Sensex, Nifty settle at 15-month high

Key benchmark indices extended gains for the fourth straight session on a revival in monsoon and after a recent survey showed an improvement in business confidence of India Inc. An near 5% rally in index heavyweight Reliance Industries (RIL) which has a 13.18% weightage, the highest, in the Sensex, aided the upmove. The Sensex rose 59.88 points or 0.37%, up 138.78 points from the day's low and off 32.19 points from the day's high. Both the key indices - the Sensex and Nifty achieved highest closing in more than 15 months

Chinese stocks ended higher after an initial slide and European stocks reversed early fall. But most other Asian markets ended lower.

The market breadth, indicating the overall health of the market, was negative after a strong start. Metal stocks rose on sustained buying following firm global metal prices, with Hindalco surging nearly 4%. However, realty shares extended losses for the second consecutive session on profit booking.

The market was volatile. After an initial slide, the market bounced back shortly. However, the market failed to sustain higher level and moved between positive and negative zone later. A rally in index heavyweight Reliance Industries (RIL) pushed the key indices to day's high in mid-morning trade. The market pared gains in early afternoon trade on profit booking. The market once again slipped into the red in afternoon trade as European markets opened lower. Further gains in RIL lifted Sensex to a fresh intraday high in mid-afternoon trade.

European markets reversed early fall and were now trading higher. Key benchmark indices in UK, Germany and France were up by between 0.31% and 0.50%

Most Asian markets were trading lower today, 9 September 2009 led by Japanese exporters following the yen's rise against the dollar. Key benchmark indices in South Korea, Japan, Hong Kong, Taiwan, and Singapore were down by between 0.39% and 1.04%. However China's Shanghai Composite ended 0.54% higher

US markets gained on Tuesday, 8 September 2009, as crude prices surged more than $3 a barrel and gold made a run at $1,000 an ounce before pulling back. The Dow Jones Industrial Average added 56.07 points, or 0.6%, to 9,497.34. The broader S&P 500 index advanced 8.99 points, or 0.9%, to 1,025.39, and the Nasdaq Composite index rose 18.99 points, or 0.9%, to 2,037.77.

US market had re-opened after a long weekend after remaining closed on Monday, 7 September 2009 on account of the Labor Day holiday.

Warren Buffett, the billionaire investor, and Alan Greenspan, the former US Federal Reserve chairman, have both issued cautions to those who say the US economy is in the final stages of recession. Buffett in an interview with a foreign media firm said the world's largest economy was not out of problems yet. Meanwhile Greenspan, speaking via video link to a conference in Mumbai, India, said banks must raise capital levels to weather future shocks. The former US Federal Reserve chairman also warned that capital injected into the banking system could fuel inflation.

The Group of 20 finance ministers and central bankers said on 5 September 2009 that they would not remove economic stimulus until the global recovery was well entrenched.

Trading in US index futures showed the Dow could fall 6 points at the opening bell on Wednesday, 9 September 2009

Closer home, in an important development, the market regulator Securities and Exchange Board of India (Sebi) is set to tweak takeover regulations, chairman C B Bhave said on Tuesday, 8 September 2009. A committee would be formed to examine the entire takeover code fairly soon, Bhave told reporters on the sidelines of an interactive session in Bangalore. The Sebi Substantial Acquisition of Shares and Takeovers Regulation was put in place in 1997. Since then, changes have been made under the framework of these original guidelines.

Meanwhile, a plan to encourage overseas firms to raise capital in India through Indian Depository Receipts, or IDRs, as they are popularly known, appears to have hit a road block, with the revenue department not in favour of granting long-term capital gains tax benefits for such issues.

IDRs are derivative instruments like Global Depository Receipts (GDRs) and American Depository Receipts (ADRs) which have shares as the underlying asset and denominated in the local currency - the rupee. These instruments will help foreign companies raise capital in India by listing IDRs on local exchanges.

