Sensex gains 5.62% in last six days

The key benchmark indices extended gains for the sixth straight day on positive global stocks and industrial output data which came in as expected. The BSE 30-share Sensex rose 47.44 points or 0.29%, off close to 100 points from the day's high and up close to 135 points from the day's low. Realty, auto and FMCG stocks fell. Banking and IT stocks rose. Index heavyweight Reliance Industries recovered in volatile trade. The market breadth was weak.

The market was volatile. It pared gains after firm start triggered by strong global cues. Market later hovered between positive and negative terrain but closed in the green. The similar trend was witnessed on Thursday.

India's industrial output data for the month of July 2009 showed growth of 6.8% compared with 6.9% growth in the same month last year data showed at 12:00 IST today. The industrial output for the month of June 2009 revised higher to 8.2%.

The Indian economy is unlikely to revert to its trend growth rate soon as recession in advanced economies would eat into global growth and world trade, Reserve Bank of India (RBI) deputy governor Usha Thorat said on Friday.

India's industrial growth will continue to show rising momentum, Finance Secretary Ashok Chawla said today.

The weather office said on Thursday rainfall was 21 % above average in the week to 9 September 2009 continuing the upturn since mid-August but total seasonal rainfall was a fifth short of normal since the season began with the driest June in eight decades. More than two-thirds of the people live in villages and 60 % of the farm land depends on the annual rains.Higher rainfall in the past week has helped India's 81 biggest reservoirs fill up much faster than normal for this time of year. Reservoirs are important for hydropower, which accounts for a quarter of India's generation capacity. They also provide water to irrigate winter crops.

The wholesale price index (WPI) fell 0.12% in the year through 29 August 2009, lower than an annual decline of 0.21% in the previous week, data released by the government showed on Thursday. The food article index surged 14.8%.

Analysts are concerned that a sharp surge in food prices in the past few days due to scanty rains may stoke inflationary pressures in the economy. Interest rates could rise on higher inflation which in turn may impact a nascent economic recovery and corporate profits.

Meanwhile, foreign direct investment (FDI) flows into India in July 2009 were up 56 % from the same month in 2008. FDI flows into India were $3.5 billion in July, up from $2.25 billion a year earlier, Trade Minister Anand Sharma said on Thursday.

Liquidity continues to support share prices and oversubscription to the Oil India initial public offering is a testimony to that. The Oil India IPO which opened for bidding on 7 September 2009, was subscribed 30.82 times. The issue was closed on 10 September 2009. The government has fixed Rs 950-1,050 per share price band for the initial public offering of Oil India (OIL), the second state-run firm to hit the market this year after NHPC, and will raise up to Rs 2,777 crore.

The strong response to Oil India IPO was despite a muted debut of another state-run firm NHPC on the secondary markets early this month.

European equities advanced for a sixth straight session to hit a new 11-month high on Friday, with financial shares extending recent gains and energy stocks following stronger crude oil prices. The key benchmark indices in France, Germany and UK were up by between 0.55% to 0.75%.

Asian shares edged up on Friday as strong Chinese economic data supported regional recovery hopes. The key benchmark indices in Hong Kong, South Korea, Taiwan rose by between 0.07% to 0.44%.

China's Shanghai Composite rose 2.22%. China's industrial production grew at a faster pace in August, signaling a strengthening recovery in the world's third-biggest economy. Output gained 12.3 % from a year earlier, after climbing 10.8 % in July, the statistics bureau said in Beijing today

But, Japan's Nikkei fell 0.66%. Japan's economy unexpectedly grew less than initially estimated in the second quarter. Gross domestic product expanded at an annual 2.3 % pace in the three months ended 30 June 2009, slower than the 3.7 % reported as per preliminary estimate, the Cabinet Office said today in Tokyo.

Trading in US index futures indicated Dow could open flat at the opening bell today, 11 September 2009.

The US markets touched fresh 2009 highs on Thursday, 10 September 2009 after jobless claims slid to the lowest level since July. The Dow added 80.26 points, or 0.8%, to 9,627.48. The S&P 500 index rose 10.77 points, or 1%, to 1,044.14. The Nasdaq Composite Index rose 23.63 points, or 1.2%, to 2,084.02.

From the economic data front initial claims for unemployment fell more than expected to 5,50,000 last week while continuing claims also dropped more than estimates to 6.09 million. Meanwhile, trade deficit expanded for the second straight month to a greater-than-expected $ 32 billion in July 2009.

The BSE 30-share Sensex rose 47.44 points or 0.29% to 16,264.30. The Sensex rose 121.12 points the day's high of 16,337.98 in early trade. The barometer index fell 86.54 points at the day's low of 16,130.32 in late trade.

