Sensex, Nifty soar to 14-month high as global stocks rally

The key benchmark indices rose for the third session in a row, helped by firm European stocks and higher US index futures. Sign of recovery in the Indian economy, better-than-expected Q1 June 2009 results from India Inc which just got over and buying by foreign funds underpinned sentiment. The BSE 30-share Sensex was up 253.92 points or 1.62%, up close to 315 points from the day's low and off close to 40 points from the day's high.

The barometer index BSE Sensex and the 50-unit S&P CNX Nifty, both attained their highest closing level in 14 months. The Sensex has risen 750.77 points or 4.94% in last three trading sessions.

Auto stocks rose on improved sales in the month just gone by whereas firm metal prices on the London Metal Exchanges boosted metal counters. India's largest car maker by sales Maruti Suzuki India hit a record high. Realty stocks rose and index heavyweight Reliance Industries also edged higher

The market was volatile. Equities pared gains after a firm start triggered by gains in some Asian stocks. The market regained strength after moving between the positive and negative terrain in mid-morning trade. The market pared gains once again in early afternoon trade. Stocks slipped into the red once again after a government data showed fall in exports. However, it soon regained positive zone on gains in European stocks and higher US index futures. The market surged to hit fresh intraday high in mid-afternoon trade. The market further extended gains in late trade.

Strong inflows from foreign funds has boosted the bourses in the past few weeks. FII inflow in July 2009 totaled Rs 11,625.20 crore. FIIs had bought stocks worth a net Rs 3,224.90 crore in June 2009. FII inflow in calendar year 2009 totaled Rs 36,169.70 crore (till 31 July 2009).

The Q1 June 2009 results of India Inc were encouraging, with lower costs helping bottomline growth. The combined net profit of 2661 companies rose 17.3% to Rs 73478 crore on 5% fall in sales to Rs 713706 crore in Q1 June 2009 over Q1 June 2008.

But data released by the government today showed that exports fell 27.7% in June 2009 to $12.8 billion, its ninth straight monthly fall. Imports dropped 29.3% to $18.98 billion in June 2009. Exports were down 31.3% at $35.4 billion between April and June this year from the same period in the previous year.

Nevertheless, in another indicator that the economy is recovering, growth in India's manufacturing activity held steady in July 2009 amid robust local demand and a slight rebound in exports. However, intense competition curbed companies' pricing power even as raw material costs jumped, a survey showed. The Markit Purchasing Managers' Index (PMI), based on a survey of 500 companies, was at 55.30 in July 2009, little changed from 55.34 in June 2009. It has been above the threshold of 50 -- which separates expansion from contraction -- for four straight months. The new orders index rose to 59.75, its highest in nine months, from 58.56 in June 2009.

A weak monsoon remains a cause of concern though. 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 30 July 2009. On the flip side, water levels in India's 81 main reservoirs rose to 35% of capacity in the week to 30 July 2009, up from 23% a week earlier and 31% a year ago, government data showed. More than two-thirds of the people live in villages and 60% of the farm land depends on the annual rains.

Meanwhile, the finances of the government showed improvement during the first quarter of 2009-10 (Q1 June 2009), with the fiscal deficit working out to be 31% of the estimates as compared to 65% in the corresponding period last fiscal. Against the Budget estimate of Rs 4,00,996 crore for the entire financial year, the fiscal deficit stood at Rs 1,24,302 crore at the end of 30 June 2009. It is to be noted that the fiscal deficit was revised upward at Rs 4,00,996 crore in the full Budget tabled in Parliament on 6 July 2009 against Rs 3,32,835 crore projected in the interim Budget in February 2009.

The Reserve Bank of India (RBI) on Friday, 31 July 2009, extended the interest subsidy of 2% to exporters, battling demand recession in western economies, by six months till March 2010.

European shares rose, with banks advancing after reports that UBS may avoid a fine from the US and Barclays reported a profit. Key benchmark indices in France, Germany and UK were up by between 1.53% to 1.69%.

The Markit euro-zone manufacturing purchasing managers index rose to 46.3 in July 2009, up from 42.6 in June 2009, the second strongest rise in point terms in the history of the survey and the highest reading in 11 months. Although still below the 50 no-change line, the index rise was led by a near-stabilization of manufacturing production.

