Sensex sheds 3% from 17-month high -

The key benchmark indices extended losses for the third straight day on weak global markets and rise in headline inflation above the 1% mark. Intraday volatility was high. The BSE 30-share Sensex lost 219.43 points or 1.29%, off close to 245 points from the day's high and up close to 70 points from the day's low.

The Sensex closed below the psychological 17,000 mark after regaining that level in mid-morning trade for a short while. The Sensex had last closed below the 17,000 mark on 9 October 2009. The 50-unit S&P CNX Nifty closed below the psychological 5,000 mark after alternatively moving above and below that level in late trade. Nifty had last time closed below the 5,000 mark on 9 October 2009. The market breadth was weak in contrast to a positive breadth earlier in the day.

Index heavyweight Reliance Industries dipped as the hearing on a gas dispute with Reliance Natural Resources (RNRL) continues in the Supreme Court. Bank stocks fell after Moody's Investors Services on Wednesday downgraded the supported ratings of 13 Indian commercial banks after its global review of systemic support indicators for individual banking systems. Capital goods, metal and realty stocks also fell.

Intraday volatility was high. After opening slightly higher, the market soon lost ground on lower Asian stocks. The Sensex fell below the psychological 17,000 mark. The market cut losses later after initial trends showed that the Congress-Nationalist Congress Party combine was surging ahead in assembly election in Maharashtra. The Sensex regained 17,000 level in mid-morning trade. It soon fell below that level as weak Asian stocks weighed on domestic bourses.

The Sensex fell to a fresh day's low in afternoon trade as European stocks dropped. The market extended losses in mid-afternoon trade. The market cut losses after hitting a fresh intraday low in late trade.

Hedge fund Galleon Group is winding down all its hedge funds and looking at alternatives for the business, company founder Raj Rajaratnam told employees and investors in a letter Wednesday. One of those alternatives is selling all or part of Galleon to another firm.

Rajaratnam was one of six people arrested and charged last Friday in a massive insider-trading case. The charges had already caused many Galleon investors to try to withdraw their money. The deadline for redemption requests in most of Galleon's funds was 15 November 2009. The hedge fund has assets under management of about $3.7 billion.

As far as Galleon's India operations are concerned, it has a 7% stake in broking firm Edelweiss Capital, 4.6% stake in construction firm Shriram EPC and 0.3% stake in Pipavav Shipyard.

On the macro front, inflation based on the wholesale price index (WPI) rose 1.21% in the year through 10 October 2009, higher than previous week's annual rise of 0.92%, date released by the government today showed. Within the WPI, the food articles index rose 13.34%. The government revised upwards inflation for the year through 27 August 2009 to a much smaller fall of 0.21% from an estimated 0.95% decline.

The Prime Minister's economic advisory council said on Wednesday that it sees inflation at around 6% by the end of the current fiscal year to March 2010. Faster industrial output growth and rising inflationary pressures have strengthened case for an end to the RBI's accommodative monetary stance next year. Industrial output grew at its fastest pace in 22 months in August 2009 at 10.4%.

The RBI pumped in massive liquidity in the banking system in the past one year or so to help revive the domestic economy in the aftermath of the global financial crisis. While as exit from the loose monetary policy is imminent, speculation on the bourses is the timing of the exit policy. The RBI is expected to keep its benchmark lending and borrowing rates on hold at a quarterly monetary policy review on 27 October 2009.

The RBI in its report on trend and progress of banking in India for 2008/09 released today, 22 October 2009, said managing the heavy government borrowing in a non-disruptive way is a major challenge for the central bank, as hardening bond yields run counter to its low rate policy needed for lifting growth.

It said financial reforms need to be carried out in a re-calibrated manner after the global financial crisis following Lehman Brothers' collapse last year. The report also sounded a note of caution on securitisation and asset derivative deals.

On the political front, the Congress was on Thursday set to capture power in Maharashtra for a third consecutive term and sweep Arunachal Pradesh while a not-so-good performance in Haryana left it as the single largest party scrambling for numbers to get a majority. The assembly elections in these three states are being seen as the first crucial test of popularity for major political parties after the Lok Sabha polls in May this year where the Congress had a comfortable victory.

Stock and sector-specific activity may dominate trade on the bourses in the coming days based on expectations on Q2 September 2009 results. Auto firms are seen reporting strong Q2 results on strong volume growth and on lower input costs. Lower interest rates and pay hike for government employees has boosted auto sales this year after last year's slowdown in demand. Government employees have started receiving the balance 60% of their wage arrears as per the recommendations of the VIth Pay Commission.

