Sensex, Nifty settle at 15-month high as global stocks rally

Strong response to the initial public offer of Oil India, an improvement in business confidence of India Inc and revival of monsoon rains helped key benchmark indices extend gains for the second day in a row. Firm global stocks aided the rally.

The Sensex surged 327.20 points or 2.09% to 16,016.32, up 223.05 points from the day's low and off just 19.18 points from the day's high. The Sensex surged past the psychological 16,000 mark in late trade. Both the frontline indices - the BSE Sensex and the 50-unit S&P CNX Nifty settled at their highest level in more than 15 months. Global stocks surged after the G20 leaders pledged to maintain stimulus measures.

The market breadth indicating the overall health of the market was strong. Realty, banking and metal stocks were at the forefront of today's rally. The BSE FMCG index was the lone loser among the sectoral indices on BSE. In stock-specific activity Tata Motors surged almost 13%. ICICI Bank jumped around 7% and Sterlite Industries gained around 6.5%

The Oil India IPO which opened for bidding today, 7 September 2009, was subscribed 1.27 times as at 16:00 IST, data on the National Stock Exchange showed. The Oil India initial public offer (IPO) will close on 10 September 2009. OIL, which produces 3.5 million tonnes of oil annually, will be listed on the bourses on 29 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 response to Oil India IPO is being closely watched after a tepid secondary market debut of power sector firms NHPC and Adani Power, recently.

Meanwhile, a survey to gauge business confidence sentiment, carried out by Federation of Indian Chambers of Commerce and Industry (Ficci), for the month of September 2009, suggested that the confidence level of India Inc is on the rise thanks to government's fiscal stimulus measures. Eighty per cent of the companies believe that the Indian economy is on the road to recovery and expect improvement in corporate performance in the months to come.

Although, the future outlook for the Indian industry as a whole is fairly positive, 86% of the companies expressed concern over delayed monsoons. The respondents feel this can have an adverse impact on demand for industrial goods in the coming months.

Incidentally, there has been a revival in monsoon rains in the past few days. After playing truant for most of the season, the monsoon has picked up pace in the past few days thereby reducing the deficiency in cumulative rainfall in this season. The cumulative rainfall was 23% below normal in the week ended 2 September 2009, an improvement from 25% in the week ended 26 August 2009 and 29% in the week ended 12 August 2009, the India Meteorological Department said on 4 September 2009.

However, a cause of concern is that reservoir levels in key reservoirs are at two-thirds of the 10-year average, and 60% of last year's levels. Because of the deficient rainfall between June and September, good water storage level in these key reservoirs, which makes up one-third of the country's total water storage, are crucial to a good winter crop. Two-third of India's population lives in villages and 60% of the farm land depends on the annual rains.

A Japanese brokerage firm in a research note said India's economic growth could slow to 6% in 2009-10 from its earlier estimate of 6.3%, dragged by contraction in agricultural growth. The brokerage cut its 2009-10 agriculture gross domestic product (GDP) growth forecast to 2.2% from 3.5% due to deficient monsoon rains.

An Australian based brokerage has lowered India's economic growth target to 6.5% in the year ending March 2010 from the 7% forecast earlier, as weak monsoon rainfall affects the agriculture sector. However the brokerage firm raised its estimate for gross domestic product expansion for the following year to 8% from 7.5%.

European markets extended early gains led by financial shares. Key benchmark indices in UK, Germany and France were up by between 1.44% and 2.66%.

Asian markets were trading firm today, 7 September 2009 led by Chinese shares on hopes that Beijing will continue to use policy to support asset prices. Key benchmark indices in Singapore, South Korea, Japan, China, Hong Kong, and Taiwan rose by between 0.79% and 1.53%. Indian indices outperformed their Asian counterparts today.

Among the factors cited by analysts for a broad-rise in Asian equity prices were a pledge by G20 leaders over the weekend to keep stimulus measures in place for longer and draft rules from China allowing more foreign portfolio investment.

The world's wealthiest nations at the G20 meeting in London at the weekend have pledged a number of measures to maintain stimulus measures to boost the global economy. In a meeting held on Saturday, 5 September 2009, the finance ministers warned that the fledgling recovery was by no means assured.

