RIL, auto stocks slide in flat market

Key benchmark indices ended little changed after witnessing wild gyrations throughout the day. The BSE 30-share Sensex rose 7.71 points or 0.05%, off 61.06 points from the day's high, and up 75.19 points from the day's low. The BSE Sensex extended gains for third straight session while S&P CNX Nifty ended marginally lower. Market breadth was weak as small and mid-cap stocks underwent correction.

IT stocks were in demand for the third straight day. However, auto stocks retreated on profit booking. A divergent trend was witnessed in index heavyweights. Reliance Industries fell over 1% whereas ICICI Bank gained over 2% and Bharti Airtel jumped nearly 4%.

Intraday volatility on the bourses was high. The market slipped into the red in early trade soon after initial gains which took the key benchmark indices to their highest level in more than 16 months. IT stocks led a strong intraday rebound in morning trade. The market cut gains later. It once again slipped into the red in mid-morning trade before regaining positive zone. The key benchmark indices oscillated between positive and negative zone later. Stock markets will remain shut on Friday, 2 October 2009 on account of Gandhi Jayanti holiday.

The market surged in early afternoon trade as European markets rose in initial trade. The market cut gains later. It slipped into the red for a brief while before bouncing back. A sudden sell-off pulled the market to a fresh intraday low in mid-afternoon trade as European stocks reversed gains. The market bounced back shortly. Volatility was immense in the last half an hour of trade

A latest economic data showed that the economy is recovering from a slowdown last year. The HSBC Markit Purchasing Managers' Index (PMI), based on a survey of 500 companies, surged 55 in September 2009 from a five-month low of 53.2 in August 2009. A reading above 50 shows expansion while below 50 reading denotes contraction. The new orders index rose to 58.3 in September 2009, from August's 56.2, which was its lowest in four months.

On the flip side, exports fell for eleventh straight month as the global slump crimped demand for Indian goods. Exports fell 19.4% to $14.29 billion in August 2009 over August 2008, the government data showed today, 1 October 2009. Imports dropped 32.4% to $22.66 billion in August 2009 over August 2008. India's trade deficit shrunk to $8.37 billion in August 2009 from $15.79 billion a year earlier.

The International Monetary Fund (IMF) today said China and India will lead Asia's expansion in 2010, growing at rates of 9% and 6.4%, respectively. The IMF said global economy will grow next year, but it will be a sluggish recovery that could stall if policymakers around the world announce a premature exit from accommodative monetary policy and fiscal policies

The Fund said it now expects the world economy to contract 1.1% in 2009 before growing 3.1% in 2010. This is more upbeat than its last update in July 2009 when the Fund projected the world economy would shrink 1.4% in 2009, before expanding 2.5% in 2010.

Over the four years starting at the end of 2010, global growth is expected to average a little more than 4% a year, below the 5% growth rates before the financial crisis erupted, the IMF said.

Closer home, inflation based on the wholesale price index rose 0.83% in the year through 22 September 2009, higher than previous week's annual gain of 0.37%, government data showed today, 1 October 2009. The government revised upward headline inflation for the year through 25 July 2009 to a fall of 0.71% from a provisional decline of 1.58% Most auto and cement firms will unveil their monthly sales data for September 2009 starting today, 1 October 2009.

The next trigger for the stock market is Q2 September 2009 results of India Inc next month. There is optimism about Q2 September 2009 results after advance tax collections registered a positive growth in the second quarter after witnessing a negative growth in the first quarter. Corporate advance tax and advance personal income-tax were up by 14.7% and 1.7%, respectively in the September 2009 quarter. Infosys kickstarts the reporting season on 9 October 2009.

But a section of the market is concerned that a glut in share sales may suck liquidity from the secondary market. The corporate sector has raised large sums of money through equity and equity related instruments in the past six months or so to either to retire high cost debt or to fund expansion. The supply of paper by Indian firms appear limitless, raising concerns that additional share sales will suck liquidity from the secondary market.

