Sensex hits near 1-1/2 month closing low

The key benchmark indices drifted lower in a volatile session of trade today as the dollar index, which measures its performance against six other major currencies, dipped 0.1 % to 77.767, though it was still not far from a more than three-month high of 78.141 hit on Friday. Higher advance tax figures of India Inc for the third quarter capped the decline. The BSE Sensex fell 118.63 points or 0.71% to 16601.20 off close to 150 points from the day's high and up close to 25 points from the day's low.

Realty, metal, auto and capital goods stocks fell. India's largest private sector firm by market capitalisation Reliance Industries (RIL) edged higher in volatile trade. European stocks were trading higher. The market breadth turned negative from the strong breadth in early trade.

The market was volatile. The market edged lower in early trade on weak Asian stocks. The market cut losses after hitting fresh intraday low in morning trade. The market moved between positive and negative zone near the flat line in early afternoon trade. The market weakened once again in afternoon trade. Market slumped to hit fresh day's low in late trade.

As per reports, Indian firms paid 24% more in advance tax for the October-December 2009 year-on-year, suggesting higher profit growth as economic recovery picked up pace. Top 100 firms' advance tax payments were up more than 30% in the December 2009 quarter.

The country's corporate advance tax had fallen by 3.7% in the June 2009 quarter, but grew by 14.7% in the September 2009 quarter due to a strong recovery in banking, auto, and consumer durable sectors.

Emerging-market equity funds took in $571.4 million in the week ended 16 December 2009, a slower pace of inflows than that seen earlier in the year, according to the latest data from fund-tracker EPFR Global. Still, inflows into developing world stock funds have now surpassed $75 billion for calendar year 2009, well beyond the previous record of $54 billion set in 2007.

Diversified global emerging markets funds soaked up $404 million and Asia funds, excluding Japan, posted net inflows of $301 million. India equity funds took in $64 million on the week, putting their intake for the year, ahead of the previous record of $3.4 billion in 2005.

Finance Secretary Ashok Chawla said today there are no plans for any additional borrowing this year and added that not much can be done about food price inflation with steps including monetary policy.

Inflationary expectations in India will die out soon, Kaushik Basu, chief economic adviser to the finance ministry, said on Monday.He added that inflation in India was sector-specific, present in food prices, and would therefore need sectoral intervention.

Reserve Bank of India (RBI) governor Duvvuri Subbarao on Friday said he discussed the country's macroeconomic situation with Finance Minister Pranab Mukherjee. Data last week showed that food prices surged an annual 20% in early December as this year's poor monsoon hit crops. The Reserve Bank of India's next scheduled policy review is at the end of January, but it can change policy settings at any time.

The central bank has said a rate rise risked complicating policy as it could attract more capital flows, which would add to money circulating in the economy and fuel price pressures.

In a report to parliament on Friday, the finance ministry said pressure on food prices was likely to continue, and food imports could help stem price rises. It also said a surge in capital inflows could lead to an inflationary spiral. The ministry said strong growth in the September quarter opened up the possibility that the economy could grow more than 7.75%, the top of the current forecast range, in the fiscal year to March 2010.

"Government is monitoring (the) price situation on (a) regular basis and containment of inflation is high on its agenda," Mukherjee said in a written reply to a lawmaker's question.

Meanwhile, companies planning to list may reportedly have to ensure that at least a quarter of their total equity lies with the public, as the government sets about its stated mission to ensure that investors get a wider selection of stocks to choose from. Under the proposed plan, already listed companies will be required to divest at least 5% stake every year from 2010 to reach the prescribed threshold. Under the current rules, companies have the option to go public with 10% or 25% equity dilution. The government is scrapping the rules allowing companies to go for IPO with 10% dilution.

Dubai, which faces more debt maturities in 2010, may receive more aid from either the United Arab Emirates federal government or wealthy fellow member, Abu Dhabi, the UAE's economy minister said on Monday.

European shares rose on Monday as banks recovered from concerns over tougher capital regulations and London Stock Exchange gained on acquiring rival trading platform. The key benchmark indices in France, Germany and UK rose by between 0.7% to 0.97%.

Most Asian stocks fell on Monday in subdued holiday-thinned trade. The key benchmark indices in South Korea, Hong Kong, Indonesia and Singapore were down by between 0.17% to 3.12%. But, the key benchmark indices in China, Japan, and Taiwan rose by between 0.29% to 0.43%.