The S&P CNX Nifty rose 10.15 points or 0.21% to 4829.55. Nifty September 2009 futures were at 4847.60 at a premium of 18.05 points as compared to the spot closing of 4829.55. Turnover in NSE's futures & options (F&O) segment was Rs 61,648.13 crore, much lower than Rs 75,583.39 crore on Thursday, 10 September 2009.

BSE clocked a turnover of Rs 5678 crore lower than Rs 6720.80 crore on Thursday, 10 September 2009.

The market breadth indicating the overall health of the market, turned weak from strong breadth in early trade. On BSE, 1069 shares rose as compared with 1713 that declined. A total of 80 shares remained unchanged.

Among the 30-member Sensex pack, 10 rose while the rest declined.

The Sensex has jumped 865.97 points or 5.62% in six trading days to 16,264.30 on 11 September 2009 from a recent low of 15,398.33 on 3 September 2009 as a revival of monsoon rains, strong response to the initial public offer of Oil India and firm global stocks boosted sentiments.

Stocks have risen sharply this year on increased global risk appetite triggered by hopes of a recovery in the global economy after a setback from a financial sector crisis. The Sensex is up 6616.99 points or 68.58% in calendar year 2009 as on 11 September 2009. From a 3-year closing low of 8,160.40 on 9 March 2009, the Sensex is up 8103.90 points or 99.3% as on 11 September 2009. FII inflow in calendar year 2009 totaled Rs 42,370.60 crore (till 10 September 2009).

Coming back to today's trade, the BSE Mid-Cap index fell 0.13% and the BSE Small-Cap index fell 0.38%. Both the indices underperformed Sensex.

The BSE Consumer Durables index (up 1.79%), the BSE PSU index (up 1.52%), the BSE Bankex (up 1.47%), the BSE IT index (up 1.11%), the BSE Teck index (up 0.68%), the BSE Capital Goods index (up 0.6%), outperformed the Sensex.

The BSE Realty index (down 1.63%), the BSE FMCG index (down 1.18%), the BSE Oil & Gas index (down 0.71%), the BSE Auto index (down 0.6%), the BSE Metal index (down 0.38%), the BSE Power index (down 0.31%), the BSE Healthcare index (don 0.26%), underperformed the Sensex.

India's largest private sector firm by market capitalisation and oil refiner Reliance Industries (RIL) fell 0.38% to Rs 2140.95 on profit taking after recent surge. The stock came off the day's high of Rs 2170. Anil Ambani group firm Reliance Natural Resources (RNRL) on Wednesday told the Supreme Court that the government has no role to play either in the utilisation or the fixation of gas price as per its contract with Mukesh-led RIL.

The two sides RIL and RNRL had approached Supreme Court challenging a decision by the Bombay High Court on 15 June 2009, which said RIL should provide 28 million cubic metres of gas per day to RNRL at $ 2.34 per mmBtu and both the parties should sign a necessary agreement for the same within a month. RIL, however, is pleading that it was only a contractor for the gas from the Krishna-Godavari basin's D6 block and did not have the power to fix the price, while the government has also moved a special leave petition in the case asserting its right on pricing and distribution of natural gas. The apex court has decided to commence hearing on this matter on 20 October.

A rally in crude oil failed to lift oil exploration counters. India's biggest state-run oil exploration firm by revenue Oil & Natural Gas Corporation (ONGC) fell 0.35%. Cairn India fell 0.19%. Rise in crude oil prices would result in higher realizations from crude sales for oil exploration firms.

Crude oil was flat after early gains as industrial production in China, the world's second-biggest energy user, grew at a faster pace than forecast. Crude oil for October delivery was flat at $ 71.91 a barrel on the New York Mercantile Exchange.

IT stocks rose on hopes of faster recovery in US economy. US is the biggest market for Indian IT companies. India's second largest software services exporter by sales Infosys rose 1.38% as its ADR rose 0.77% on Thursday, 10 September 2009. India's third largest software services exporter by sales Wipro rose 1.53% even on 0.3% fall in its ADR on 10 September 2009.

India's largest software services exporter by sales Tata Consultancy Services rose 0.58%. TCS's Chief Executive S. Ramadorai on 7 September 2009 said TCS is seeing stability on the ground and the company's demand pipeline is good.

Realty stocks fell on profit taking after recent surge. DLF, Unitech, , Indiabulls Real Estate, Ackruti City fell by between 1.07% to 2.47%.

The stocks surged recently triggered by reports prices of residential units in key regions like New Delhi-NCR (National Capital Region) and Mumbai have risen 10-15% on gradual return of residential property buyers.

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

India's largest copper maker by sales Sterlite Industries fell 2.71% after company on Friday said it had raised its open offer price for bankrupt U.S. copper miner Asarco by a fifth to $2.565 billion.Sterlite, a unit of India-focused mining company Vedanta Resources, has been facing off with Mexican miner Grupo Mexico for the assets of Asarco, which has been under bankruptcy protection since 2005.The stock was the major loser from the Sensex pack.

