Sensex, Nifty attain 19-month closing high

Key benchmark indices extended gains for the third straight day on buying in index pivotals. However, volatility ruled the roost with indices seeing choppy swings in intraday trade. The 50-unit S&P CNX Nifty and the barometer index BSE Sensex, both attained their highest closing levels in 19-months. The Sensex jumped 129.50 points or 0.75%, up 162.52 points from the day's low but off 53.08 points from the day's high. Global cues were positive with European and Asian stocks logging gains.

On Wednesday, 23 December 2009, a 'Santa Claus' rally took the BSE Sensex up by 539 points to 17,231, mainly on the back of a Rs 770-crore net buying by foreign funds. The Santa Claus rally is traditionally a modest rally that occurs in the last five trading days of December and the first two trading days of January.

Intraday volatility was high as traders rolled over positions in the derivatives segment from December 2009 series to January 2010 series ahead of the expiry of the near month December 2009 contracts next week. The market edged higher in early trade on firm Asian stocks. The rally soon fizzled out as the Sensex slipped into the red. The market regained positive zone later. The market moved in a narrow range in afternoon trade. The Sensex hit a fresh intraday low in afternoon trade. The market staged a strong rebound in mid-afternoon trade. The market pared gains later

India VIX, a volatility index based on the S&P CNX Nifty index option prices, extended a recent steep slide. It declined 4.82% to 22.69. India VIX is a measure of the market's expectation of volatility over the next 30 calendar days.

India's infrastructure sector grew an annual 5.3% in November 2009, Trade Minister Anand Sharma said on Thursday. Infrastructure sector output grew 3.5% in October 2009 from a year earlier. The sector accounts for 26.7% of the country's industrial output.

Food price index rose 18.65% in the 12 months to 12 December 2009, data released by the government today, 24 December 2009, showed. The primary article index jumped 14.66% and the fuel price index rose 3.95%. The worst monsoon in nearly four decades and flooding in some parts of the country have pushed up food prices.

The market breadth was strong. Auto stocks were at the forefront of today's rally with Tata Motors striking a 52-week high. NTPC reversed early losses to settle with an around 1% gain. Metal and realty stocks also chipped in with gains.

The market remains closed for four days in a row from Friday, 25 December 2009 to Monday, 28 December 2009. The market remains closed on Friday, 25 December 2009 on account of Christmas. It remains closed on Monday, 28 December 2009 on account of Moharram.

Finance Minister Pranab Mukherjee said on Wednesday that containing inflation and cutting fiscal deficit are the major challenges for the government in the short-to-medium term. Mukherjee added that the government is open to altering the proposed draft direct tax code further informing that sustaining high economic growth remains a priority for the government. The Indian economy can grow at 7.75% in the fiscal year ending March 2010, the Finance Minister said. He also told an industry conference in New Delhi that agriculture output must grow 4% for the economy to expand 9-10% annually.

The government will wait until the February 2010 budget to consider withdrawing some of the fiscal stimulus measures, the Finance Minister said. Growth outlook for the second half of FY 2010 looks better, he added.

Meanwhile, the latest data showed that corporate advance tax payments for the October-December 2009 quarter shot up sharply, suggesting a higher profit growth in corporate sector in the third quarter (October-December) of the current fiscal. Corporate advance tax payments for the quarter were up 44% to Rs 48,300 crore against a 3.7% decline in April-June quarter and a 14.7% increase in July-September quarter. The company-wise break-up of advance tax collection suggests a broad-based recovery with automobiles, cement, metals and consumer goods, doing well.

European shares were trading firm today led by miners. France's CAC 40 index rose 0.16% while UK's FTSE 100 index rose 0.26%. The German stock market is closed on Thursday and the UK and French equity markets close early ahead of the Christmas break.

Members of the Bank of England's Monetary Policy Committee on Wednesday unanimously backed the decision earlier this month to maintain the size of the bank's asset-purchase plan at $318.7 billion, according to minutes of the committee's 9-10 December 2009 meeting released Wednesday. The panel also unanimously backed the decision to keep its key lending rate at a historic low of 0.5%.