Cement firms, too, are seen reporting good Q2 numbers on the back of volume growth, higher realisation and decline in costs like imported coal. Metal firms are seen reporting fall in net profit due to a sharp fall in metal prices on year-on-year basis.

Fall in volumes in the commercial property segment and lower realisations in both commercial and residential property segments, will pull earnings of realty firms lower.

Banks are seen reporting a sedate growth in core lending amid sluggish credit offtake. On the flip side, PSU banks will benefit from treasury gains amid volatility in prices of government securities during the quarter.

Strong growth in new subscriber additions will aid topline growth of telecom firms. But falling average revenue per user (ARPU) and revenue per minute due to intense competition will cap bottom line growth.

European stocks fell on Thursday, tracking losses in Asia and Wall Street, with telecom equipment maker Ericsson's poor results hitting tech shares. The key benchmark indices in France, Germany and UK were down by between 1.06% to 1.46%.

Ericsson's, the world's largest network-equipment vendor, said its third-quarter net profit fell on heavy restructuring charges and losses at handset joint-venture Sony Ericsson. Network-equipment sales at the company declined due to lower demand.

British retail sales rose 2.4% in September 2009, lower than an expected rise of 2.7%. Sales were flat on a month on month basis, falling short of expectations of a 0.5% rise.

European Central Bank Governing Council member Axel Weber on Thursday said the euro zone was unlikely to fall back into recession soon after exiting it. He also said there were no risks to price stability in the policy-relevant medium-term horizon. He also said the global economic turnaround after a free fall was striking.

Asian stocks fell amid disappointment that Chinese growth data, though robust, offered few surprises. The Shanghai Composite Index was down 0.62%.

China's gross domestic product expanded 8.9% in the third quarter compared to the same period a year ago, according to data released by the National Bureau of Statistics. The increase was greater than the 7.9% expansion in the second quarter.

In other figures released Thursday, urban fixed-asset investment in China rose 33.3% in the first three quarters, edging up from 33% growth in the first eight months of the year. Industrial production in September rose 13.9% on year, higher than expectations of a 13.3% rise and above August's 12.3% gain. For the first nine month of the year industrial production rose 8.7%.

The apparent economic pick-up could lead to inflation, which would add to pressure on Beijing for a tightening of policy. China's State Council said Wednesday the economy is firming, signaling that is may exceed its official 8% growth target this year, and raising possibility that Beijing is edging closer to a tightening stance. For the time being, China said it has no plans to walk back from its current expansionary lending policy and large fiscal stimulus. The CEO of China's sixth-largest bank warned that a bubble may be developing.

In other Asian markets, key benchmark indices in Hong Kong, South Korea, Singapore and Taiwan fell by between 0.18% to 1.42%.

Japan's Nikkei 225 Stock Average slumped 0.64%. Japan's exports fell at the slowest pace in 10 months in September 2009 as stimulus spending in China drove demand for the nation's cars and machinery. Shipments abroad dropped 30.7% from a year earlier, compared with a 36% decline in August 2009, the Finance Ministry said today in Tokyo. Exports to China, Japan's biggest market, fell 13.8%, half the pace of the previous month.

Trading in US index futures indicated the Dow could fall 18 points on Thursday, 22 October 2009.

US markets edged lower on Wednesday on profit taking despite strong earnings from Morgan Stanley. The Dow Jones industrial average fell 92.12 points, or 0.9%, to 9,949.36. The S&P 500 index was down 9.66 points, or 0.9%, to 1,081.40. The Nasdaq Composite index slipped 12.74 points, or 0.6%, to 2,150.73.

Morgan Stanley reported better-than expected quarterly profit on strong fixed income sales and trading revenue.

The US economy is firmly poised for a recovery from its deep recession but growth may be moderate and the job market will not revive immediately, senior White House aide Lawrence Summers predicted on Wednesday. In an interview to a news agency, Summers said job growth would lag behind a broader economic recovery. Summers, who heads the White House's National Economic Council, also gave strong backing to the beleaguered US dollar, which has fallen to a 14-month low against major currencies.