Japan's exports fell at the slowest pace in 14 months in November 2009 as demand from Asia supported the nation's recovery from its worst postwar recession. Shipments abroad slid 6.2% from a year earlier, the smallest drop since September 2008, the Finance Ministry said today in Tokyo.

China's government will aim for economic growth of about 8% in 2010, even as it faces a tougher time boosting domestic consumption as a driver of growth, its industry minister said on Monday.

Trading in US index futures indicated Dow could gain 20 points at the opening bell on Monday, 21 December 2009.

US markets ended with moderate gains on Friday 18 December 2009. The Nasdaq, which consists mostly of technology stocks, rallied post better quarterly performance from Oracle and Research in Motion (RIM). The gains in Dow and S&P got curbed by rise in the dollar index.

Oracle's Q2FY10 net profit went up 12.31% to $ 1.46 billion from $1.3 billion in the same quarter of previous year. Its sales increased to $5.9 billion from $ 5.6 billion. RIM's Q3 net income increased 58.57% to $ 628.4 million as against $ 396.3 million in the same period of previous year. It has reported revenues of $ 3.92 billion for the quarter ended November 28 versus $ 2.78 billion (YoY).

The Dow Jones Industrial Average rose 20.63 points, or 0.2%, to 10,328.89. The broader S&P 500 index rose 6.39 points, or 0.6%, to 1,102.47, while the Nasdaq Composite Index rose 31.64 points, or 1.5%, to 2,211.69.

The BSE Sensex fell 118.63 points or 0.71% to 16601.20 its lowest closing since 10 November 2009. The Sensex fell 142.05 points at the day's low of 16577.78 at the fag end of the trading session. The Sensex rose 31.16 points at the day's high of 16,750.99 in early trade.

The S&P CNX Nifty fell 35.10 points or 0.7% to 4,952.60 its lowest closing since 27 November 2009. Nifty December 2009 futures were at 4,940, at a discount of 12.60 points as compared to the spot closing of 4,952.60. Turnover in NSE's futures & options (F&O) segment was Rs 70,627.77 crore, lower than Rs 71,436.59 crore on Friday, 18 December 2009.

The market breadth, indicating the overall health of the market turned weak from the strong breadth earlier in the day. On BSE, 1214 shares advanced as compared with 1573 that declined. A total of 91 shares remained unchanged.

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

BSE clocked a turnover of Rs 3859 crore lower than Rs 4584.57 crore on Friday, 18 December 2009.

A deluge of global liquidity has boosted stocks across the globe this year. Governments and central banks around the world have injected trillions of dollars in the past one year to pull the world out of a most severe recession since the 1930s Great Depression. The Sensex is up 6953.89 points or 72.08% in calendar year 2009, as on 21 December 2009. From a 3-year closing low of 8,160.40 on 9 March 2009, the Sensex is up 8440.80 points or 103.43% as on 21 December 2009.

Coming back to today's trade, the BSE Mid-Cap index fell 0.46% and the BSE Small-cap index fell 0.15% Both the indices outperformed the Sensex.

The sectoral indices on BSE showed a mixed trend. The BSE Consumer Durables index (up 1.3%), the BSE Oil & Gas index (up 0.17%), the BSE Bankex (up 0.1%), the BSE PSU index (down 0.22 %), the BSE IT index (down 0.36%), the BSE Teck index (down 0.55%), the BSE FMCG index (down 0.58%), the BSE Power index (down 0.6%), outperformed the Sensex.

The BSE Capital Goods index (down 1.63%), the BSE Metal index (down 1.59%), the BSE Auto index (down 1.51%), the BSE Realty index (down 1.2%), the BSE Healthcare index (down 0.85%), underperformed the Sensex.

India's largest private sector firm by market capitalisation Reliance Industries (RIL) rose 0.6% to Rs 1016.55 as RIL's Q3 advance tax payment rose 82.89% to Rs 834 crore. The stock was volatile. It hit a high of Rs 1034.75 and a low of Rs 990 so far in the day. The RIL stock had declined in early trade on reports the stock market regulator Securities and Exchange Board of India (Sebi) has asked the government to consider appropriate action against RIL for allegedly routing funds to dummy companies for buying large quantity of its shares in 2000.