Minister of State for Finance Namo Narain Meena on Tuesday, 8 September 2009 said the government is committed to clear the Insurance Amendment Bill that seeks to bring in more foreign investments in the sector. Currently, foreign direct investment (FDI) in insurance is capped at 26% and the bill seeks to raise the FDI ceiling to 49%. Ever since the Congress-led United Progressive Alliance (UPA) government returned to power for a second term in May 2009 with a decisive mandate, investors have been betting that the government will pursue economic reforms to boost growth.

Meanwhile, Reserve Bank of India (RBI) Governor Duvvuri Subbarao said the central bank may have to reverse its easy monetary policy sooner than most other countries as inflationary pressures are mounting quickly. Subbarao added that India's strong fundamentals, which helped drive its strong economic growth before the global financial crisis, remain intact and will accelerate any future upturn.

The Reserve Bank of India (RBI) Deputy Governor K.C. Chakrabarty said on Wednesday that the central bank is not concerned about rising bond yields. He said interest rates would not come down until banks lowered their rates.

Finance Minister Pranab Mukherjee on Tuesday, 8 September 2009 said the government is constantly reviewing the economic situation to decide until when the stimulus measures need to be continued and it is not desirable to plan the exit strategy now

On Monday, 7 September 2009 the Finance Minister said that a slowdown is likely in growth rate in the second and third quarters of the current fiscal due to less agricultural growth. He was a little doubtful of 6.1% expansion achieved during the first quarter of this fiscal. The economy will not grow at the pace it did in April-June period, but that does not warrant a downward revision of growth forecast.

Mukherjee said that he is, however, not revising the target of 6% plus growth rate for the fiscal as the economy will expand at a higher pace in the fourth quarter

A revival in rains is aiding monsoon-sown crops and reserves of grains are sufficient to meet shortages from drought that has hit about half the country, Prime Minister Manmohan Singh said on Wednesday, 9 September 2009

Meanwhile, the Oil India IPO which opened for bidding on 7 September 2009, was subscribed 4 times by 16:00 ST on day three, 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.

The BSE 30-share Sensex was up 59.88 points or 0.37% to 16,183.55, its highest closing since 30 May 2008. The Sensex opened 12.58 points higher at 16,111.09. The Sensex lost 78.90 points the day's low of 16,044.77 in early trade. The barometer index gained 92.07 points at the day's high of 16,215.74 in mid-afternoon trade.

The S&P CNX Nifty was up 9 points or 0.19% to 4814.25, its highest closing since 30 May 2008. Nifty September 2009 futures were at 4821 at a premium of 6.75 points as compared to the spot closing.

The Sensex has jumped 785.22 points or 5.09% in four trading days to 16,183.55 on 9 September 2009 from a recent low of 15,398.33 on 3 September 2009 as revival of monsoon rains, strong response to the initial public offer of Oil India, a survey showing an improvement in business confidence of India Inc 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 6536.24 points or 67.75% in calendar year 2009 as on 9 September 2009. From a 3-year closing low of 8,160.40 on 9 March 2009, the Sensex is up 8023.15 points or 98.31% as on 9 September 2009. FII inflow in calendar year 2009 totaled Rs 41536.10 crore (till 8 September 2009).

Coming back to today's trade, the market breadth, indicating the overall health of the market, was negative. On BSE, 1536 shares declined as compared with 1299 that advanced. A total of 76 shares remained unchanged. The breadth was strong in early trade.

The BSE clocked a turnover of Rs 6122 crore, lower than Rs 7190 crore on Tuesday, 8 September 2009. Turnover in NSE's futures & options (F&O) segment was Rs 53,935.19 crore, much lower than Rs 67,576.95 crore on Tuesday, 8 September 2009.

The BSE Mid-Cap index fell 0.05% to 5,939.81 and the BSE Small-Cap index rose 0.06% to 7,183.38. Both these indices underperformed the Sensex

Sectoral indices on BSE displayed mixed trend. The BSE Oil & Gas index (up 2.36%), and the BSE Bankex (up 0.59%), outperformed the Sensex.

The BSE Metal index (up 0.24%), BSE Teck index (down 1.09%), BSE Consumer Durables index (down 0.65%), BSE Realty index (down 1.65%), the BSE PSU index (down 0.49%), the BSE Auto index (down 0.88%), the BSE Capital Goods index (up 0.80%), the BSE FMCG index (down 0.56%), the BSE Power index (down 0.32%), BSE IT index (down 0.34%), the BSE Healthcare index (up 0.35%), underperformed the Sensex.