US markets surged on Friday, 4 September 2009 led by technology stocks following encouraging comments from Intel's CEO, offsetting a mixed jobs report. The Dow Jones Industrial Average jumped 96.66 points, or 1.03%, to 9,441.27. The Standard & Poor's 500 Index rose 13.16 points, or 1.31%, to 1,016.40. The Nasdaq Composite index soared 35.58 points, or 1.79%, to 2,018.78

In economic data, the unemployment rate jumped to a 26-year high of 9.7% even as layoffs seemed to be tapering off, data released by the Labor Department on Friday, 4 September 2009 showed. The report showed that 216,000 non-farm payrolls were slashed in August 2009 that marked the lowest job loss tally in one-year.

US market remains closed on Monday, 7 September 2009 on account of the Labor Day holiday.

The BSE 30-share Sensex jumped 327.20 points or 2.09% to 16,016.32, its highest closing since 2 June 2008. The Sensex opened 104.15 points higher at 15,793.27, also the day's low. The barometer index gained 346.38 points at the day's high of 16,035.50 in late trade.

The S&P CNX Nifty rose 102.50 points or 2.19% to 4,782.90, its highest closing since 30 May 2008. The index struck an intra-day high of 4790.

Nifty September 2009 futures were at 4804.10 at a premium of 21.2 points compared to the spot closing. Turnover in NSE's futures & options (F&O) segment declined to Rs 57,490.85 crore from Rs 70,260.73 crore on Friday, 4 September 2009.

The Sensex had jumped 290.79 points or 1.89% to 15,689.12 and the S&P CNX Nifty had risen 86.85 points or 1.89% to 4,680.40 on Friday, 4 September 2009, on upbeat global cues.

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 6369.01 points or 66.01% in calendar year 2009 as on 7 September 2009. From a 3-year closing low of 8,160.40 on 9 March 2009, the Sensex is up 7855.92 points or 96.26% as on 7 September 2009. FII inflow in calendar year 2009 totaled Rs 39368.40 crore (till 3 September 2009)

The BSE clocked a turnover of Rs 6,055 crore, higher than Rs 5,722.02 crore on Friday, 4 September 2009.

The market breadth, indicating the overall health of the market, was strong. On BSE, 2261 shares advanced as compared with 594 that declined. A total of 54 shares remained unchanged.

The BSE Mid-Cap index rose 2.31% to 5,967.77 and the BSE Small-Cap index gained 2.83% to 7,189.47. Both these indices outperformed the Sensex

The BSE Metal index (up 3.95%), the BSE Realty index (up 5.49%), the BSE PSU index (up 2.17%), the BSE Auto index (up 2.45%), the BSE Oil & Gas index (up 1.51%), the BSE Teck index (up 2.31%), the BSE Bankex (up 3.10%), BSE Consumer Durables index (up 2.70%), outperformed the Sensex.

The BSE Capital Goods index (up 1.70%), BSE FMCG index (down 0.08%), the BSE Power index (up 1.39%), BSE IT index (up 1.38%), the BSE Healthcare index (up 1.47%), underperformed the Sensex.

Among the 30-member Sensex pack, 28 advanced while only 2 of them declined.

Auto stocks rallied on revival of the monsoon rains. Auto companies derive a third of their revenues from rural sales. Expectations that the forthcoming festive season will boost auto sales aided the rally

India's largest truck marker by sales Tata Motors surged 12.95% to Rs 574 and was the top gainer from the Sensex pack. The Tata Motors ADR had risen 1.54% on 4 September 2009.

India's top small car maker by sales Maruti Suzuki rose 0.75%. India's largest motorbike maker by sales Hero Honda Motors rose 0.99%. India's second largest motorbike maker by sales Bajaj Auto jumped 3.34%

However, India's largest tractor maker by sales Mahindra & Mahindra fell 0.91% on profit booking.

India's largest dam builder by sales Jaiprakash Associates soared 6.57% after the National Stock Exchange (NSE)'s index maintenance committee at a periodic review decided to include the stock in the S&P CNX Nifty index effective from 20 October 2009. Jaiprakash Associates will replace National Aluminium Company.

Infrastructure Development Finance Corporation (IDFC) jumped 8.86%. The stock will replace Tata Communications in the S&P CNX Nifty index.

India's largest private sector firm by market capitalisation and oil refiner Reliance Industries (RIL) rose 0.89% to Rs 1998.50. The stock struck a high of Rs 2008 in intra-day trade. India's largest thermal power producer by sales NTPC on Saturday, 5 September 2009 moved the Supreme Court seeking quashing of the Bombay high court order giving permission to the Mukesh Ambani's RIL to amend its plea in its on-going dispute with the country's largest utility on the supply of gas from the Krishna-Godavari basin.