As per one report, companies plan to raise at least Rs 40,000 crore through initial public offers (IPOs)/follow on public offers (FPOs) in the second half of the current financial year. Power companies such as GMR Energy, Indiabulls Power and JSW Energy and state-run Bharat Heavy Electricals and NTPC are likely to tap the primary market. A number of realty firms, too, are likely to tap the primary market in the coming months.

Reliance Infratel also announced on 22 September 2009, its intention to raise Rs 5,000 crore from the primary market. A number of companies are also in the fray to raise funds by way of qualified institutional placement (QIP), reports suggest.

Divestment of state-run firms by the government may also increase the supply of paper in the market. A decent debut of Oil India on the bourses on Wednesday, 30 September 2009, may boost government's divestment plan. S. Pradhan, the joint secretary of the department of disinvestment, Government of India, on Wednesday said the government plans to sell stakes in at least five state-run firms by the end of the fiscal year in March 2010 following successful IPOs of two firms that raised $1.8 billion.

His statement comes close on the heels of media reports that the government is planning to announce a blueprint for selling its stake in state-owned firms in the first week of October 2009. The policy is expected to suggest how the government will eventually bring down its stake in public sector companies to 75% over a period of time.

European markets were trading lower today, 1 October 2009 after a firm start. Key benchmark indices in UK, Germany and France were down by 0.50% and 0.66%.

Germany's retail sales declined in August 2009, official data showed Thursday, highlighting the ongoing weakness of domestic demand in Europe's biggest economy.

On the flip side, the rate of deterioration in the euro-zone factory sector continued to slow in September 2009, according to the final Markit euro-zone manufacturing purchasing managers index for the month released Thursday. The index rose to a 16-month high of 49.3 in September 2009 from 48.2 in August 2009 and exceeded a preliminary estimate of a rise to 49. A reading of less than 50 indicates a majority of managers saw a decline in activity, while a figure of more than 50 signals expansion. The index has been below the neutral 50 level for 16 consecutive months.

Asian stocks fell for the first time in three days on concern the region's economic recovery may falter after a Bank of Japan survey showed companies plan to deepen investment cuts. The Nikkei 225 average was down 1.53%. In other Asian stocks, key benchmark indices in South Korea, and Singapore were down by between 0.57% and 1.70%. However, the Weighted index in Taiwan rose 0.48%.

Stock markets in Shanghai, Hong Kong and elsewhere in the greater China region were closed for National Day. The Chinese markets are shut for a week starting today for National day and Autumn festival celebrations.

Trading in US index futures indicated Dow could fall 43 point at the opening bell today, 1 October 2009.

US markets ended modestly lower on Wednesday, 30 September 2009 on the back of mixed economic data. The Dow Jones Industrial Average slipped 29.92 points, or 0.31%, to 9,712.28. The Standard & Poor's 500 Index fell 3.53 points, or 0.33%, to 1,057.08. The Nasdaq Composite index shed 1.62 points, or 0.08%, to 2,122.42.

In economic data, the Chicago purchasing-manager's index fell to 46.1 in September 2009 from 50 in August 2009 indicating a contraction. Also the jobs data report disappointed. US private employers cut 254,000 jobs from their payrolls in September 2009, more than expected but less than the revised 277,000 loss recorded in August 2009. Meanwhile, the US economy contracted at a 0.7% rate in the second quarter, less than the 1% plus decline expected.

The BSE 30-share Sensex was up 7.71 points or 0.05% to 17,134.55, its highest closing since 21 May 2009. The Sensex opened 59.36 points higher at the 17,186.20. The barometer index rose 68.77 points at the day's high of 17,195.61 in early trade, its highest level since 21 May 2008. The Sensex lost 67.48 points at the day's low of 17,059.36 in mid-afternoon trade

The S&P CNX Nifty was down 0.55 points or 0.01% to 5083.40. It hit a high of 5110.50 in early trade, its highest level since 22 May 2008.