Meanwhile, the Supreme Court on Friday 18 December 2009 reserved its verdict on the gas supply dispute between Reliance Natural Resources (RNRL) and Reliance Industries (RIL) after the conclusion of arguments in the case. The hearing on the case was spread over 26 days since its commencement on 20 October 2009. In the last day of the arguments, the government again staked its claim over the title or ownership of the KG basin gas fields. The bench has been hearing the dispute over the supply of 28 million units of gas for 17 years at $2.34 per unit to RNRL from the gas fields of Krishna-Godavari basin.

India's largest engineering and construction firm by sales Larsen & Toubro fell 2.38% as the company's Q3 advance tax decline 13.46% to Rs 270.crore.

India's largest power equipment maker by sales, Bharat Heavy Electricals (Bhel), fell 1.36% after the company's Q3 advance tax fell 21.88% to Rs 500 crore. Meanwhile, Bhel today said it had got orders worth Rs 640 crore.

Auto stocks fell on profit taking. India's top tractor marker by sales Mahindra & Mahindra (M&M) fell 3.2%. The company paid Rs 195 crore as advance tax in third quarter versus Rs 4.5 crore same quarter last year. M&M has forayed into the aerospace business by acquiring majority stakes in two Australian companies, Aerostaff Australia and Gippsland Aeronautics. Mahindra Aerospace (MAPL), in which Kotak Private Equity has also invested Rs 150 crore, will hold 75% stake in each of the two Aussie companies. The remaining will be held by the existing managements. The payments will be made in installments.

India's largest small car maker by sales Maruti Suzuki India fell 1.55% extending recent losses. The company's Q3 advance tax rose 196.3% to Rs 400 crore. Suzuki Motor Corp and Volkswagen AG will start detailed discussions over joint projects after 10 January 2010, Suzuki CEO Osamu Suzuki said on Wednesday. Japan's Suzuki Motor said on 9 December 2009 it will sell a 19.9% stake to Volkswagen (VW) for $2.5 billion and use half the proceeds to buy shares in the German automaker, as the two firms form a formidable force in the auto industry. Japan's Suzuki has a 54.2% stake in Maruti Suzuki India.

Maruti's total vehicle sales spurted 66.60% to 87,807 units in November 2009 over November 2008. Domestic sales spurted 60.10% to 76,359 units, while exports surged 128.60% to 11,448 units in November 2009 over November 2008.

India's second largest bike maker by sales Bajaj Auto fell 1.88%. Bajaj Auto will reportedly stop producing scooters by March 2010 to focus on motorcycles.

Bajaj Auto on 9 December 2009 launched a 135 cc Pulsar, pushing the Pulsar brand into the mass segment. Bajaj expects a sell a minimum 30,000 units per month of the new Pulsar model. The automaker had recently refreshed the entire Pulsar lineup and expects total Pulsar sales to cross 80,000 units per month.

The company's total vehicle sales rose 73% to 2.76 lakh units in November 2009 over November 2008. Motorcycles sales jumped 84% to 2.42 lakh units.

India's largest motorcycle maker by sales Hero Honda Motors fell 0.32%. The company's Q3 advance tax rose 44.1% to Rs 213 crore. The company's total vehicle sales jumped 32% to 3.81 lakh units in November 2009 over November 2008.

India's top truck maker by sales Tata Motors fell 0.88% after 3.16% jump on Friday after the company on Thursday reported a 62% jump in its total global sales in November 2009 to 75,775 units. The company paid Rs 100 crore as advance tax in third quarter versus Nil same quarter last year.

Car sales in India rose an annual 61% to 1,33,687 in November 2009 over November 2008, boosted by improved consumer sentiment, easier availability of loans and a low sales base a year earlier, an industry body said on Tuesday. Sales of trucks and buses, a gauge of economic activity, doubled to 40,847 units in November from 20,631 a year earlier, data from the Society of Indian Automobile Manufacturers showed.

Realty stocks fell on profit taking. Indiabulls Real Estate, Phoenix Mills, Unitech and Omaxe fell by between 0.16% to 2.12%.

India's largest realty player by market capitalization DLF fell 2.15% extending recent fall. DLF recently announced a merger of its commercial realty arm DLF Assets (DAL) with itself, a move aimed at repaying some of DAL's debt. The new structure involves the merger of DLF subsidiary DLF Cyber City Developers with Caraf Builders and Constructions, which is the holding company of DAL. The valuation ratio approved by the board for Cyber City and Caraf is in the ratio of 60:40.