Asian stocks rose for a third day in a row on Thursday, 24 December 2009, led by chip-related companies and commodity producers, after an index of semiconductor prices climbed to its highest level in almost six weeks and as oil and metals rallied. Key benchmark indices in Hong Kong, China, Japan, South Korea and Taiwan, were up by between 0.79% and 2.59%. However Singapore's Straits Times was down 0.14%.

Japan's Nikkei average hit its highest in three months on Thursday, lifted by high-tech exporters on a weaker yen and after better-than-expected earnings from US peers buoyed Wall Street.

Bank of Japan (BOJ) Governor Masaaki Shirakawa today said the central bank will act promptly and decisively if financial markets destabilise. Shirakawa also repeated that weak final demand was the root cause of deflation, and that the BOJ will maintain easy monetary policy to beat sustained price falls. He made the remarks at meeting of Nippon Keidanren, Japan's top business lobby.

Taiwan's industrial production index for November rose 31.46% year-on-year, growing for the third consecutive month. According to the data released by the Ministry of Economic Affairs (MOEA), the industrial production index stood at 108.78 in November, representing the highest year-on-year growth since August 1978, an increase that the MOEA attributed to the low base last year and the recovery of the global economy.

The People's Bank of China (PBOC) said Wednesday that the economy recovery is still insufficient and that correcting structural problems for the nation's growth is urgent. The nation's economic situation is generally improving, but the internal strength of the economic recovery is still not enough, and structural contradictions still exist, making a change to the path of economic development ever more urgent, it said in a statement on its Web site, citing its fourth-quarter Monetary Policy Committee. The PBOC added it will seek to keep policy flexible and will focus on decreasing economic volatility and manage the pace of loan growth.

The Xinhua news agency on Thursday quoted Commerce Minister Chen Deming as saying China's retail sales will grow more than 15% in 2009, latest sign that the economy is on a brisk recovery path.

Wall Street ended higher on Wednesday after a dull start with weaker dollar helping stocks stage a late comeback. The Dow Jones Industrial Average rose 1.51 points, or 0.01%, to 10,466.44. The Standard & Poor's 500 index rose 2.57 points, or 0.2%, to 1,120.59, while the Nasdaq Composite Index added 16.97 points, or 0.8%, to 2,269.64.

In key economic data, new home sales tumbled 11.3% in November 2009, raising the specter that previous positive signs in the industry were the result of government stimulus and not sustainable.

Trading in US index futures showed the Dow could rise 25 points at the opening bell on Thursday, 24 December 2009

US Treasury Secretary Timothy Geithner said on Wednesday that the economy was recovering, but it may be some months yet before jobs are being created instead of lost. There were dramatically fewer job losses in November than expected, when employers cut payrolls by 11,000. But the unemployment rate still is 10% and Geithner said regaining positive job creation was vital for recovery.

Geithner said the financial crisis that began in late 2007, driving the country into a deep recession, had taken a heavy toll on Americans' optimism. But Geithner insisted that there were signs of a return of confidence and said that will help get the economy on to a sounder footing.

Meanwhile, the US Department of the Treasury on Wednesday said that it has received repayments on its Troubled Asset Relief Program (TARP) investments in Wells Fargo and Citigroup in the sum of US$45 billion, bringing the total amount of repaid TARP funds to US$164 billion. The US Treasury now estimates that total bank repayments should exceed $175 billion by the end of 2010, cutting total taxpayer exposure to the banks by three-quarters.