The BSE Sensex extended its gains for the third straight day today, 1 October 2009. It has risen 441.55 points or 2.64% in three trading days from 16693 on 25 September 2009

The Sensex is up 7487.24 points or 77.60% in calendar year 2009 as on 1 October 2009. From a 3-year closing low of 8,160.40 on 9 March 2009, the Sensex is up 8,974.15 points or 109.97% as on 1 October 2009. FII inflow in the calendar year 2009 totaled Rs 58616.70 crore (till 29 September 2009).

Nifty October 2009 futures were at 5069, at a discount of 14.40 points as compared to the spot closing.

The total turnover on BSE amounted to Rs 6506 crore, lower than Rs 6,668.92 crore on Wednesday, 30 September 2009. Turnover in NSE's futures & options (F&O) segment was Rs 54,343.16 crore, lower than Rs 55,412.81 crore on Wednesday, 30 September 2009.

The market breadth, indicating the overall health of the market was weak. On BSE, 1,688 shares declined as compared with 1,154 that rose. A total of 81 shares remained unchanged.

The BSE Mid-Cap index fell 0.35% to 6,302.01 and the BSE Small-Cap index fell 0.04% to 7,587.18. Both the indices underperformed the Sensex.

Sectoral indices on BSE displayed mixed trend. The BSE Bankex (up 0.77%), the BSE FMCG index (up 0.65%), the BSE PSU index (up 0.26%), the BSE Teck index (up 1.45%), the BSE IT index (up 0.88%), the BSE Metal index (up 0.18%), outperformed the Sensex.

The BSE Auto index (down 0.92%), the BSE Capital Goods index (down 0.19%), the BSE Consumer Durables index (down 0.90%), the BSE Healthcare index (down 1.30%), the BSE Oil & Gas index (down 0.84%), the BSE Power index (down 0.42%), the BSE Realty index (down 0.04%), underperformed the Sensex.

Among the 30-member Sensex pack, 16 rose while the rest slipped. HDFC (down 2.77%), Tata Power (down 2.42%), and Larsen & Toubro (down 1.32%), edged lower from the Sensex pack.

India's largest cellular services provider by sales Bharti Airtel spurted 3.87% to Rs 434.75 on high volume of 68.39 lakh shares after its merger talks with South Africa's MTN Group to create the world's third-largest mobile operator were called off just a few hours before the end of the 30 September 2009 deadline for the talks. But the stock came off day's high of Rs 467. It was the top gainer from the Sensex pack

The deal was called off after South Africa's reluctance to allow a flagship corporate in the country to lose its national character.

India's second largest cellular services provider by sales Reliance Communications (RCom) gained 2.86%. As per reports on 30 September 2009, RCom has entered into partnership with software major Microsoft for offering Windows Mobile solutions on its wireless networks.

India's largest bank by net profit and branch network State Bank of India (SBI) rose 0.20% to Rs 2200, rebounding from day's low of Rs 2170.10. The bank has cut deposit rates across maturities by 25 basis points from 5 October 2009. The announcement was made at the fag end of the trading session

The (SBI) stock has been on a roll recently after Chairman O.P. Bhatt on 8 September 2009 said the bank's earnings are likely to grow 30-35% in Q2 September 2009 over Q2 September 2008.

Other bank stocks were mixed. India's largest private sector bank by net profit ICICI Bank was up 2.35% after its ADR jumped 6.11% on Wednesday, 30 September 2009. The bank sold 4.41% stake in software services provider 3i Infotech for Rs 46.17 crore on Wednesday, 30 September 2009, in open market transactions on the BSE and the NSE. Shares of 3i Infotech jumped 13.04%.

India's second largest private sector bank by net profit HDFC Bank was down 0.32% despite its ADR rising 3.06% on Wednesday, 30 September 2009.