But other metal stocks rose hopes of strong domestic demand. Hindalco Industries, National Aluminum Company, Hindustan Zinc, Steel Authority of India rose by between 0.11% to 5.98%.

Some FMCG pivotals fell on concerns over scanty rains so far this year. FMCG firms derive substantial revenue from the rural sector . Marico , REI Agro, Dabur India, Tata Tea, Nestle India, ITC, Hindustan Unilever fell by between 0.37% to 3.18%.

Auto stocks fell on profit taking. India's top small car maker by sales Maruti Suzuki fell 1.56%.

Two-wheeler makers were mixed. India's largest bike maker by sales Hero Honda Motors fell 1.53%. India's second largest bike maker by sales Bajaj Auto rose 3.21%.

India's largest truck maker by sales Tata Motors fell 2.26%.

India's largest tractor maker by sales Mahindra & Mahindra fell 0.21%. The president of company's two-wheeler business Anoop Mathur said on Thursday, 10 September 2009 at the launch of two new scooters that Mahindra & Mahindra (M&M) expects to sell 100,000 two-wheelers in the next 18 months, Mahindra entered the two-wheeler segment with the acquisition of Kinetic Motor last year.

Seperately, some reports suggested that M&M is considering a greenfield expansion to ramp up its production capacity for two-wheelers. It is looking at tax-free states such as Himachal Pradesh and Uttarakhand.

Car sales rose 26% to 120,669 units in August 2009 over August 2008 boosted by new launches and availability of cheaper loans, data released by the industry body Society of Indian Automobile Manufacturers on 8 September 2009, showed. Sales of trucks and buses rose 18.5% to 40,624 units and motorcycle sales rose 26% to 611,173 units.

Banking shares rose on hopes a recovery in the economy will boost lending growth. India's largest private sector bank by net profit ICICI Bank rose 2.47%. The bank's managing director Chanda Kochhar said on 8 September 2009 credit growth in India is likely to pick up in the second half of this year.

India's largest bank by net profit and branch network State Bank of India rose 2.1%. Chairman O.P. Bhatt on 8 September 2009 said the bank's earnings are likely to grow 30-35% in the current quarter. SBI's retail loan growth is likely to be twice of what it was in the year-ago quarter, he said.

India's second largest private sector bank by net profit HDFC Bank rose 0.58%.

India's largest engineering and construction firm by sales Larsen & Toubro rose 1.65% after company on Thursday during market hours said it got orders worth Rs 405 crore

But other capital goods stocks fell. Praj Industries, Crompton Greaves, Siemens, Thermax, Bhel Authority of India fell by between 0.29% to 1.82%.

Construction shares fell on profit taking. IVRCL Infrastructures & Projects, Jaiprakash Associates, Gayatri Projects and Hindustan Construction Company fell by between 1.09% to 3.47%.

Higher government spending on infrastructure sector in 2009-2010 to provide a stimulus to the economy, may result in increase order flow for construction firms.

India's largest thermal power generator by sales NTPC fell 0.17% after company's chairman said late on Thursday India's government may sell up to 5% in power producer NTPC before March 2009.

Other power stocks, Reliance Infrastructure, Torrent Power, Tata Power Company, Reliance Power fell by between 0.08% to 1.12%.

Cement stocks extended Thursday's fall on reports cement makers have cut prices by Rs 3 per 50 kilogram bag in Mumbai. ACC, Grasim Industries, Ultratech Cement fell by between 0.91% to 2.13%.

Tea stocks fell on profit taking after recent gain triggered by jump in prices on the back of fall in production.

McLeod Russel, Assam Tea & Exports, Harrison Malayalam, Assam Company fell by between 0.96% to 4.41%.

Tea production in India fell by 3% to 127 million kilogram (kg) in July 2009 over July 2008 on a decline in output mainly in West Bengal, though higher realisation pushed up exports marginally, according to the Tea Board.

Sugar stocks fell on recent reports the Indian government has asked tax authorities to monitor the release of sugar stocks by mills to ensure steady prices and supplies in the festival season when demand peaks.

Shree Renuka Sugars, Balrampur Chini, Bajaj Hindustan fell by between 0.25% to 1.94%.

Cals Refineries clocked the highest volume of 9.9 crore shares on BSE. Reliance Natural Resources (1.57 crore shares), IFCI (1.54 crore shares), Suzlon Energy (1.29 crore shares) and NHPC (1.19 crore shares) were the other volume toppers in that order.

DLF clocked the highest turnover of Rs 201.02 crore on BSE. Reliance Industries (Rs 174.77 crore), Housing Development & Infrastructure (Rs 141.57 crore), Reliance Natural Resources (138.73 crore) and ICICI Bank (Rs 135.25 crore) were the other turnover toppers in that order.