Among the 30-member Sensex pack, 18 declined while the rest gained

India's largest private sector firm by market capitalisation and oil refiner Reliance Industries (RIL) jumped 4.79% to Rs 2174.50 on 18.12 lakh shares. It was the top gainer from the Sensex pack. The stock extended Tuesday's over 3% gain. As per reports, RIL is likely to begin supplying natural gas from KG-D6 fields to state-run gas utility GAIL India's LPG plants this week.

Earlier on 28 August 2009, GAIL India signed a Gas Sales and Purchase Agreement (GSPA) for buying 2.6 million standard cubic meter per day of gas from RIL's KG-D6 fields at the Government approved price of $4.2 per million British thermal unit (mBtu).

Meanwhile, 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, RIL sought to wriggle 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 RNRL 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 fell 0.77% while RNRL slipped 0.35%.

A rally in crude oil weighed on state-run oil marketing firms. HPCL (down 2.68%), BPCL (down 4.26%), and Indian Oil Corporation (down 3.36%), declined. Higher crude oil prices will increase under-recoveries of state-run oil firms on domestic sale of petrol, diesel, LPG and kerosene at a controlled price.

Light, sweet crude futures for delivery in September 2009, surged by $3.08 a barrel, or 4.53% to $71.10 a barrel on the New York Mercantile Exchange on Tuesday, 8 September 2009 as a slump in the dollar spurred demand for commodities

Aban Offshore fell 2.68% on reports the firm is likely to lose a contract for deploying its drill ship in Ghana, which could dent its revenue by Rs 744 crore in the current financial year.

Metal stocks extended recent gains after LMEX, a gauge of six metals traded on the London Metal Exchange jumped 2.43% on Tuesday, 8 September 2009. Back home, the world's largest steel marker ArcelorMittal's deal to become a co-promoter of India's Uttam Galva Steel has also boosted sentiment. Uttam Galva Steels jumped 5% at Rs 137.85, its lifetime high

India's largest private sector steel marker by sales Tata Steel gained 0.84%. The company on Monday, 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.

Usha Martin Steel (up 10.28%), ISMT (up 7.03%), National Steel & Agro Industries (up 9.78%), Visa Steel (up 7.68%), Mahindra Ungine Steel Company (up 9.82%), surged.

Hindalco Industries (up 3.87%), Sterlite Industries (up 1.31%), Sesa Goa (up 1.10%), were the other gainers from the metal pack.

India's largest mobile services provider by sales Bharti Airtel fell 3.32% to Rs 410 and was the top loser form the Sensex pack. The exclusive talks between Bharti and MTN will end on 30 September 2009 for the first stage of equity swap. As per reports, post the equity swap, the complete merger may take another three to five years. The Bharti-MTN arrangement would be fully operational by mid-2010 and its success would decide the timeline of the full merger. Also Bharti needs SingTel's nod for certain pre-approved matters but MTN expects SingTel would waive the right of first refusal (ROFR) or agree to joint discussions, reports added.

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.

India's largest private sector power generation company by sales Reliance Infrastructure shed 0.94% on reports the Maharashtra Electricity Regulatory Commission has ordered probe into the company over the recent tariff hikes.

Banking shares were mixed after Reserve Bank of India Governor's comments about monetary tightening.

India's largest private sector bank by net profit ICICI Bank rose 0.32%. The bank's managing director 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 fell 0.32%. 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.

SBI 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 second largest private sector bank by net profit HDFC Bank gained 0.99%.

Bank of Baroda rose 3.39% after the bank's chief said the bank is looking at a overall loan growth of 20% in 2009-2010 and has seen no mark-to-market losses in the current quarter despite a muted treasury growth.

India's largest mortgage lender by total income Housing Development Finance Corporation reversed early fall and settled 1.19% higher at Rs 2524.95. The stock had dipped to a low of Rs 2453 earlier in the day on fears a surge in inflation may stoke inflationary pressure in the economy and prop up interest rates. Rise in rates may crimp lending.