Global ratings firm Fitch Ratings today, 1 October 2009, in a special report said that the Indian banking system is expected to remain resilient even under rigorous stress assumptions on both asset quality and profitability during financial year ended March 2010 and 2011. The impact of the agency's 'stress test' on 30 Indian banks indicated that capital is protected for a majority of the banks, while some of the weaker banks would need to raise core capital in order to better prepare for the current downturn in the credit cycle.

The Reserve Bank of India (RBI) on Wednesday, 30 September 2009 extended the tenure of the working group to review the system of loan pricing by banks to improve transmission of monetary signals on to interest rates in the economy. The RBI said it has extended the tenure of the working group on the Benchmark Prime Lending Rate (BPLR), set up in June 2009, to 16 October 2009 from end-September earlier.

India's largest private sector firm by market capitalisation and oil refiner Reliance Industries (RIL) fell 1.19% to Rs 2175. The stock moved in a band of Rs 2155- Rs 2205. Upstream regulator V.K. Sibal today, 1 October 2009 said that global firms considering oil and gas exploration in India may be less enthusiastic this year because of global financial problems and the public spat between the Ambani brothers.

In the face of opposition from the Power Ministry and Anil Ambani group firm Reliance Infrastructure on the marketing margins charged, RIL has justified the levy saying it was essential to cover risks and costs incurred in marketing of gas.

Terming as illegal the market margin, Reliance Infra had refused to pay the levy prompting RIL to issue a notice for suspension of fuel supply for "default". NTPC has sought to know whether the margins levied by RIL had government's approval.

RIL had said on 24 September 2009 it has signed gas supply agreement with state-run utility NTPC to supply gas for some of its power plants for five years. Reliance will supply 0.61 million standard cubic metres a day (mscmd) to NTPC, and expects to start supplies within a week.

India's largest power generation firm by sales NTPC fell 1.73%

India's largest oil exploration firm by sales Oil and Natural Gas Corporation (ONGC) rose 0.91%. The Union Cabinet today allowed ONGC's subsidiary ONGC Videsh to invest an additional $149.5 million for expansion of its oil block in Vietnam.

Shares of PSU OMCs dropped as higher crude oil prices will increase under-recoveries on domestic sale of petrol, diesel, LPG and kerosene at a controlled price. Bharat Petroleum Corporation (BPCL) (down 2.44%), Hindustan Petroleum Corporation (HPCL) (down 3.16%) and Indian Oil Corporation (IOC) (down 1.12%), edged lower.

Light, sweet crude surged by $3.90 a barrel, or 5.85% to $70.61 a barrel on the New York Mercantile Exchange on Wednesday, 30 September 2009, after the US Energy Department posted an unexpected drawdown in gasoline stockpiles.

Aban Offshore gained 3.32% after the company's step down unit drillship Aban Abraham commenced drilling operations. The company made this announcement during trading hours today, 1 October 2009.

Gulf Oil Corporation jumped 5% after a wholly-owned subsidary, IDL Speciality Chemicals, entered into an agreement with Biocon to sell its bulk pharmaceutical business

IT stocks reversed early losses on expectations of good September 2009 results. Gains in American depository receipt (ADR's) on Wednesday, 30 September 2009 also aided the recovery.

India's largest IT exporter by sales Tata Consultancy Services jumped 2.20% to Rs 633, after sliding to day's low of Rs 615.05. The company before market hours on 30 September 2009 said that it has signed a two year multi million dollar deal with Singapore-based People's Association for application management services.

India's third largest software services exporter by sales Wipro rose 0.47% to Rs 604.55 after declining to day's low of Rs 591.20. Its American depository receipt (ADR) rose 2.87% on Wednesday, 30 September 2009. India's second largest software services exporter by sales Infosys rose 0.80% to Rs 2326.90, recovering from day's low of Rs 2290. Its ADR rose 0.71% on Wednesday, 30 September 2009.

India's largest power equipment maker by sales Bharat Heavy Electricals gained 0.38%. The company recently won a Rs 270 crore contract in Belarus to build a 120 megawatts power plant.

