Auto shares surge in choppy market surge

A tepid debut of state-run power firm NHPC pulled the market lower in what was a choppy trading session. Weak European stocks and lower US index dampened investor sentiment. The BSE 30-share Sensex fell 115.45 points or 0.74%, off close to 370 points from the day's high and up close to 75 points from the day's low. Realty, metal and capital goods stocks declined. Index heavyweight Reliance Industries and ONGC edged lower. But, auto stocks rose. The market breadth, indicating the overall health of the market, turned negative from a strong breadth earlier in the day.

Shares of state-run hydropower generator NHPC settled at Rs 36.70, a premium of 1.94% on the BSE compared with the IPO price of Rs 36 per share.

Intraday volatility on the bourses was high today. The market surged in early trade tracking gains in Asian stocks triggered by strong Chinese manufacturing sector data. The market extended gains in mid-morning trade. The market pared gains in early afternoon trade as Chinese stocks came off the day's high. The market firmed up again with the Sensex hitting a fresh intraday high in early afternoon trade.

A total reversal of the trend was witnessed as the Sensex tumbled in mid-afternoon trade on lower European stocks. The market cut losses later.

As per provisional data, foreign funds today, 1 September 2009, dumped equities worth a net Rs 635.94 crore. In contrast, domestic funds bought equities worth a net Rs 366.89 crore.

India's economic growth in the coming two quarters will be lower than in April-June 2009 quarter, Planning Commission Deputy Chairman Montek Singh Ahluwalia said on Tuesday. He expects strong recovery in growth in the March 2010 quarter. Ahluwalia said fiscal deficit is unlikely to exceed the targeted 6.8% of GDP in FY 2010. He said better management of food stocks could help stem prices.

Prime Minister Manmohan Singh today said the government is taking steps to ensure a normal winter crop and it is in a strong position to manage the consequences of drought. He said the rural jobs scheme and other schemes will help minimise the impact of drought. The Prime Minster said the country has very high food stocks. He said the country has been through a difficult year due to global downturn and poor monsoon.

Drought or drought-like conditions have been declared in 278 districts or 44% of the nation's total, as rainfall has been 25% below average so far in the four- month monsoon season that started on 1 June 2009, the farm ministry said on 27 August 2009

India's exports fell an annual 28.4% in July 2009 over July 2008 and imports fell 37.1%, data released by the government during trading hours today, 1 September 2009, showed today.

A latest survey showed India's manufacturing activity expanded at its slowest pace in five months in August 2009. The HSBC Markit Purchasing Managers' Index (PMI), based on a survey of 500 companies, fell to a five-month low of 53.2 in August 2009 from a revised reading of 55.4 in July 2009. The new orders index fell to 56.2 in August 2009, also its lowest in four months, from 60 in July 2009.

The PMI has been above 50, which separates expansion from contraction, for five months. Before that, it shrank for the five months through March 2009, hitting a trough of 44.4 in December 2008.

The plan panel today forecast a 6.3% growth in the economy in the year ending March 2010 (FY 2010) and at a faster pace in the following years. The panel expects 8% economic growth in fiscal year 2010/11 and 9% in 2011/12, it added.

The planning commission warned that wholesale price inflation could end the fiscal year above the Reserve Bank of India's forecast of 5%, as a poor monsoon drives up food prices. The warning followed the one by RBI last week when the central bank said the deficient monsoons may affect the inflation outlook more than growth prospects. In its quarterly review of the monetary policy in late July 2009, RBI had said it expects inflation to scale up to around 5% by March 2010.

India's gross domestic production (GDP) grew 6.1% in Q1 June 2009 compared with the year-earlier, figures released by the Central Statistical Organisation announced on Monday, 31 August 2009, showed. The segment grouping financing, insurance, real estate and business services led growth in GDP, gaining 8.1% on year. The category including trade, hotels, transport and communication was also up 8.1%.

The GDP growth was lower than 7.8% achieved in Q1 June 2008 but it accelerated from the 5.8% expansion in Q4 March 2009.

European shares fell on Tuesday in a choppy session, with losses in banking stocks offsetting gains in defensive drugmakers. Key benchmark indices in France, UK and Germany were down by between 0.83% to 1.4%.

Euro zone unemployment rose as expected in July 2009 to its highest since May 1999, data showed on Tuesday. The European Union's statistics office said the unemployment rate in the 16-country euro currency area climbed to 9.5% from June's 9.4%, in line with market consensus.