IFCI jumped 3.38% on reports the government has asked the company to induct a strategic partner, after it failed to sell a 26% stake in 2007.

Auto stocks dropped for the second day in a row on profit taking after a recent sharp surge triggered expectations that the forthcoming festive season will boost auto sales. India's largest truck marker by sales Tata Motors lost 0.83%. The stock had surged 11.32% on Monday, 8 September 2009.

India's largest tractor maker by sales Mahindra & Mahindra slipped 0.45%. India's top small car maker by sales Maruti Suzuki fell 0.69%.

India's largest bike maker by sales Hero Honda Motors fell 2.67%. India's second largest bike maker by sales Bajaj Atuo shed 2.10%.

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.

Realty stocks dropped for second day on profit booking after a recent rally triggered by reports prices of residential units in key regions like New Delhi-NCR (National Capital Region) and Mumbai have moved up 10-15% on gradual return of residential property buyers.

India's largest realty developer by sales DLF lost 3.13%. The stock declined despite reports the company plans to drop those projects where margins are low and rationalise construction activities as it wants to focus on improving the company's cash flow and reduce debt by half.

Phoenix Mills (down 1.33%), Unitech (down 0.44%), Omaxe (down 0.72%), Indiabulls Real Estate (down 1.76%), and Sobha Developers (down 0.78%) edged lower

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 power equipment maker by sales Bharat Heavy Electricals (Bhel) fell 0.26% to Rs 2234. The stock hit day's high of Rs 2285 boosted by reports the company hopes to get orders worth at least Rs 10900 crore from state-owned NTPC as the utility plans to add generators.

IT stocks were mixed as rise in American depository receipts (ADR) was offset by firm rupee against the dollar. A firm rupee impacts operating profit margins of IT firms negatively as the sector derives a lion's share of revenue from exports. India's largest software services exporter by sales Tata Consultancy Services rose 1.44%. 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.

India's second largest software services exporter by sales Infosys was unchanged at Rs 2200. Its ADR rose 2.49% on 8 September 2009. India's third largest software services exporter by sales Wipro slipped 1.77% despite a 2.92% rise in its ADR on 8 September 2009

The partially convertible rupee was now hovering at 48.54, lower than Tuesday's close of 48.47/48

FMCG pivotals dipped for the second day as investors shifted their exposure from the so-called defensive sector. India's largest FMCG company by sales Hindustan Unilever lost 0.54% after sliding nearly 3% on Tuesday, 8 September 2009.

ITC (down 0.92%), Dabur India (down 2.34%), Britannia Industries (down 0.24%), Bata India (down 1.29%), Godrej Consumer (down 7.40%), edged lower

IFCI notched volume of 2.99 crore and topped volume chart on BSE. Unitech (1.40 crore shares), Ispat Industries (1.08 crore shares), GVK Power & Infrastructure (97.87 lakh shares), and Suzlon Energy (95.32 lakh shares), followed IFCI in that order

Reliance Industries was the top traded counter on BSE with turnover of Rs 387.79 crore followed by DLF (Rs 185.97 crore), IFCI (Rs 179.11 crore), Unitech (Rs 157.91 crore), and HDIL (Rs 149.39 crore).

Tea stocks gained on reports average tea prices rose to Rs 133.80 a kilogram in seven months till July 2009 from Rs 106.27 per kg the year before on the back of fall in production.

Warren Tea (up 6.98%), Diana Tea (up 4.50%), McLeod Russel (up 7.60%), Harrisons Malayalam (up 6.17%), Assam Company (up 4.81%), Tata Tea (up 1.45%), Goodricke Group (up 5.11%), and Jayshree Tea (up 4.42%), rose.

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.

FDC spurted 6.53% after its board approved buyback of equity shares of the company at a maximum price of Rs 60 per share, a 19.05% premium over the ruling market price. The company announced the buyback plan during trading hours today, 9 September 2009.

Opto Circuits (India) spurted 10.53% on reports the has raised Rs 400 crore by way of a qualified institutional placement. The announcement was made before market hours today, 9 September 2009