The BSE 30-share Sensex was up 129.50 points or 0.75% to 17,360.61, its highest closing since 16 May 2008. The Sensex opened 34.36 points higher at 17,265.47. It gained 182.58 points at the day's high of 17,413.69 in mid-afternoon trade. The Sensex declined 33.02 points at the day's low of 17,198.09 in afternoon trade

The S&P CNX Nifty was up 33.80 points or 0.66 % to 5,178.40, its highest closing since 5 May 2008. The Nifty had struck an in intra-day high of 5197.90

Nifty December 2009 futures were at 5,177, at a discount of 1.40 points as compared to the spot closing

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 7713.51 points or 79.95% in calendar year 2009, as on 24 December 2009. From a 3-year closing low of 8,160.40 on 9 March 2009, the Sensex is up 9200.21 points or 112.74% as on 24 December 2009.

Coming back to today's trade, the market breadth, indicating the overall health of the market was positive. On BSE, 1572 shares advanced as compared with 1303 that declined. A total of 86 shares remained unchanged. The breadth was much more robust earlier in the day

The BSE Mid-Cap index rose 0.72% to 6,641.14 and the BSE Small-cap index rose 0.60% to 8,120.71. Both these indices underperformed the Sensex.

The total turnover on BSE amounted to Rs 4884 crore, lower than Rs 4982 crore on Wednesday, 23 December 2009. Turnover in NSE's futures & options (F&O) segment was Rs 84,665.29 crore, much lower than Rs 117607.57 crore on Wednesday, 23 December 2009.

All the sectoral indices on BSE showed logged gains, with the BSE Teck index ending unchanged. The BSE Metal index (up 1.42%), the BSE Oil & Gas index (up 0.90%), the BSE Power index (up 0.78%), the BSE Realty index (up 0.80%), the BSE Auto index (up 1.50%), the BSE Consumer Durables index (up 1.07%), outperformed the Sensex.

The BSE Healthcare index (up 0.03%), the BSE FMCG index (up 0.66%), the BSE PSU index (up 0.37%), the BSE Bankex (up 0.50%), the BSE IT index (up 0.33%), the BSE Capital Goods index (up 0.62%), underperformed the Sensex.

Among the 30-member Sensex pack, 25 advanced while the rest declined.

Jaiprakash Associates (down 2.08%), Wipro (down 0.39%), and ICICI Bank (down 0.11%), edged lower from the Sensex pack.

Auto stocks rose on strong sales in the month of November 2009 and higher advance tax payment in the third quarter. India's top truck maker by sales Tata Motors advanced 4.16% to Rs 778 and was the top gainer from the Sensex pack. The stock struck a 52-week high of Rs 788.85 in intra-day trade today, 24 December 2009.

The company's total global sales jumped 62% to 75,775 units in November 2009 over November 2008. The company paid Rs 100 crore as advance tax in Q3 December 2009 versus nil same quarter last year.

India's top small care maker by sales Maruti Suzuki India rose 0.29% on reports the company is expecting sales to grow by 18-20% for the fiscal year March 2010. Car sales in India have picked up since January 2009 and the sector has seen double-digit growth for the past five months, the report added.

India's top tractor marker by sales Mahindra & Mahindra (M&M) rose 1.87%.

India's largest motorcycle maker by sales Hero Honda Motors gained 1.92%. 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.

Escorts advanced 3.40% after the company said one of the promoter group companies revoked a small portion of shares which it had pledged earlier. The company made this announcement during trading hours today, 24 December 2009.

India's largest realty player by market capitalization DLF gained 0.89%. The stock extended recent gains after the company a merger of its commercial realty arm DLF Assets (DAL) with itself, a move aimed at repaying some of DAL's debt.

Rate sensitive realty shares gained as fears of an immediate hike in interest rates by the central bank receded after Planning Commission deputy chairman Montek Singh Ahluwalia said on Wednesday that the government is taking steps to control the inflation.

Indiabulls Real Estate (up 1.28%), HDIL (up 1.38%), Orbit Corporation (up 1.40%), Ansal Infrastructure (up 1.38%), gained.

Metal stocks saw an across the board rally after LMEX, a gauge of six metals traded on the London Metal Exchange, rose 1.83% on Wednesday.

