on evening 25 August 2009 on 'Mission 2010: The Reform Road Map', the finance minister said that the green shoots were visible in industry with basic goods, intermediates and consumer durables doing better in the first quarter.

Mukherjee made it clear that public spending won't push interest rates higher. Nor would the government's huge debt appetite leave private industry high and dry.

Equities have risen sharply this year on the back of heavy buying by foreign funds. The Sensex is up 6275.03 points or 65.04% in calendar year 2009 as on 28 August 2009. From a 3-year closing low of 8,160.40 on 9 March 2009, the Sensex is up 7761.94 points or 95.11% as on 28 August 2009. FII inflow in calendar year 2009 totaled Rs 39,192 crore (till 27 August 2009).

Trading for the week began on an upbeat not with market advancing on Monday, 24 August 2009 on the back of firm global stocks. The BSE 30-share Sensex gained 387.92 points or 2.55% to 15,628.75 and the S&P CNX Nifty rose 114 points or 2.52% to 4,642.80

Sustained buying in index pivotals helped key benchmark indices log small gains in what was a highly choppy trading session on Tuesday, 25 August 2009. Software stocks and index heavyweight Reliance Industries (RIL) led an intraday rebound. The BSE 30-share Sensex was up 59.72 points or 0.38% to 15,688.47 and the S&P CNX Nifty was up 16.55 points or 0.36% to 4,659.35.

Key benchmark indices extended gains for the fifth day in a row on Wednesday, 26 August 2009, after the Finance Minister said economic reforms would boost growth. Shares from the IT pack led the rally on the bourses. The BSE 30-share Sensex rose 81.38 points or 0.52% to 15,769.85 and the S&P CNX Nifty rose 21.50 points or 0.46% to 4,680.85.

Volatility ruled the roost on Thursday, 26 August 2009 as the key benchmark indices notched up marginal gains. High volatility was due to expiry of August 2009 derivative contracts. The BSE 30-share Sensex was up 11.22 points or 0.07% to 15,781.07 and the S&P CNX Nifty was up 7.35 points or 0.16% to 4,688.20.

Key benchmark indices extended gains for the seventh straight session on Friday, 28 August 2009 on revival of monsoon rains. The BSE 30-share Sensex rose 141.27 points or 0.9% to 15922.34, its highest closing since 3 August 2009. The S&P CNX Nifty gained 44.15 points or 0.94% to 4,732.35 its highest closing since 2 June 2008.

India's largest private sector firm by market capitalisation and oil refiner Reliance Industries (RIL) rose 7.34% to Rs 2070.30 in the week. As per reports, a hearing on the gas dispute between RIL and Reliance Natural Resources (RNRL) will take place in the Supreme Court (SC) on 20 October 2009. Earlier, the SC had announced 1 September 2009 as the date of hearing of the case. The dispute 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.

In June, the Bombay High Court had ruled that Reliance Industries should supply gas to Reliance Natural at $2.34 per million metric British thermal unit, nearly half the $4.20 price in an interim court order in January 2009.

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.

Aban Offshore galloped 33.77% after the company said it expects revenue of $695 million from two contracts it signed for deploying four rigs. The company announced the new order win after market hours on 25 August 2009.

Realty stocks rose on reports demand for residential projects in major cities is picking up on lower home loan rates, property price cuts by developers and a recovery in the job market. Parsvnath Developers (up 8.93%), HDIL (up 13.33%), Indiabulls Real Estate (up 6.08%), Unitech (up 15.57%), advanced.

India's largest realty firm by market capitalisation DLF gained 8.10% on recent reports the company had bagged a 350-acre plot for Rs 1,750 crore in Haryana, New Delhi, for developing a recreation and leisure project, making it one of the costliest land deals in recent times.

Metal shares gained on firm prices on the London Metal Exchange. Hindalco Industries (up 5%), Sterlite Industries (up 10.71%), Hindustan Zinc (up 1.03%), and JSW Steel (up 1.07%), rose.

India's largest steel maker by sales Tata Steel fell 1.42% 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 results were announced during market hours on 27 August 2009.

Telecom stocks rose after the government on 27 August 2009 fixed Rs 3500 crore as a base price for all-India third-generation spectrum. India's largest mobile phone company by sales Bharti Airtel rose 5.66% on reports the company and MTN Group may agree on a merger deal by mid-September. 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 new deadline is 30 September 2009.

India's second largest mobile telecom player by sales Reliance Communications rose 6.82% after the company signed a deal with S Tel to share telecom infrastructure.

The government has also decided to fix Rs 1750 crore as the base price for auctioning for WiMAX spectrum for wireless broadband services. Telecom Minister A Raja said the government will get at least Rs 25000 crore ($5.1 billion) from the sale of these auctions which will be held within 90 days.

Bank stocks were mixed. India's biggest commercial bank in terms of branch network State Bank of India (SBI) rose 0.27%.

India's largest private sector bank by net profit ICICI Bank rose 2.41%. 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%.

India's second largest private sector bank by net profit HDFC Bank fell 0.49% on profit booking.

India's largest engineering & construction company by sales Larsen & Toubro advanced 8.86% after it won four orders for electrical projects totaling Rs 1044 crore from Qatar, United Arab Emirates and Oman. The contracts are to build electrical sub-stations. The announcement was made on 24 August 2009.

Auto stocks rose after a recent survey showed that recruitment in auto and ancillary units were up 11% in July 2009, compared with June 2009, raising optimism that the sector is once again poised for a high growth after the global economic slowdown had hit it hard last year.

India's largest small car maker by sales Maruti Suzuki India was up 2.61%. The company on 26 August 2009 launched a new version of its small car Estilo with a fuel efficient engine at an introductory price between Rs 3.12 lakh and Rs 3.95 lakh (ex-showroom, Delhi).

India's largest tractor marker by sales Mahindra & Mahindra rose 3%. India's largest bike marker by sales Hero Honda Motors gained 1.58%.

India's largest truck marker by sales Tata Motors surged 13.20% to Rs 489.45 after striking a 52-week high of Rs 505 on 26 August 2009. At its annual general meeting in Mumbai on 25 August 2009, Ratan Tata, Chairman of Tata Motors, said that Tata Motors and Jaguar Land Rover will come through this tough period as leaner and more cost-efficient companies.

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 10.19%. India's second largest software services exporter Infosys Technologies rose 7.85%. India's largest software services exporter TCS gained 6.25%.

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 26 August 2009

HCL Technologies surged 9.40% after the company's net profit rose 26.45% to Rs 192.94 crore on 9% rise in total income to Rs 1191.71 crore in Q4 June 2009 over Q3 March 2009. The company announced its result before market hours on 25 August 2009.