US economic conditions stabilized or improved modestly in most parts of the country, according to a Federal Reserve report on Wednesday that suggested the economy was slowly clawing out of a recession. In its "Beige Book" of anecdotal reports on the economy, the Fed noted improvement in two of the hardest hit areas -- residential real estate and manufacturing. The central bank gave a grim assessment of commercial real estate, which is widely seen as one of the big remaining trouble spots for the still-struggling financial sector.

Meanwhile, a high-level commission on the World Bank on Thursday called for sweeping changes to reflect the world's new economic order and said European countries are overrepresented in the decision-making executive board. In a long-awaited report, the 11-member commission, led by former Mexican president Ernesto Zedillo, said the Bank's effectiveness was undermined by a hierarchy dominated by the United States and Europe "offering many member countries too little voice and too few opportunities for participation."

Closer home, the supply of paper by Indian firms appear limitless, raising concerns that additional share sales will suck liquidity from the secondary equity market. As per reports, Indian firms have garnered about $9 billion (Rs 32,400 crore at the current exchange rates) through sale of shares and convertible bonds to institutional buyers since April 2009. Indian companies are taking advantage of a surge in liquidity to recapitalize and fund capital expenditure after being starved of cash last year.

Most of these companies - from industries ranging from liquor and spirits to infotech - issued equity shares to a select group of investors by way of qualified institutional placement or QIP. If the enabling resolutions passed by the companies are any indication, Indian firms are gearing up to raise $15 billion (Rs 69,427 crore) in the next six months. The list includes Hindalco (Rs 2,900 crore), JSW Steel ($1 billion), India Cements ($100 million), Essar Oil ($2 billion), Tata Steel (Rs 5,000 crore), Jet Airways ($ 400 million) and Bharat Forge ($150 million).

Unlisted Reliance Infratel announced on 22 September 2009 its intention to raise Rs 5,000 crore from the primary market. Divestment of state-run firms by the government may also increase the supply of paper in the market.

The government on Monday approved stake sales in state-run power producer NTPC and another unlisted power firm Satluj Jal Vidyut Nigam which reflects the country's resolve to speed up reforms and raise more resources for social schemes. On Monday, Trade Minister Anand Sharma said the Union Cabinet had approved a 5% stake sale in NTPC, and 10% in, an unlisted power producer. On Friday, 16 October 2009, Prime Minister Manmohan Singh said many state-run firms are eager to list their shares in the stock market as it would help unlock their value.

The government has approved a follow-on public offering of 20% of state run Steel Authority of India, the steel minister said on Wednesday, 21 October 2009. The Government of India owns nearly 86% of Sail.

The BSE 30-share Sensex fell 219.43 points or 1.29% to 16789.74. The Sensex rose 22.37 points at the day's high of 17,031.54 in early trade. The barometer index fell 287.91 points at the day's low of 16,721.26 in late trade.

The S&P CNX Nifty fell 75 points or 1.48% to 4,988.60. Nifty October 2009 futures were at 5,002.10, at a premium of 13.50 points as compared to the spot closing of 4,988.60. Turnover in NSE's futures & options (F&O) segment surged to Rs 86,383.23 crore from Rs 67,937 crore on Wednesday, 21 October 2009.

The market breadth, indicating the overall health of the market was weak. The breadth was positive in early trade. On BSE, 871 shares advanced as compared with 1863 that declined. A total of 79 shares remained unchanged.

BSE clocked a turnover of Rs 5776 crore, lower than Rs 6008.74 crore on Wednesday, 21 October 2009.

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

From a 17 month high of 17,326.01 on 17 October 2009, the Sensex has lost 536.27 points or 3.09% in three trading sessions to 16,789.74 on Thursday, 22 October 2009. With foreign funds making heavy purchases, the Sensex is up 7,142.43 points or 74.03% in calendar year 2009 as on 22 October 2009. From a 3-year closing low of 8,160.40 on 9 March 2009, the Sensex is up 8629.34 points or 105.74% as on 22 October 2009. FII inflow in the calendar year 2009 totaled Rs 68,084.60 crore (till 21 October 2009).

Coming back to today's trade, the BSE Mid-Cap index fell 2.12% and the BSE Small-Cap index fell 1.96%. Both the indices underperformed the Sensex.

Sectoral indices on BSE displayed mixed trend. The BSE FMCG index (down 2.06%), the BSE IT index (up 0.03%), the BSE Teck index (up 0.04%), the BSE Auto index (down 2.36%), outperformed the Sensex.