Asian stocks rose today as China's manufacturing expanded at the fastest pace in 16 months in August 2009, two surveys showed.

China's Shanghai Composite Index pared intraday gains to end 0.6% higher. The index had tumbled nearly 7% on Monday. The official Purchasing Managers' Index (PMI) rose to a seasonally adjusted 54 from 53.3 in July 2009, the Federation of Logistics and Purchasing said. The HSBC PMI, previously released by CLSA Asia-Pacific Markets, showed an overall increase to 55.1 from 52.8 in July.

Key benchmark indices in Hong Kong, Japan, South Korea, Singapore and Taiwan were up by between 0.13% to 2.84%.

US futures revered early gains. Trading in US index futures indicated Dow could fall 52 points at the opening bell on Tuesday, 1 September 2009.

US markets ended lower on Monday, 31 August 2009 as a sharp drop in Chinese equities added to concerns about the global economy's recovery. The Dow fell 47.92 points, or 0.5%, to 9,496.28. The S&P 500 index declined 8.31 points, or 0.8%, to 1,020.62 and the Nasdaq dropped 19.71 points, or 1%, to 2,009.06.

In economic news, the Chicago institute for supply management reported its gauge of business activity in the Midwest region rose to 50 in August 2009 from 43.3 in July 2009, the highest reading since September 2008.

The BSE 30-share Sensex fell 115.45 points or 0.74% to 15,551.19. The Sensex rose 256.45 points at the day's high of 15923.09 in afternoon trade. The Sensex fell 191.36 points at the day's low of 15,475.28 in mid-afternoon trade.

The S&P CNX Nifty declined 36.75 points or 0.79% to 4,625.35. Nifty September 2009 futures were at 4615.50, at a discount of 9.85 points as compared to the spot closing of 4625.35. Turnover in NSE's futures & options (F&O) segment surged to Rs 74,486.28 crore from Rs 59,415.63 crore on Monday, 31 August 2009.

BSE clocked a turnover of Rs 6789 crore, higher than Rs 6650.52 crore on Monday, 31 August 2009.

The market breadth, indicating the overall health of the market, turned negative from a strong breadth earlier in the day. On BSE, 1656 shares declined as compared with 1144 that rose. A total of 62 shares remained unchanged.

Among the 30-member Sensex pack, 23 fell while rest rose.

The BSE Sensex has lost 371.15 points or 2.33% in last two days after gaining for seven straight days. The BSE Sensex had jumped 1112.70 points or 7.51% in seven trading sessions to settle at 15,922.34 on Friday, 28 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 5903.88 points or 61.19% in calendar year 2009 as on 1 September 2009. From a 3-year closing low of 8,160.40 on 9 March 2009, the Sensex is up 7390.79 points or 90.56% as on 1 September 2009. FII inflow in calendar year 2009 totaled Rs 40,198.50 crore (till 31 August 2009).

Coming back to today's trade, the BSE Mid-Cap index fell 1.45% and the BSE Small-Cap index fell 1.51%. Both the indices underperformed Sensex.

The BSE Auto index (up 2.45%), the BSE IT index (up 0.42%), the BSE Teck index (up 0.06%), the BSE FMCG index (down 0.22%), outperformed the Sensex.

The BSE Realty index (down 3.07%), the BSE Metal index (down 1.94%), the BSE Power index (down 1.66%), the BSE Capital Goods index (down 1.64%), the BSE Healthcare index (down 1.38%), the BSE PSU index (down 1.38%), the BSE Oil & Gas index (down 1.09%), the BSE Consumer Durables index (down 0.99%), the BSE Bankex (down 0.79%), underperformed the Sensex.

India's largest private sector firm by market capitalisation and oil refiner Reliance Industries (RIL) fell 1.1% to Rs 1982. The stock hit a high of Rs 2042 and a low of Rs 1967. The Supreme Court, from 20 October 2009 will hear the Krishna-Godavari gas dispute between Mukesh Ambani's Reliance Industries (RIL) and Anil Ambani's Reliance Natural Resources (RNRL) for its final disposal. A bench headed by Chief Justice KG Balakrishnan on Friday fixed the date for an early decision in the case.

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.

Meanwhile, the Union petroleum ministry has reportedly sought a revival of the Empowered Group of Ministers (EGoM) to allocate natural gas produced at Reliance Industries' (RIL) KG-D6 fields beyond its current capacity of 40 million metric standard cubic metres a day (mmscmd). RIL is set to ramp up production from the field to 80 mmscmd from 40 mmscmd.