RIL had arrived at an agreement with the NTPC to supply 12 million standard cubic metres per day (mmscmd) gas at $2.34 per million British thermal unit (mmBtu) pusuant to the global competitive bidding.

However, the RIL sought to wrigle out and avoid the Gas Sale & Purchase Agreement (GSPA) on one pretext or the other, compelling NTPC to move Bombay high court for enforcement of its agreement with the contractor RIL.

Another dispute between the Mukesh Ambani promoted RIL and Anil Ambani promoted Reliance Natural Resources (RNRL) is now in the Supreme Court. The dispute between RIL and RRNL is centered around the price and supply of gas from Krishna Godawari (KG) basin operating by RIL to RNRL for the power plants of Anil Dhirubhai Ambani group. Meanwhile the NTPC-RIL case also deals with price and supply of gas to NTPC's power plants from RIL.

India's largest thermal power producer by sales NTPC rose 0.44% while RNRL rose 1.80%.

India's largest oil exploration firm by sales Oil and Natural Gas Corporation (ONGC) rose 0.87%, extending Friday's 3.09% rise. The stock rose on reports the Petroleum Ministry is considering a proposal to increase the price of natural gas sold under a regulated regime to $2.6 for every million British thermal unit (mBtu) from $1.8/mBtu, currently. ONGC and Oil India (OIL) sell gas at a government controlled price from blocks awarded to them on a nomination basis.

Meanwhile ONGC Petro-additions, a special purpose vehicle (SPV) of ONGC is reportedly considering an initial public offer (IPO) by 2011. ONGC plans to dilute 25 % of equity for an overseas partner, to be chosen by the end of this month, reports added.

The SPV was established by ONGC to set up a Rs 124400 crore petrochemical complex in Gujarat, expected to go on stream by December 2012.

State run oil marketing stocks gained after crude oil prices slipped. BPCL (up 5.44%), and HPCL (up 6.80%), gained.

Indian Oil Corporation jumped 9.90% after the company scheduled a board meet on 13 September 2009 to consider bonus issue. The announcement was made after market hours on Friday, 4 September 2009.

Lower oil prices will reduce underrecoveries of state-run oil firms on domestic sale of petrol, diesel, LPG and kerosene at a controlled price.

Metal stocks gained after the world's largest steel marker ArcelorMittal agreed to become a co-promoter of Uttam Galva Steel. Hopes of higher demand from China, the world's largest consumer of metal products, also drove metal counters higher.

Uttam Galva Steels was locked at upper limit of 10% of Rs 125.05 on BSE, a lifetime high for the counter

India's largest private sector steel marker by sales Tata Steel gained 2.43% after the company today, 7 September 2009 said steel sales at its Indian operations rose 25% to 492,000 tonnes in August 2009 over August 2008. Saleable steel production rose 14% to 526,000 tonnes while sales of long products jumped 81%.

Domestic operations contribute about 25% of the group's total annual global capacity, including Europe's second-largest steelmaker Corus.

Other steel firms gained on momentum buying on hopes of further consolidation in the sector through merger & acquisition activity after a deal between Uttam Galva Steel and ArcelorMittal, the world's largest steel.

Mukand (up 19.96%), National Steel & Agro Industries (up 9.94%), Shah Alloys (up 9.86%), Raipur Alloys (up 6.80%), Visa Steel (up 6.07%), and Lloyds Steel (up 4.89%), surged.

Bhushan Steel soared 15.27% on reports the company's unit Bhushan Steel (Australia) acquired a 60% stake in Australian exploration company, Bowen Energy, which has large prospecting license for thermal and coking coal.

JSW Steel gained 4.77%. The company reported 53% rise in crude steel production to 5.21 lakh tonne units in August 2009 over August 2008. The company made this announcement during trading hours on 4 September 2009.

Steel Authority of India rose 1.55%. The company reported a 20% rise in domestic sales to 1.1 million tonnes in August 2009 over August 2008, on the back of a 30% jump in sale of special steels. The company made this announcement during trading hours on 4 September 2009.

India's largest non-ferrous metals producer by sales Sterlite Industries gained 6.05% mirroring a 5.62% surge in its American depository receipt (ADR) on Friday, 4 September 2009.

Hindalco (up 3.04%), Sesa Goa (up 0.99%), Jindal Saw (up 2.63%), Hindustan Zinc (up 2.3.%), gained from the metal pack.