Auto stocks declined on profit booking after a recent strong rally. India's top small car maker by sales Maruti Suzuki India lost 3.47% to Rs 1640 on profit booking after striking a record high of Rs 1740 in intraday trade on Wednesday, 30 September 2009.

The company's total sales rose 17.3% to 83,306 vehicles in September 2009 over September 2008. The figures were released at the onset of the day's trading session today, 1 October 2009.

India's largest motorbike maker by sales Hero Honda Motors fell 2.08%. India's largest truck maker by sales Tata Motors dropped 2.43%

India's largest tractor maker by sales Mahindra & Mahindra rose 0.71% to Rs 887.50. The stock recovered from day's low of Rs 867.05 after the company said its total vehicle sales increased 11% to 28,134 units in September 2009 over September 2008. The September 2009 vehicle sales data was disclosed during trading hours today, 1 October 2009.

Metal stocks were mixed after a gauge of six metals traded on the London Metal Exchange, LMEX, surged 3.07% on Wednesday, 30 September 2009. Sterlite Industries (up 0.06%), Sesa Goa (up 0.68%), Jindsl Stainless (up 17.72%), JSW Steel (up 2.82%), gained.

Tata Steel (down 0.03%), National Aluminium Company (down 0.59%), Hindalco Industries (down 2.44%), declined.

Realty shares declined on profit booking. DLF (down 0.30%), Indiabulls Real Estate (down 0.50%), Sobha Developers (down 0.78%), Unitech (down 1.95%), and Ansal Infrastructures (up 1.08%), slipped.

Realty companies including Emaar MGF Land, Lodha Developers and Sahara Prime City have filed their draft red herring prospectuses on 29 September 2009 with the market regulator, Securities and Exchange board of India (Sebi), to raise a total of around Rs 9,800 crore through initial public offerings (IPO).

Cement stocks gained ahead of the monthly sales data for September 2009. ACC (up 0.57%), UltraTech Cement (up 6.38%), Madras Cement (up 2.69%), JK Lakshmi Cements (up 2.99%), rose.

Ambuja Cements surged 3.26% to Rs 102.90 after a block deal of 74.16 lakh shares was executed on BSE at Rs 100 per share. The company's shipments fell 0.7% to 1.36 million tonnes and production rose 0.72% to 1.38 million in September 2009 over September 2008. The data hit the market during trading hours today, 1 October 2009.

Pharma shares dipped on profit taking after recent strong gains. Dr Reddy's Laboratories (down 3.65%), Cipla (down 3.29%), Divi's Labs (down 3.24%), Nicholas Piramal (down 1.87%), declined from the pharma pack.

Biocon rose 1.24% after the company signed a pact with Hyderabad based IDL Specialty Chemicals for acquiring its bulk pharmaceutical business. No other details were provided by the company. The company made this announcement after trading hours on Wednesday, 30 September 2009.

Glenmark Pharmaceuticals was down 0.88%. The company's subsidiary, Glenmark Generics, has reportedly filed for an initial public offering to raise Rs 550-600 crore.

Shree Ashtavinayak Cine Vision spurted 9.97%, after the company said it will raise $150 million, or Rs 721 crore, through various routes from both the domestic and international markets. The announcement was made before trading hours on Tuesday, 29 September 2009. The stock ended almost unchanged at Rs 68.10 on the BSE that day

Cals Refineries clocked highest volume of 12.16 crore shares on BSE. Ispat Industries (3.42 crore shares), 3i Infotech (1.56 crore shares), NIIT (1.06 crore shares) and Indiabulls Securities (99.75 lakh shares) were other volume toppers in that order.

Bharti Airtel was the top traded counter on BSE with turnover of Rs 303.78 crore followed by Educomp Solutions (Rs 251.19 crore), Oil India (Rs 184.78 crore), Aban Offshore (Rs 172.91 crore) and DLF (Rs 163.18 crore).