Select Asian stocks rose after CLSA Asia Pacific Markets said its China manufacturing PMI remained in expansionary territory for the fourth consecutive month in July 2009, rising to 52.8, up from 51.8 in June 2009. Key benchmark indices in China, Hong Kong Singapore and South Korea rose by between 0.49% to 1.48%. But key benchmark indices in Japan, and Taiwan fell by between 0.04% to 0.3%.

Trading in US index futures indicated the Dow could rise 82 points at the opening bell today, 3 August 2009.

On the Wall Street on Friday, 31 July 2009, the Dow pulled off a modest gain, capping a rocky week and month. Markets stayed in the green for much of the day after the Q2 GDP showed a less than expected contraction. The Dow gained 17.15 points, or 0.2%, to 9,171.61. The S&P 500 index added 0.73 points, or 0.1, to 987.48. But the Nasdaq Composite index slipped 5.80 points, or 0.3%, to 1,978.50.

The BSE 30-share Sensex jumped 253.92 points or 1.62% to 15,924.23, its highest closing since 3 June 2008. The Sensex rose 293.05 points at the day's high of 15,963.36 in late trade. The Sensex fell 61.91 points at the day's low of 15,608.40 in early afternoon trade.

The S&P CNX Nifty was up 74.95 points or 1.62% to 4,711.40, its highest closing since 3 June 2008. It hit a high of 4,723.75. Nifty August 2009 futures were at 4729.90, at a premium of 18.50 points as compared to the spot closing of 4711.40. Turnover in NSE's futures & options (F&O) was Rs 50,805.16 crore, lower than Rs 57,151.46 crore on Friday, 31 July 2009.

BSE clocked a turnover of Rs 5,471 crore lower than Rs 6,292.49 crore on Friday, 31 July 2009.

The Sensex is up 6276.92 points or 65.06% in calendar year 2009 as on 3 August 2009. From a 3-year closing low of 8,160.40 on 9 March 2009, the Sensex has risen 7,763.83 points or 95.14% as on 3 August 2009.

Coming back to today's trade, the market breadth, indicating the overall health of the market, was strong. The breadth had weakened in mid-morning trade from a strong breadth earlier in the day. On BSE, 1,755 shares advanced as compared with 951 that declined. A total of 71 shares remained unchanged.

Among the 30-member Sensex pack, 26 rose while rest declined.

The BSE Mid-Cap index was up 2.36% and the BSE Small-Cap index was up 1.74%. Both the indices outperformed Sensex.

The BSE Auto index (up 4.6%), the BSE Realty index (up 4.19%), the BSE Metal index (up 3.41%), the BSE Power index (up 2.19%), the BSE Oil & Gas index (up 2.04%), the BSE Capital Goods index (up 1.82%), outperformed the Sensex.

The BSE Consumer Durables index (down 0.8%), the BSE FMCG index (down 0.71%), the BSE PSU index (up 0.98%), the BSE IT index (up 0.99%), the BSE Teck index (up 1.2%), the BSE Bankex (up 1.2%), the BSE Healthcare index (up 1.41%), underperformed the Sensex.

India's largest private sector firm by market capitalisation and oil refiner Reliance Industries (RIL) rose 2.96% to Rs 2,014.95 on bargain hunting after a recent sharp fall. The Supreme Court on Thursday said, it will give a date on 1 September 2009 to expedite the decision pertaining to the Krishna-Godavari basin gas dispute between Mukesh Ambani's Reliance Industries (RIL) and Anil's Ambani's Reliance Natural Resources (RNRL). RNRL counsels Mukul Rohatgi and Mahesh Agrawal sought an early decision in the case.

RNRL chairman Anil Ambani has said the gas supply dispute between RIL and Reliance Natural Resources (RNRL) vitally affects public interest and will seek an early judgment in the case. 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 firms rose as crude oil surged past $70 a barrel mark for the first time in a month on signs the global economy is recovering from recession. Cairn India rose 3.39%. India's largest state-run oil exploration firm by sales ONGC rose 1%. Crude oil for September delivery rose as much as 66 cents, or 1% to $70.11 a barrel on the New York Mercantile Exchange. Rise in crude oil prices would result in higher realizations from crude sales for oil exploration firms.

