Sensex regains 15,000 level

Firm global stocks helped Indian stocks edge higher in what was a volatile trading session. The barometer index BSE Sensex regained the psychological 15,000 level within a day after falling below that mark on Wednesday, 19 August 2009. The BSE 30-share Sensex jumped 202.68 points or 1.37%, off 132.68 points from the day's high and up 84.14 points from the day's low. But the upmove was on the back of lower turnover.

As per provisional data, foreign funds today, 20 August 2009, sold stocks worth a net Rs 438.19 crore. Domestic funds bought equities worth a net Rs 489.42 crore

Stocks rose across the globe led by a near 5% rally in China's Shanghai Composite index. Closer home, auto, metal, and banking sector stocks hogged limelight. All sectoral indices on BSE logged gains. Adani Power settled at Rs 100.05 on BSE, a marginal premium to its the initial public offer (IPO) price of Rs 100 per share.

Index heavyweight L&T came sharply off the higher level in late trade soon after global rating agency Moody's cut its rating outlook on the stock
from stable to negative.

Intraday volatility on the bourses was high today, 20 August 2009. The BSE Sensex today regained the psychological 15,000 mark as the market surged in early trade on firm global stocks. After an initial surge, the market cooled off a bit in morning trade. It firmed up again later. The market witnessed alternate bouts of rallies and profit taking after the barometer index surged to the day's high in mid-morning trade.

The Sensex struck a fresh intraday high in mid-afternoon trade on media reports that the monsoon deficit has narrowed. A sharp slide was witnessed shortly as index heavyweights Reliance Industries (RIL), L&T and ICICI Bank pared intraday gains. The barometer index alternatively moved above and below the psychological 15,000 mark in late trade. It ended the day above that mark.

The cumulative rainfall deficit in the country has reportedly narrowed to 27% during the period from 1 June 2009 to 18 August 2009 from 29% during the period from 1 June 2009 to 12 August 2009. Annual monsoon rains, running between June to September, are the main source of irrigation for farms and are crucial for Asia's third-largest economy 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 recently said that India is equipped to handle a widespread drought as there is room for several fiscal steps to cushion the impact of a dry spell.

Inflation based on the wholesale price index (WPI) declined 1.53% in the year through 8 August 2009, government data released today, 20 August 2009 showed. The decline was lower than the previous week's annual fall of 1.74%. It was the tenth consecutive fall in the headline inflation. However, the falling headline inflation is only due to a statistical effect caused by sharply higher prices a year earlier and consumer price inflation remains high.

European markets were trading firm today, 20 August 2009 led by commodity shares. Key benchmark indices in UK, Germany and France were up by between 1.23% and 1.39%.

Asian markets advanced today, 20 August 2009 on overnight gains in US stocks, with China's Shanghai Composite advancing 4.52%. Chinese market rallied on reports that the stock market regulator had approved new mutual funds this week to help underpin the market that has slid nearly 20% since hitting a 14-month high earlier in the month.

Key benchmark indices in Honk Kong, Singapore, Japan and South Korea were up by between 1.46% and 1.97%. However, the Taiwan Weighted index slipped 0.82%.

US markets recovered from intra-day lows and ended higher on Wednesday, 19 August 2009 after a surprise drop in crude inventories, which sent oil prices and energy stocks soaring. The Dow Jones industrials gained 61.22 points, or 0.7%, to 9,279.16. The S&P 500 index rose 6.79 points, or 0.7%, to 996.46. The Nasdaq Composite Index added 13.32 points, or 0.7%, to 1,969.24.

The data on New York-based Conference Board's index - an index of US leading economic indicators is due to be released in the US today, 20 August 2009. Survey estimates range from gains of 0.1% to 1%. An increase would mark the first time the index has climbed for four straight months since 2004.

Meanwhile, the US Labor Department will also announce the weekly jobless claims. Both these data may signal the deepest recession since the Great Depression is nearing an end.

US crude for September 2009 delivery was down 14 cents at $72.28 a barrel today, 20 August 2009. It had advanced $3.23 a barrel or 4.7% to $72.42 on Wednesday, 19 August 2009 buoyed by industry data showing a steep drop in crude imports and stockpiles in top consumer the United States.