This means that DLF shareholders will have access to 60% and promoters to 40% of the merged entity. However, this will be a cashless transaction. DLF sells commercial property to DAL, which is controlled by KP Singh who owns 78% in the latter along with his son and DLF promoter Rajeev Singh. DAL buys commercial property from DLF and collects lease rentals from it. With this merger, the debt on DLF's books would be an additional Rs 2,460 crore.

Metal stocks fell on profit taking. Sterlite Industries, Hindustan Zinc, Steel Authority of India, National Aluminum Company fell by between 0.61% to 4.1%.

India's largest steel maker by sales Tata Steel fell 1.36%. The company's Q3 advance tax rose 160% to 650 crore. The company's European unit Corus secured a 350 million euro contract to supply rails tracks to French railway operator SNCF.

India's largest mobile services provider by sales Bharti Airtel fell 2.21%. The company's Q3 advance was a Rs 272 crore compared to Rs 5.5 crore last year.

Among other telecom stocks, Reliance Communications and Spice Communications fell by between 1.39% to 1.69%.

India's largest drug maker by sales Ranbaxy Laboratories fell 0.45% even after the company on Monday said it will launch hypertension drug olmesartan medoxomil developed by the company's parent, Daiichi Sankyo in six African countries.

IT stocks rose on good results from Oracle and Research in Motion (RIM). India's third largest software services exporter Wipro rose 0.59% as its ADR rose 3.26% on Friday. India's largest IT exporter by sales Tata Consultancy Services rose 0.74%. The company's Q3 advance tax surged 37.21% to Rs 177 crore.

But, India's second largest software services exporter Infosys Technologies fell 0.72% even as its ADR rose 0.72% on Friday. The company's Q3 advance tax surged 166.7% to Rs 400 crore. Infosys Technologies expects revenue growth in the fiscal year starting in April to be better than 2009/10 as a recovery in the global economy spurs investments by its clients, Subhash Dhar, senior vice-president and head of global sales and marketing said recently.

Cement stocks fell on profit taking. ACC fell 0.91%. Among other cement stocks, Ultratech Cements, Birla Corporation and Ambuja Cements, fell by between 0.88% to 2.26%.

Cement prices are reportedly seen hardening in the January-March 2010 quarter as demand from state projects picks up and rural housing drives volume growth. Prices went up by Rs 8-10 for a 50 kg bag southern India late November to Rs 155-175, while a similar hike in Mumbai on 2 December 2009 raised prices to Rs 240-245 per bag.

India's largest thermal power generator by sales NTPC rose 0.53%. The company's Q3 advance tax payment rose 67.93% to Rs 1078 crore. As per reports the government plans to mop up around Rs 11,000 crore from the disinvestment of 5% stake in the utility giant.

But, other power stocks fell, Reliance Power, Reliance Infrastructure, Tata Power Company fell by between 0.17% to 0.76%.

Banking shares reversed early losses on bargain hunting. Banking stocks drifted lower in pat few days on a likely monetary tightening by the RBI. India's largest private sector bank by net profit ICICI Bank rose 0.17%. The bank's Q3 advance tax fell to Rs 301 crore from Rs 625 crore. ICICI Bank has launched a home-loan scheme under which 8.25% interest rate will be fixed for the first two years. The floating rates will apply after 2 years. These rates will be applicable to loans sanctioned between December 2009 and January 2010.

India's largest bank by net profit and branch network State Bank of India rose 0.1%. The state-run bank paid advance tax of Rs 1795 crore versus Rs 1700 crore.

But, India's second largest private sector bank by net profit HDFC Bank fell 0.63% as its ADR fell 0.38% on Friday. The bank's Q3 advance tax jumped to Rs 400 crore from Rs 300 crore.

Cals Refineries clocked the highest volume of 2.31 crore shares on BSE. Austral Coke & Projects (1.81 crore shares), Dish TV (1.1 crore shares), Unitech (1.05 crore shares) and Suzlon Energy (0.67 crore shares) were the other volume toppers in that order.

Reliance Industries clocked the highest turnover of Rs 158.33 crore on BSE. Tata Steel (Rs 100.03 crore), Havells India (Rs 90.25 crore), State Bank of India (Rs 85.80 crore) and ICICI Bank (Rs 93.96 crore) were the other turnover toppers in that order.