The BSE Realty index (down 4.59%), the BSE Capital Goods index (down 2.69%), the BSE Consumer Durables index (down 2.65%), the BSE Bankex (down 2.05%), the BSE Metal index (down 1.84%), the BSE Oil & Gas index (down 1.58%), the BSE Power index (down 1.47%), the BSE Healthcare index (down 1.468%), the BSE PSU index (down 1.37%), underperformed the Sensex.

Index heavyweight Reliance Industries fell 2.24% to Rs 2133.55 after a lawyer for the firm said company he will conclude initial arguments before the Supreme Court in a gas-pricing dispute with Reliance Natural Resources by 29 October 2009.

Reliance Industries is importing liquefied natural gas at about $9 per million metric British Thermal Unit, to power its refinery in west India, executive director PMS Prasad told reporters on Thursday, 22 October 2009, outside the country's top court.

Mukesh Ambani-controlled Reliance Industries, India's top conglomerate, is fighting with Reliance Natural Resources, led by younger brother Anil Ambani, over the terms of a deal to sell gas to Reliance Natural at below the price set by the government. Reliance Industries has been presenting initial arguments in the case before the Supreme Court since Tuesday, saying the private deal between the Ambani brothers is not binding on the company, and it can sell the gas only at the government-approved price.

The government, which has the power to decide who can buy gas and at what price, had filed an application asserting it is the rightful owner of the disputed gas.

Oil exploration stocks rose as crude oil futures prices settled above $81 a barrel Wednesday for the first time in a year, propelled by weakness in the dollar and tightening US inventories. Rise in crude oil prices would result in higher realizations from crude sales for oil exploration firms.

Cairn India rose 1.07%. UK-based oil and gas exploration major Cairn Energy Plc recently mopped up $240 million by selling 2.3% in its Indian subsidiary Cairn India to Malaysia's Petronas International Corporation.

With this move, Petronas' stake in Cairn India jumps to 14.94%, within touching distance of an open offer trigger. Cairn UK now retains a 62.75% interest in Cairn India, which made a major oil discovery (Mangala) in Rajasthan in the north west of India in 2004. Cairn India, the Indian arm of the UK firm, has interests in a total of 13 acreage blocks in India and Sri Lanka.

India's second biggest state-run oil exploration firm by revenue Oil India was flat. India's biggest state-run oil exploration firm by revenue Oil & Natural Gas Corporation (ONGC) fell 0.54%. ONGC has bagged over a third of the 70 blocks offered under the government's eighth New Exploration Licensing Policy (NELP 8), amid luke-warm response towards the bidding round. ONGC bid for 25 blocks and was awarded 11 offshore and two onshore concessions.

Nearly half of 70 blocks offered under NELP 8 found no bidder, with 76 bids submitted for 36 exploration blocks, D.N. Narasimha Raju, joint secretary in the oil ministry said on Monday.

PSU OMCs fell as rise in crude oil prices will increase under recoveries on domestic sale of petrol, diesel, kerosene and LPG at controlled prices HPCL, BPCL, Indian Oil Corporation (IOC) fell by between 0.01% to 0.92%.

Govinda Rao, a member of the Prime Minister's Economic Advisory Council on Wednesday said there is no need to raise fuel prices, if global oil prices remain in the range of $70 to $75 a barrel. Rao said the government expects international crude oil prices to hover around $70 to $75 per barrel. If prices go beyond that consistently, then the numbers will have to change, Rao said.

Jaiprakash Associates fell 6.84% even as net profit rose 327.9% to Rs 870.19 crore on 53% rise in sales to Rs 1824.26 crore in Q2 September 2009 over Q2 September 2008. The company announced result after market hours on Wednesday. The company also announced 1:2 bonus issue.

India's largest engineering and construction firm by sales Larsen & Toubro fell 3.86% on muted sales growth in Q2 September 2009. L&T's net profit rose 26.1% to Rs 580.4o crore on 3.54% rise in total income to Rs 8136.39 crore in Q2 September 2009 over Q2 September 2008. The result hit the market during trading hours today.

L&T attributed the muted sales growth to delay in clearances of infrastructure projects from some clients and lower offtake of industrial and machinery products. The company said order backlog is at Rs 81623 crore, which is 2.4 times its revenue of Rs 33926.37 crore in the year ended March 2009, giving strong revenue visibility.