US crude stockpiles plunged by a whopping 8.4 million barrels in the week to 14 August 2009, way ahead of analysts' forecasts for a 1.3 million barrels as imports dropped to the lowest level since September 2008 and refiners hiked runs, data from the US Energy Information Administration showed on Wednesday, 19 August 2009.

Trading in US index futures showed the Dow could rise 23 points at the opening bell on Thursday, 20 August 2009.

Closer home, India has attracted foreign direct investment (FDI) worth $2.58 billion in June 2009, an 8% increase over the same month last year, data showed on Wednesday, 19 August 2009. FDI inflow in April and May 2009 were $2.34 and $2.2 billion respectively, as compared with $3.74 and $3.9 billion in the corresponding period last year.

The BSE 30-share Sensex gained 202.68 points or 1.37% to 15,012.32. The barometer index advanced 335.36 points at the day's high of 15,145 in mid-afternoon trade. The Sensex gained 118.54 points at the day's low of 14,928.18 in early trade.

The S&P CNX Nifty was up 59.35 points or 1.35% to 4453.45. Nifty August 2009 futures were at 4449.90 at a discount of 3.55 points as compared to the spot closing.

Equities have risen sharply this year on the back of heavy buying by foreign funds. The Sensex is up 5365.01 points or 55.61% in calendar year 2009 as on 20 August 2009. From a 3-year closing low of 8,160.40 on 9 March 2009, the Sensex is up 6851.92 points or 83.96% as on 20 August 2009. FII inflow in calendar year 2009 totaled Rs 36633.10 crore (till 18 August 2009).

Turnover on the bourses was lower today, 20 August 2009. The BSE clocked a turnover of Rs 3870 crore, lower than Rs 5320 crore on Wednesday, 19 August 2009. Turnover on NSE's futures & options (F&O) segment slipped sharply to Rs 61,882.96 crore, from Rs 82,896.50 crore on Wednesday, 19 August 2009.

The market breadth, indicating the overall health of the market, was strong. On BSE, 1524 shares advanced as compared with 1171 that declined. A total of 77 shares remained unchanged.

The BSE Mid-Cap index was up 0.8% to 5,477.39 and the BSE Small-Cap index rose 0.82% to 6,360.27. However, both the indices underperformed the Sensex.

The the BSE Consumer Durables index (up 1.66%), the BSE Bankex (up 1.85%), the BSE IT index (up 1.58%), the BSE Metal index (up 1.39%), the BSE Auto index (up 2.60%), the BSE Power index (up 1.67%), the BSE Realty index (up 1.55%), outperformed the Sensex.

The BSE Teck index (up 1.05%), the BSE Healthcare index (up 0.29%), the BSE Capital Goods index (up 1%), the BSE FMCG index (up 0.55%), the BSE Oil & Gas index (up 0.99%), the BSE PSU index (up 1.31%), underperformed the Sensex.

Among the 30-member Sensex pack, 27 advanced while only 3 of them slipped. All the top three gainers from the Sensex pack were from the auto sector.

Auto stocks rallied after cumulative monsoon rainfall deficit in the country reduced. Auto companies derive a substantial revenue from rural India. India's largest tractor marker by sales Mahindra & Mahindra advanced 4.89% to Rs 777 and was the top gainer from the Sensex pack.

India's largest car market by sales Maruti Suzuki India shot up 4.83%. India's largest bike marker by sales Hero Honda Motors gained 4.26%. However, India's largest truck marker by sales Tata Motors slipped 0.51% to Rs 427.40 on profit booking after striking day's high of Rs 442.

India's largest private sector firm by market capitalisation and oil refiner Reliance Industries (RIL) was up 0.57% to Rs 1894.20. The stock came off day's high of Rs 1925.90. A high-powered panel set up by the Prime Minister to monitor the government's stand in the Ambani gas tussle reportedly met on Wednesday. The agenda of the ministrial panel meet is to arrive at a uniform stand in the Reliance Industries and Reliance Natural Resources (RIL-RNRL) case and the NTPC-RIL case.

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.

Oil exploration stocks rose following a nearly 5% rise in crude oil on Wednesday, 19 August 2009. India's largest state-run oil exploration firm by sales ONGC advanced 1.58%. India's largest private sector oil exploration firm by sales Cairn India moved up 2.86%. Rise in crude oil prices would result in higher realizations from crude sales for oil exploration firms.