But PSU OMCs fell on rise in crude oil prices. BPCL, Indian Oil Corporation and HPCL fell by between 0.85% to 2.22%. Rise in crude oil prices will result in increase in under-recoveries for the PSU OMCs on domestic sale of fuels at controlled prices.

Oil services providers rose as increase in oil price may result in increase in exploration and production activities by oil firms which in turn may result in increase in demand for oil rigs. Aban Offshore, Asian Oilfield, Great Offshore rose by between 4.39% to 9.74%.

Rate sensitive realty shares rose on the government's thrust on the housing sector in the Union Budget 2009-2010. Unitech, Ackruti City, Indiabulls Real Estate and Omaxe rose by between 1.73% to 6.35%.

India's largest real estate developer by sales DLF reversed early losses and rose 2.4%. The company's net profit fell 85.7% to Rs 100.40 crore on 67.3% fall in sales to Rs 417.97 crore in Q1 June 2009 over Q1 June 2008. The company announced the results after trading hours on 30 June 2009.

Auto stocks jumped after posting strong July 2009 sales figures. India's largest tractor maker by sales Mahindra & Mahindra rose 6.88% after total sales rose 27% to 22463 units in July 2009 over July 2008.

India's top small car maker by sales Maruti Suzuki India rose 3.98% to Rs 1,469.55 after total sales rose 33.5% to 78,074 units in July 2009 over July 2008. The stock hit a record high of Rs 1,478 today.

India's largest bike maker by sales Hero Honda Motors rose 1% after total sales rose 30.3% to 3.66 lakh units in July 2009 over July 2008.

TVS Motor Company rose 1.6% after scooter sales rose 14.55% to 27673 units in July 2009 over July 2008. Total two wheeler sales remained flat at 1.21 lakh units in July 2009 compared to 1.20 lakh units in July 2008.

Bajaj Auto rose 6.52% as it plans to raise its domestic motorcycle production by 25% in August 2009 due to strong demand. The company's total sales fell 0.4% to 192,835 units in July 2009 over July 2008.

India's largest commercial vehicle maker by sales Tata Motors rose 2.3%. The company's total vehicle sales rose 18% to 48,054 units in July 2009 over July 2008.

Besides auto stocks, shares of a number of other auto component makers surged today. Improved sales of automobiles in India and Europe and an expected recovery in US auto sales drove shares of auto component makers higher. Bosch, Gabriel India, Sona Koyo Industries, Exide Industries, Banco Products India and Amtek auto rose by between 0.44% to 17.95%.

Tyre stocks, TVS Srichakra, Apollo Tyres, Ceat rose by between 0.62% to 20%.

Metal stocks rose after LMEX, a gauge of six metals traded on the London Metal Exchange, rose 1.71% on Friday, 31 July 2009.

India's largest private sector steel maker by sales Tata Steel rose 4.52%. The company's 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 29 July 2009.

India's second largest steel maker by sales Steel Authority of India rose 2.39%. 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 on 30 July 2009.

India's largest copper market by sales Sterlite Industries rose 3.9%. 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.

India's largest aluminum maker by sales Hindalco Industries rose 7.98% after the company reported lesser-than-expected 31% fall in net profit to Rs 480.56 crore in Q1 June 2009 over Q1 June 2008. The result hit the market during trading hours on Friday, 31 July 2009.

India's second-largest aluminum producer by sales National Aluminium Company rose 5.11% after it raised the price for the second month in a row after aluminum gained on the London Metal Exchange. The price increased as much as 6,000 rupees ($125) a metric ton, or 5.8 % Chairman C. R. Pradhan said.

India's largest mobile telecom player by sales Bharti Airtel rose 0.13% after the company extended a deadline for merger talks with South Africa's MTN Group until 31 August 2009. The structure and terms of the potential transaction may be adjusted to reflect further discussions between the parties, Bharti said in a statement.

India's second largest mobile services provider by sales Reliance Communications rose 5.17% after consolidated net profit rose 8.3% to Rs 1637 crore in Q1 June 2009 over Q1 June 2008. The results were announced after market hours on Friday 31 July 2009.