India's largest bank by net profit and branch network State Bank of India gained 2.69%. The bank has reduced rates on its flagship deposit scheme, the 1000-day deposit, by 25 basis points to 7% with effect from 8 September 2009. Now deposit of more than two years but less than three years will be clubbed together with an interest rate of 7%. Earlier deposits for tenures of two years but less than 1,000 days had an interest rate of 7% while the 1000-day deposit had an interest rate of 7.25%.

India's largest private sector bank by net profit ICICI Bank rose 6.85% following a 2.95% surge in its ADR on 4 September 2009.

India's largest mortgage financier by total income Housing Development Finance Corporation (HDFC) rose 2.44%. As per reports, HDFC's real estate fund HDFC Property Ventures and Singapore's Temasek are holding talks with Bengaluru-based Prestige Group to invest around Rs 625 crore or $130 million, as the real estate companies continue to tap private equity funds to meet their financial requirements.

India's largest engineering & construction company by sales Larsen & Toubro rose 1.71% on reports the company is in discussions to buy a thermal coal mine in Australia for about $300 million. Meanwhile a foreign brokerage has raised its rating on the stock to 'buy' from 'reduce', by saying order inflows have revived substantially.

India's largest power equipment maker by sales Bharat Heavy Electricals rose 0.28%. The company may name an overseas partner by October for a venture to build atomic plants in the country.

Diamond Power Infrastructure was locked at upper limit of 5% after Reliance Infrastructure Fund acquired 4.85 lakh shares of the company at Rs 197.01 each in a block deal on BSE on Friday, 4 September 2009.

Realty stocks rose on recent reports prices in key regions like New Delhi-NCR (National Capital Region) and Mumbai have moved up 10-15% on gradual return of residential property buyers. DLF (up 5.35%), Unitech (up 7.77%), Phoenix Mills (up 11.99%), Indiabulls Real Estate (up 4.16%), and HDIL (up 6.33%), gained.

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.

Pratibha Industries surged 2.77% after the company secured a contract worth Rs 144.69 crore. The company announced the new order win before market hours today, 7 September 2009.

Petron Engineering Construction galloped 20% after the company bagged an order worth Rs 37.45 crore. The company announced new order win during trading hours today, 7 September 2009.

KNR Constructions was locked at 5% upper limit after the company bagged an order worth Rs 231.28 crore. The company announced new order win during trading hours today, 7 September 2009.

IT pivotals gained tracking firm ADRs. India's second largest software services exporter by sales Infosys was up 1.07% tracking a 1.29% rise in its ADR on 4 September 2009. India's third largest software services exporter by sales Wipro rose 0.36% following a 1.35% rise in its ADR on 4 September 2009.

India's largest software services exporter by sales Tata Consultancy Services advanced 3.62%. The company's Chief Executive S. Ramadorai today, 7 September 2009, said the company is seeing stability on the ground and the company's demand pipeline is good.

India's second largest mobile services provider by sales Reliance Communications jumped 5.97% on follow-up buying. The stock has been on a roll recently on reports its telecom tower unit may revive a plan to raise funds through an initial public offer.

India's largest mobile services provider by sales Bharti Airtel rose 4.06%. Bharti and South African telecom operator MTN have been in negotiations since 25 May 2009 on a $23 billion cash and share-swap deal aimed at an eventual full merger. The deadline for the talks has been extended twice, most recently the deadline was put back another month to 30 September 2009.

India's largest cigarette marker by sales ITC lost 1.07% to Rs 230.65 as investors shifted their exposure from the so-called defensive sector. It was the top loser from the Sensex pack.

Unitech was the top traded counter on the BSE with turnover of Rs 269.80 crore followed by Tata Motors (Rs 176.43 crore), IFCI (Rs 162.33 crore), Jindal Steel & Power (Rs 158.29 crore) and Suzlon Energy (Rs 128.10 crore).

IFCI clocked the highest volume of 2.73 crore shares on BSE. Ispat Industries (2.56 crore shares), Unitech (2.40 crore shares), Suzlon Energy (1.25 crore shares) and Reliance Natural Resources (97.32 lakh shares), were the other volume toppers in that order.

Among the gainers from small and mid-cap stocks, Kirloskar Brothers (up 20%), Zen Technologies (up 20%), Sel manufacturing (up 20%), Tritron valves (up 20%), and ABC India (up 19.95%), rose sharply.

Kailash Ficom (down 9.85%), Alfred Herbert (down 6.79%), Excel Infoways (down 6.36%), and Greenply Industries (down 5.47%), declined

REI Agro galloped 9.97% after the company said its board will meet on 9 September 2009 to consider rights issue. The company announced the board meet before market hours today, 7 September 2009.