Shares of public sector oil marketing companies (OMC's) fell as higher crude oil price will results in under recoveries on fuel sales. BPCL (down 0.89%), HPCL (down 0.32%), declined. However, Indian Oil Corporation (IOC) rose 0.59%.

State-run oil marketing companies have to sell oil products at government-mandated prices. The refiners are partly compensated for the losses by the government through special oil bonds and partly by upstream companies like ONGC and GAIL (India) through discounts on crude oil.

Airline stocks rose on reports the government is looking at allowing them to import jet fuel on their own. King Fisher Airlines (up 1.44%) and SpiceJet (up 4.20%) rose. However, Jet Airways was down marginally by 0.10%

Import of jet fuel under the open general licence (OGL) would allow airlines to avoid paying high sales tax levied by state governments varying from 12% to 23% report said.

Bank stocks rose. India's biggest bank in terms of branch network State Bank of India (SBI) vaulted 3.60%. O P Bhatt, Managing Director of State Bank of India said on Wednesday 19 August 2009, the bank hopes to maintain 40% growth in net profit in the year ending March 2010. He also ruled out rights issue by the bank in the near future.

Bhatt added that he does not see any possibility of interest rates going up till October or November. In fact, interest rates may decline by 25-50 basis points between now and the busy Diwali season, Bhatt added.

India's largest private sector bank by net profit ICICI Bank rose 0.32% to Rs 719. But the stock came off the day's high of Rs 737.

India's second largest private sector bank in terms of operating income HDFC Bank rose 2.34%.

India's largest mortgage lender by total income Housing Development Finance Corporation was up 1.10%. After trading hours, HDFC announced the pricing and terms of a simultaneous issue of equity warrants and non-convertible debentures to qualified institutional buyers. HDFC is raising Rs 4000 crore from the issue.

HDFC said each warrant is priced at Rs 275, with a right exercisable by the warrant holder to exchange each warrant with one equity share of face value of Rs 10 each, any time before the expiry of a period of 3 years from the date of its allotment, at a warrant exercise price of Rs 3,000 per equity share. The issue price of Rs 275 per warrant is neither adjustable with the warrant exercise price nor refundable by the company.

Metal shares gained on bargain hunting after a recent correction in prices. Tata Steel (up 1.64%), Steel Authority of India (up 0.94%), Hindustan Zinc (up 1.06%), and JSW Steel (up 1.24%), rose. LMEX, a gauge of six metals traded on the London Metal Exchange, declined 1.48% on Wednesday, 19 August 2009.

India's largest copper producer Sterlite Industries rose 1.15% to Rs 617.55, recovering from a low of Rs 601 hit in early trade. Sterlite has hiked its bid for acquiring bankrupt US copper miner Asarco.

Sterlite has offered $2.2 billion to Asarco matching its bid with rival Grupo Mexico. The company made this announcement before market hours today, 20 August 2009. This is for the second time in less than 10 days that Sterlite has increased the cash component for the bankrupt US miner.

IT stocks rose on reports Bombardier, the world's third biggest aircraft maker, has invited tech vendors to bid for an outsourcing contract potentially worth up to $200 million over next few years. Overnight gains in American depository receipts (ADR) also aided early gains. India's second largest IT firm by sales Infosys rose 2.22% after its ADR rose 0.42%. As per reports the company has bid for at least 10 large government projects as part of a drive to lower its dependence on the US market.

India's third largest IT exporter by sales Wipro rose 2.30% after its ADR rose 0.54%. India's largest IT exporter by sales TCS gained 0.20%.

Second line software stocks also joined the rally on momentum buying. Rolta India (up 0.28%), Mastek (up 3.86%), Patni Computers (up 0.43%), Polaris (up 1.39%), Tech Mahindra (up 2.06%), and 3i Infotech (up 8.45%), rose.

Allied Digital Services rose 0.46% after the company said its board will meet on 28 August 2009 to consider stock split. The company announced the board meet during trading hours today, 20 August 2009.