The company is likely to see order inflows rise over 30% in 2009/10 and sales rise of 15%, Chief Financial Officer Y.M. Deosthalee said on Thursday at the time of announcing Q2 results.

L&T said the recent surge in crude oil prices may boost orders from the hydrocarbon sector. The company said revival of infrastructure development in the Gulf augurs well as the company has a significant presence in the region.

India's largest power maker by sales Bharat Heavy Electricals fell 0.9%. Strong project execution, fall in input costs and lower employee costs are seen driving growth in Bhel's top line and bottom line in Q2 September 2009. Metal prices were sharply on year on year basis which will help boost margins of the power equipment major. Further, Bhel had provided Rs 116 crore for wage hike provisions in Q2 September 2008 which had pulled down profit in that quarter. The margins will rise with no such provision in Q2 September 2009.

A total of seven brokerages expect a between 10.8% to 32.4% growth in Bhel's net profit at between Rs 681.50 crore to Rs 815.40 crore in Q2 September 2009 over Q2 September 2008. Their expectations peg a between 24.8% to 28% growth in revenue at between Rs 6667.70 crore to Rs 6838.60 crore in Q2 September 2009 over Q2 September 2008. Bhel unveils Q2 September 2009 results on Friday, 23 October 2009.

Among other capital goods stocks, Thermax, BEML, Praj Industries and Punj Lloyd fell by between 1.13% to 4.56%.

Realty stocks fell on profit taking. Indiabulls Real Estate, Omaxe, Ansal Properties, Unitech, DLF fell by between 1.92% to 5.42%.

Realty stocks have risen sharply in the past few days on reports that 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. The housing market had slumped last year amid a global credit crunch and buyers fearing job losses.

Bank stocks fell for second straight day on concern a proposed new interest rate system will intensify competition among lenders. A Reserve Bank of India (RBI) panel on Tuesday proposed a transparent pricing structure for floating rate loans wherein benchmark rates get automatically revised on shrinking cost of funds. India's largest private sector bank by net profit ICICI Bank fell 4.08% as its ADR fell 4% on Wednesday. The bank recently reduced auto loan rates by 50 basis points.

India's largest bank by branch network State Bank of India fell 2.5%. SBI has reportedly raised $750 million (around Rs 3500 crore) in the overseas market through five-year bonds as part of its medium-term note programme (MTN). SBI's $5 billion MTN programme was launched in 2004. It targets investors, including banks, insurance companies, hedge funds and private equities in the global market.

State Bank of India has got the finance ministry's clearance to start talks to merge its subsidiary, State Bank of Indore, with itself.

But, India's second largest private sector bank by net profit HDFC Bank rose 0.39% even as its ADR fell 3.35% on Wednesday. The bank's net profit rose 30.2% to Rs 687.46 crore in Q2 September 2009 over Q2 September 2008. The results, which hit the market last week, were more or less in line with market expectations.

The committee headed by RBI executive director Deepak Mohanty has suggested discontinuing the usage of a bank's prime lending rate (PLR) as the benchmark for variable rate loans. Instead, it wants banks to arrive at a base rate that reflects the cost of one-year deposits and price loans over this base rate.

The panel has also proposed a ceiling on the extent of loans that can be granted below the benchmark rate. Most banks typically pass on the benefit of falling rates only to fresh customers. RBI governor D Subbarao has repeatedly said though the central bank has slashed its repo rate (at which it lends to banks) by 425 basis points in the last one year, prime lending rates of banks have fallen by only around 200 basis points.

Lenders currently offer loans at less than the benchmark prime lending rate to about 10 categories of borrowers, according to the central bank. Some of these loans are at rates that don't "make much commercial sense" for the banks, according to the report.

Meanwhile, the central bank may hike the ceiling on the portion of government securities that banks can park in held-to-maturity (HTM) category, possibly at a quarterly monetary policy review on 27 October 2009. Banks do not have to make any mark-to-market provisions on securities held this basket if prices of securities fall. Provisions have to be made out of profit and therefore, impact a bank's bottom line. Yields on ten-year government bonds have risen sharply this year. Bond prices and bond yields are inversely related.

Indian banks can put bonds equal to 25% of the value of deposits in their HTM accounts. The market expectations is for an increase in the ceiling by up to 2 percentage points.