Grasim Industries rose 1.82% and unit UltraTech Cement rose 0.28%. India's Aditya Birla Group said on Monday its cement shipments rose 10% to 2.7 million tonnes in July 2009 over July 2008. The group's cement business includes flagship Grasim Industries and unit UltraTech Cement with a combined production capacity of 42 million tonnes a year.

Sun Pharmaceutical Industries, India biggest drugmaker by market value, fell 0.4% even after company settled a lawsuit with MedImmune Inc. on a generic version of the cancer drug Ethyol. MedImmune granted Sun a license to certain patents allowing the Indian company to continue to sell the generic version in the US, Sun Pharma said.

Divi's Laboratories plunged 4.57% after consolidated net profit tumbled 95.5% to Rs 4.29 crore in Q1 June 2009 over Q1 June 2008.

ome power stocks rose after a strong response to the Adani Power initial public offer (IPO) which closed on Friday, 31 July 2009. Torrent Power, Reliance Power, NTPC, CESC rose by between 0.83% to 2.38%. The Adani Power IPO was subscribed 21.51 times.

Tata Power Company rose 4.31% after its net profit rose 144.19% to Rs 396.97 crore in Q1 June 2009 over Q1 June 2008. The result hit the market on Friday, 31 July 2009.

Reliance Infrastructure rose 1.47%. Net profit rose 25.35% to Rs 316.57 crore in Q1 June 2009 over Q1 June 2008. The company announced result after market hours on Thursday, 30 July 2009.

But Suzlon Energy tumbled 4.11% after it reported a net loss of Rs 160.47 crore in Q1 June 2009 compared with a net profit of Rs 88.04 crore in Q1 June 2008.

Capital goods and construction stocks rose on government's thrust on infrastructure sector in Union Budget 2009-2010. India's largest electric equipment maker by sales Bharat Heavy Electricals (Bhel) rose 5.15% on plans to enhance its capabilities for manufacture and supply of nuclear reactor components like steam generator for higher size reactors proposed to be installed in the country.

India's largest engineering and construction firm by sales Larsen & Toubro rose 0.85% after company said on Monday it has won two contracts from state-run ONGC, aggregating over Rs 5300 crore.

Among other capital goods stocks, Punj Lloyd, ABB, BEML, Praj Industries, Siemens, rose by between 1.42% to 9.2%.

Among construction shares, Nagarjuna Construction Company, Hindustan Construction Company, Era Infra Engineering, Gayatri Projects and IVRCL Infrastructure & Projects, rose by between 0.6% to 4.27%.

IT stocks rose on better than expected Q1 June 2008 result announced by IT pivotals over the past few days. India's second largest IT exporter by sales Infosys rose 0.58% after its American depository receipt (ADR) rose 1.94% on Friday. India's third largest IT exporter by sales Wipro rose 0.1% as its ADR rose 0.9% on Friday. India's largest IT exporter by sales TCS rose 0.84%.

FMCG stocks fell on concerns over progress of India's annual monsoon. FMCG firms derive substantial revenue from rural sector. Britannia Industries, ITC, Nestle India, REI Agro, Marico fell by between 0.7% to 4.55%.

India's largest FMCG company by sales Hindustan Unilever fell 2.25%. 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 early last week.

Bank stocks rose after some leading banks posted strong Q1 June 2009 results in the past few days. India's biggest commercial bank in terms of branch network State Bank of India (SBI) rose 1.79% extending recent gains as 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 on 30 July 2009.

India's largest private sector bank in terms of operating income ICICI Bank rose 1.89% as its ADR rose 0.93% on Friday. But, India's second largest private sector bank in terms of operating income HDFC Bank fell 0.39% even as its ADR rose 1.68% on Friday, 31 July 2009.

Unitech clocked highest volume of 2.39 crore shares on BSE. Suzlon Energy (2.13 crore shares), Cals Refineries (1.87 crore shares), Ispat Industries (1.7 crore shares) and Excel Infoways (1.28 crore shares) were the other volume toppers in that order.

Unitech clocked highest turnover of Rs 226.20 crore on BSE. Aban Offshore (224.73 crore), Suzlon Energy (Rs 203.92 crore), Tata Steel (Rs 178.96 crore) and DLF (Rs 171.08 crore) were the other turnover toppers in that order.