India's largest engineering and construction firm by sales Larsen & Toubro (L&T) ended almost unchanged at Rs 1482. But the stock came off day's high of Rs 1518 after the global rating agency Moody's cut its rating outlook on the company to negative from stable. Moody's said outlook change on Larsen & Toubro (L&T)'s BAA2 rating reflects increase in consolidated debt.

India's largest cellular services provider by sales Bharat Airtel slipped 1.41% to Rs 399, off day's high of Rs 411. It was the top loser from the Sensex pack. Bharti Airtel and South Africa's MTN Group have extended until 30 September 2009 their exclusive talks aimed at merging their operations to create the world's third-largest mobile operator, Bharti said during trading hours today, 20 August 2009.

The two companies - Bharti and MTN said in separate but similar statements that discussions continued to progress satisfactorily, though no decision had yet been taken to acquire any shares or implement the potential transaction.

India's second largest cellular services provider by sales Reliance Communications (RCom) jumped 2.25% on reports it is in talks with Mobile Telecommunications Company K.S.C., known as Zain, for a potential acquisition of its African operations. Zain is selling Celtel, the division that is present in 13 nations in the continent, valued at $10 billion. Zain acquired Celtel in 2005 for $3.36 billion.

Construction, capital goods and cement shares rose as higher government spending on infrastructure sector in 2009-2010 to a 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 (up 0.38%), Hindustan Construction Company (up 3.22%), Punj Lloyd (up 2.18%), Nagarjuna Construction Company (up 1.97%), gained.

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

Other capital goods stocks, Bharat Heavy Electricals (up 1.61%), BEML (up 0.12%), ABB (up 4.17%), Siemens (up 3.58%), advanced.

From the cement pack, UltraTech Cement (up 1.31%), India Cement (up 0.83%), Grasim Industries (up 2.62%), ACC (up 0.06%), and Ambuja Cements (up 2.64%), rose

Rate sensitive realty shares rose on reports prominent realty firms Lodha Group and Oberoi Construction have filed a draft red herring prospectus (DRHP) with the Securities & Exchange Board of India (Sebi) for raising funds through an initial public offer (IPO). Unitech (up 2.55%), DLF (up 0.78%), Omaxe (up 1.80%), Indiabulls Real Estate (up 2.49%), HDIL (up 0.28%), gained.

India's largest pharma company by market capitalisation Sun Pharmaceuticals gained 1.44% on reports of a faourable court ruling. As a result, the company will now be able to launch a low cost version of the drug of a block buster drug in the US by November 2010.

Unichem Laboratories rose 1.12% on reports the company's overseas unit Unichem Pharma has received an approval from US Food & Drug Administration (US FDA) for its abbreviated new drug application (ANDA) for Bisoprolol Fumarate tablets, a widely subscribed molecule in the anti-hypertensive category.

Shares of Adani Power settled at Rs 100.05, a marginal premium over initial offer price of Rs 100 per share. The counter saw high volume of 9.64 crore shares on BSE. The stock debuted at Rs 105, a premium of 5% over its issue price. The stock moved in a band of Rs 98.50 and Rs 107.90 so far in the day.

Adani Power was the top traded counter on BSE with turnover of Rs 976.50 crore followed by Reliance Industries (Rs 117.13 crore), Aban Offshore (Rs 105.15 crore), IFCI (Rs 96.92 crore) and Tata Steel (Rs 96.85 crore).

IFCI clocked the highest volume of 1.85 crore shares on BSE. Suzlon Energy (95.66 lakh shares), Unitech (90.78 lakh shares), Ispat Industries (88.47 lakh shares), and GVK Power & Infrastructure (42.48 lakh shares) were the other volume toppers in that order.

Gujarat NRE Coke rose 5.34%. The largest independent producer of low ash metallurgical coke is slated to more than double its total annual mining capacity to 2.5 million tonnes, as per media reports. Meanwhie, it is commissioning its longwall mining at its Australian mine operated through its subsidiary called Gujarat NRE Mineral (GNML). Longwall mining is high-end mining process that increases the productivity of coal mining.

Hanung Toys & Textiles rose 4.99% after the company said its board of directors will meet on 22 August 2009 to consider issue of shares up to $50 million. The company announced the fund raising plans after market hours on Wednesday, 19 August 2009.