Global rating agency Moody's on Wednesday assigned moderate credit risk rating to 13 Indian commercial banks, including the country's largest public sector lender State Bank of India and private entity ICICI Bank. The agency has given the supported ratings an assessment of the government's ability to support the banks to the 13 entities, following the review of systemic support for individual banking systems. Moody's Investor Service in a statement said it has changed the systemic support input for Indian banks' ratings to Baa2 from the A1 local currency deposit ceiling. Baa2 generally refers to moderate credit risk.

The RBI in its report on trend and progress of banking in India for 2008/09 released today, 22 October 2009, said it needs to assess and initiate measures to raise the capital base of state-run banks. The central bank said off-balance sheet exposures of local banks declined by 26% in 2008/09, but it was necessary to monitor and evaluate risks from such exposure

India's largest dedicated housing finance firm HDFC fell 0.55%. HDFC, last week, announced its net profit rose 24.27% to Rs 663.94 crore in Q2 September 2009 over Q2 September 2008. The results beat market expectations.

Metal stocks fell on profit taking. Tata Steel, National Aluminum Company, Hindalco Industries fell by between 0.68% to 2.16%.

India's largest copper maker by sales Sterlite Industries fell 0.9%. The company, last week, raised $500 million in convertible senior notes and plans to use the proceeds primarily for expansion of its copper business. The notes are convertible into American depositary shares at $23.33 per share.

Steel Authority of India (Sail) fell 4.12% after the steel minister on Wednesday said the government has approved a follow-on public offering of 20%. The government holds 85.82% stake in Sail.

Hindutan Zinc fell 1.6% after net profit declined 2.55% to Rs 934.95 crore in Q2 September 2009 over Q2 September 2008. The result hit the market during trading hours

India's largest thermal power producer by sales NTPC fell 1.5%. The government on Monday approved a 5% stake sale in NTPC.

Among other power stocks, Reliance Power, Tata Power Company, Reliance Infrastructure fell by between 0.82% to 3.1%.

Ultratech Cement fell 3.58% after the company issued a cautious outlook at the time of announcing Q2 results late last week. Net profit jumped 53% to Rs 251 crore in Q2 September 2009 over Q2 September 2008.

UltraTech said the performance was affected on a sequential basis due to lower demand in Southern India. The net profit dropped 39.94% to Rs 250.90 crore in Q2 September 2009 over Q1 June 2009.

The company said the cement demand may grow 9% in the year ending March 2010 on the back of government's initiative to boost rural development, infrastructure and housing. It, however, said new capacities which at various stages of implementation will result in pressure on margins.

The company said its focus on higher volume growth, captive power generation and capital productivity will help offset the impact of lower prices on margins.

Among other cement stocks, ACC, Grasim Industries, and Ambuja Cements, fell by between 0.64% to 2.78%.

Auto stocks fell on profit taking. India's top small car maker by sales Maruti Suzuki India fell 1.23%. The company's total sales rose 17.3% to 83,306 vehicles in September 2009 over September 2008. The figures were released during trading hours on 1 October 2009.

India's largest truck maker by sales Tata Motors fell 3.61%. Tata Motors said it may undertake a preemptive check on the 7,500-odd Nanos that have been delivered till date after a faulty combination switch in the world's cheapest car resulted in fires in at least three cases across the country. Three cases of fire in the car had been reported in the past few days in Delhi, Lucknow and Ahmedabad.

Bajaj Auto fell 1.16%. Bajaj Auto's net profit jumped 117.85% to Rs 402.83 crore in Q2 September 2009 over Q2 September 2008. The company announced the Q2 results during trading hours on 15 October 2009.

Hero Honda Motors fell 0.45% even as net profit jumped 95% to Rs 597.14 crore on 26.8% rise in revenue to Rs 4059.44 crore in Q2 September 2009 over Q2 September 2008. The company announced result after market hours on Wednesday.

But, India's largest tractor maker by sales Mahindra & Mahindra rose 1.07%. Total sales rose 10.94% to 28434 vehicles in September 2009 over September 2008. The company unveiled the sales figures during trading hours on 1 October 2009.

Total domestic automobile sales in the country in the first half of the financial year 2009-10 rose by 14.51% year-on-year to 57,82,920 units, according to automobile sales figures released by the Society of Indian Automobile Manufacturers (Siam). The jump in sales for the April-September period came from the double-digit growth posted by the passenger vehicle segment (comprising cars and sports utility vehicles) which grew by 13.46%, by the 15.68% spurt in two-wheeler sales and by an increase of 12.37% in sales of three-wheelers.