India's largest oil exploration firm by market capitalisation ONGC fell 1.98%. The company on Friday, 28 August 2009, said it has discovered gas at a block in the north-eastern state of Tripura. The gas contains up to 96.3% methane. The announcement was made after trading hours on Friday.

Cairn India fell 2.64% on profit taking after recent gains after the company on Saturday, 29 August 2009 began pumping crude from its Mangala oil field in the Rajasthan block.

PSU OMCs rose on fall in crude oil prices. BPCL, HPCL and Indian Oil Corporation rose by between 0.84% to 2.05%. Lower oil prices will reduce underrecoveries at the state-run oil firms on domestic sale of petrol, diesel, LPG and kerosene at a controlled price.

On the New York Mercantile Exchange, October 2009 crude settled down $2.78, or 3.82%, at $69.96 a barrel on Monday, 31 August 2009 as a sharp fall in Chinese equities spurred worries about demand and economic recovery in commodities and global stock markets.

Metal stocks fell as London copper futures fell 2% on Tuesday as trading resume after a long weekend. Steel Authority of India, Jindal Steel & Power, National Aluminum Company, Hindalco Industries fell by between 0.22% to 2.88%.

India's largest steel maker by sales Tata Steel fell 1.61%. Tata Steel 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. Total income fell 46% to Rs 23496.21 crore in Q1 June 2009 over Q1 June 2008. The result was announced during market hours on Thursday, 27 August 2009.

India's largest copper maker by sales Sterlite Industries fell 2.88% even as a US federal judge recommended that Mexican miner Grupo Mexico be allowed to take control of US copper miner Asarco LLC, for which Sterlite had made a bid.

India's largest mobile services provider by sales Bharti Airtel fell 0.72% after South Africa's communications department said on Tuesday it supported in principle a proposed tie-up between MTN Group and Bharti Airtel, aimed at creating the world's No. 3 mobile operator.

The two companies, which have been working on a complex $23 billion cash and share swap since 25 May 2009, have extended merger talks to 30 September 2009, after previously extending discussions by a month to 31 August 2009.

India's second largest mobile services provider by sales Reliance Communication rose 1.34% on reports the firm is close to signing a tower sharing agreement with local peer Aircel, that could fetch the company revenues of about Rs 1500 crore over 10 years.

Shares of state-run hydropower generator NHPC settled at Rs 36.70 on BSE, a premium of 1.94% over the IPO price of Rs 36. The stock debuted at Rs 39, a premium of 8.33% compared with the IPO price. A huge volume of 19.35 crore shares was recorded in the stock on BSE.

NHPC chairman and managing director S.K. Garg today said the company has planned capital expenditure of Rs 4600 crore in the fiscal year to March 2010. The company has already spent about Rs 2000 crore of the planned capital expenditure so far this year on new hydropower projects

Among other power stocks, Power Grid Corporation of India, CESC, Reliance Infrastructure, Torrent Power, Reliance Power, fell by between 0.42% to 1.93%.

Tata Power Company fell 0.55% extending recent decline even as consolidated net profit rose 160.47% to Rs 572.65 crore on 15.71% rise in total income to Rs 4781.89 crore in Q1 june 2009 over Q1 June 2008. The results were announced on Friday, 28 August 2009.

India's largest power generation firm by sales NTPC fell 1.16% on profit taking after recent gains on reports the government is looking at divesting 10% stake in the largest power generation company. NTPC may also raise fresh equity to part finance its expansion programme. According to reports, NTPC is likely to hit the capital market with a follow-on public offer to raise nearly Rs 6,000 crore early next fiscal.

Auto stocks rose after India's top car maker Maruti Suzuki reported robust sales for the month of August 2009. Maruti Suzuki, India's top car maker by sales, rose 7.61% after its total vehicle sales rose 41.6% to 84,808 units in August 2009 over August 2008. The company expects its sales to rise more than 10% till October 2009, its chairman said on Friday, 28 August 2009 after growing sales at over 14% during four months to July 2009.

India's largest motorbike maker by sales Hero Honda Motors rose 1.55% as sales rose 36% in August 2009 over August 2008. TVS Motor company rose 5.17% after the two wheeler maker reported a 10.95% jump in sales to 126,842 units in August 2009 over August 2008.