IT stocks fell on profit taking. India's largest software services exporter TCS fell 0.94%. The company after market hours on 16 October 2009, reported stronger-than-expected Q2 September 2009 results. Consolidated net profit as per US accounting standards rose 6.81% to Rs 1623.90 crore on 3.16% growth in revenue to Rs 7435.10 crore in Q2 September 2009 over Q1 June 2009.

TCS has a good business pipeline and is pursuing 20 to 25 large outsourcing deals, chief executive N. Chandrasekaran said at the time of announcing Q2 results. The management is seeing signs of recovery but it believes it will be slow. The discretionary spent is still tight but there is spent seen in banking, finance services and insurance (BFSI), retail, utility and pharma verticals, TCS said at a conference call after the results. However, a continuous improvement in volumes cannot be expected, it said. The company is seeing stability in demand environment. The management expects to maintain margins at current levels provided there is no adverse rupee movement.

India's third largest software services exporter Wipro fell 1.71% as its ADR fell 0.84% on Wednesday.

But, IT bellwether Infosys Technologies rose 2.13% even as its ADR fell 0.56% on Wednesday. Infosys raised its earnings and revenue guidance in both dollar and rupee terms for the year ending March 2010 (FY 2010) at the time of announcing Q2 September 2009 results before trading hour on 9 October 2009. Infosys, however, said strengthening rupee is a big concern for its earnings.

The partially convertible rupee tumbled to 46.71/46.74 per dollar, from Wednesday's close of 46.485/495. A weak rupee boosts revenues of IT firms in rupee terms as the sector earns a lion's share of revenue from exports.

India's largest cigarette maker by sales ITC rose 1.58% ahead of its Q2 results on Friday, 23 October 2009. Higher volumes and price hike in the mainstay cigarette business is seen driving bottom line and top line growth of ITC in Q2 September 2009. However, the hotels business was hit by swine flue and margins of the FMCG business were under pressure due to higher sugar and wheat prices.

A total of five brokerages expect a between 8.3% to 19.2% growth in ITC's net profit at between Rs 869.50 crore to Rs 956.50 crore in Q2 September 2009 over Q2 September 2008. Their expectations peg a between 6% to 10.8% growth in sales at between Rs 3989.10 crore to Rs 4170.10 crore in Q2 September 2009 over Q2 September 2008.

Telecom stocks rose after finance secretary Ashok Chawla said on Tuesday the auctions for the 3G spectrum would take place by December this year. India's largest mobile services provider by market share Bharti Airtel rose 1.2%.

The Department of Telecommunications had earlier said that the auction would start from 7 December 2009, though there are apprehensions about the date since the defence forces are yet to vacate spectrum. The auction has already been postponed several times. With the availability of 3G spectrum, telecom companies are expected to offer a combined mobile and internet platforms.

India's second largest mobile services provider by sales Reliance Communications (RCom) rose 0.32%. Chairman Anil Ambani, last week, alleged that there is a 'vicious and malafide' campaign against his telecom company Reliance Communications by a 'known rival group' and dubbed the special audit report, which claimed that RCom was mis-stating its revenues as 'biased and prejudiced'. But the auditor, Parekh & Co defended its work and also denied a claim by Mr Ambani that it had not sought feedback from RCom.

Meanwhile, the central investigating agency Central Bureau of Investigation (CBI) is reportedly conducting a search in the offices of the telecoms ministry to probe the manner in which wireless radio spectrum was given to telecommunications firms. The ministry had awarded several new telecom licences in 2008.

Sugar stocks extended Wednesday's losses triggered by the government's decision that day to extend tax free white sugar imports till December 2010 to improve supplies to tide over a shortage. Dhampur Sugars, Bajaj Hindustan, Shree Renuka Sugars fell by between 0.54% to 1.23%.

Cals Refineries clocked highest volume of 2.66 crore shares on BSE. KSK Energy Ventures (2 crore shares), Unitech (1.05 crore shares), Ispat Industries (1.04 crore shares) and GVK Power & Infrastructure (1.01 crore shares) were the other volume toppers in that order.

KSK Energy Ventures clocked highest turnover of Rs 414.60 crore on BSE. Housing Development & Infrastructure (Rs 202.41 crore), DLF (Rs 168.81 crore), Jaiprakash Associates (Rs 148.55 crore) and Larsen & Toubro (Rs 136.28 crore) were the other turnover toppers in that order.