India's largest truck marker by sales Tata Motors jumped 5.82% after its consolidated results showed a sequential improvement in performance of its unit Jaguar Land Rover (JLR) in Q1 June 2009 over Q4 March 2009. The results were announced in late trade on Monday, 31 August 2009.

But, Indian largest tractor maker by sales Mahindra & Mahindra slipped 1.48% on profit taking after recent sharp gains. Mahindra & Mahindra's (M&M) total vehicle sales rose 15% to 22,063 units in August 2009 over August 2008.

Realty stocks fell on profit taking after recent gains triggered by reports that the 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. Indiabulls Real Estate, DLF, Unitech, Anant Raj Industries , Omaxe fell by between 1.77% to 5.36%.

Realty market had slumped last year amid a global credit crunch and buyers fearing job losses.

Capital goods fell on profit taking after recent gains. 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.

Thermax, ABB, Siemens, Praj Industries, BEML, Punj Lloyd fell by between 2.13% to 4.02 %.

India's largest engineering and construction firm by sales Larsen & Toubro (L&T) fell 1.12%. The company's chairman A M Naik said on Friday, 28 August 2009, the company expects to make a profit of up to Rs 250 crore on its shares in outsourcer Mahindra Satyam. He added that L&T is expected to sell Mahindra Satyam shares by March next year.

L&T had built a 12% stake in Mahindra Satyam, formerly Satyam Computer, before losing out in the race for a controlling stake in the firm earlier this year to Tech Mahindra.

India's largest electric equipment maker by sales Bharat Heavy Electricals fell 2.31% on turning ex-dividend for a final dividend of Rs 8 per share.

FMCG stocks reversed early gains on concerns over scanty rains. FMCG firms derive a substantial revenue from rural India. ITC, Nestle India, United Spitrits fell by between 0.07% to 2.03%.

Cement stocks fell ahead of the release of monthly dispatchment figures for the month of August 2009 by cement makers. ACC, UltraTech Cement, Ambuja Cements, Grasim Industries, Birla Corporation fell by between 0.6% to 3.62%.

Bank stocks fell on profit taking. India's largest private sector bank by net profit ICICI Bank fell 0.64% as its American depository receipt (ADR) fell 1.61% on Monday. 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 1.59% as its ADR fell 0.74% on Monday.

India's biggest bank in terms of branch network State Bank of India (SBI) fell 0.55%. Bank's Chairman O P Bhatt said on Friday interest rates will remain stable for next six months. It is difficult to say whether rates have bottomed out, he said.

But some other PSU banks rose. India Overseas Bank, Bank of Baroda, Bank of India, Union Bank of India, rose by between 0.06% to 1.08%.

The Reserve Bank of India on Monday said commercial banks, excluding local area banks and regional rural banks, are allowed access to the interest rate futures market for hedging and trading on their own books. Trading on interest rate futures began on the National Stock Exchange on Monday.

IT stocks rose on improved economic data in the US. US is the biggest market for IT firms. India's second largest software services exporter Infosys Technologies rose 0.49% even as its ADR fell 2.26% on Monday. A foreign brokerage, last week, reduced its rating on the stock 'underweight' from 'equal-weight', saying the stock's valuation is 'rich'.

India's third largest software services exporter Wipro rose 1.5% even as its ADR fell 1.13% on Monday, 31 August 2009. India's largest software services exporter TCS was flat at Rs 526.60.

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 last week.

Shares of some tea makers rose on firm tea prices. Tea prices have risen in tea auction due to fall in production in Kenya and India. Harrison Malayalam, Warren Tea, Mcleod Russell rose by between 1.9% to 4.31%.

Sugar stocks rose as fall in production has pushed global prices to multi-year highs. Shree Renuka Sugars, Bajaj Hindustan, Dhampur Sugars and Balrampur Chini rose by between 1.57% to 4.23%.

NHPC clocked the highest volume of 19.36 crore on BSE. Suzlon Energy (2.91 crore shares), Mahindra Satyam (2.55 crore shares), Unitech (2.39 crore shares) and Ispat Industries (1.67 crore shares) were the other volume toppers in that order.

NHPC clocked the highest turnover of Rs 710.48 crore on BSE. Mahindra Satyam (Rs 314.30 crore), Suzlon Energy (Rs 277.04 crore), Unitech (Rs 248.77 crore) and Reliance Capital (Rs 214.82 crore) were the other turnover toppers in that order.