India's largest non ferrous metal producer by sales Sterlite Industries India rose 0.70% after a 5.63% rally in its American depository receipt (ADR) on the New York Stock Exchange on Wednesday, 23 December 2009.

Hindalco Industries (up 3.10%), Sesa Goa (up 2.25%), Hindustan Zinc (up 3.68%), and Tata Steel (up 1.96%), edged higher

India's largest private sector firm by market capitalisation Reliance Industries (RIL) rose 0.67% to Rs 1073, extending Wednesday's 4.62% surge. The stock moved in a band of Rs 1050- 1083.60 in the day.

RIL said on Tuesday said it had made a gas discovery in one of its exploration blocks in the Krishna Godavari basin, off the country's east coast. Reliance Industries holds a 90% interest in the block, which covers an area of 3,288 square kilometres, and Hardy Exploration and Production India holds the rest.

India's largest thermal power generator by sales NTPC reversed early losses to settle with a gain of 0.96% to Rs 232.10. The stock had slipped to a day's low of Rs 225.40 in intra-day trade today on profit booking after surging 6.96% on Wednesday. As per recent reports, the government plans to mop up around Rs 11,000 crore from the disinvestment of 5% stake in the utility giant.

Oil exploration firms rose after crude oil prices surged on Wednesday, 23 December 2009. India's biggest state-run oil exploration firm by revenue Oil & Natural Gas Corporation (ONGC) rose 1.39%. India's second biggest oil and gas exploration firm by revenue, Oil India, gained 0.82%. Cairn India advanced 0.59%.

Rise in crude oil prices would result in higher realizations from crude sales for oil exploration firms. Light, sweet crude oil gained $2.27, or 3.05%, to $76.67 a barrel on the New York Mercantile Exchange on Wednesday, 23 December 2009 after US government inventory data showed a bigger than expected fall in stockpiles last week.

Telecom stocks declined on fears the ongoing tariff war may impact profitability. India's second largest listed cellular services provider by sales Reliance Communications (RCom) fell 0.23%. RCom today said it would charge 20 paise per minute for local and national long-distance calls within its network under a new bill plan.

Meanwhile, the company is reportedly seeking to bolster its wireless and enterprise business with an investment of more than Rs 6300 crore, under a plan branded as Edge 2010.

India's top listed cellular services provider by sales Bharti Airtel fell 1.29%. Citibank has reportedly sold its stake in Bharti Infratel, the telecom tower arm of Bharti Airtel, to JP Morgan, exiting without any gain from the $50 million investment it made over two years ago.

India's third largest listed cellular services provider by sales Idea Cellular dropped 2.51%

GTL Infrastructure rose 0.14% on reports the firm is buying Aircel's telecom tower business for Rs 4000 crore in an all-cash deal.

Consumer durables stocks gained on hopes higher sales in the ongoing festive season will boost profitability. Titan Industries (up 3.04%), Goldiam International (up 3.76%), Rajesh Exports (up 1.94%), gained.

FMCG shares were mixed and underperformed the Sensex on worries the steady rise in food inflation may crimp demand. Bata India (down 1.43%), Dabur India (down 0.40%), Nestle India (down 1.31%), and GlaxoSmithkline Consumer (down 1.16%), declined.

Hindustan Unilever (up 0.53%), ITC (up 0.57%), and Tata Tea (up 0.31%) though up underperformed the Sensex.

IT shares displayed mixed trend and underperformed the Sensex after weak US economic data on housing. US is the biggest market for Indian IT firms. India's third largest IT exporter by sales Wipro fell 0.39% and India's second largest software services exporter Infosys Technologies rose 0.30%. India's largest IT exporter by sales Tata Consultancy Services rose 0.34%.

Oracle Financial Solutions (down 0.62%), Hexaware Technologies (down 0.36%), and MphasiS (down 0.48%), slipped.

Rolta India gained 0.13% after the company said it has bought back foreign currency convertible bonds aggregating $15 million. The company made this announcement during trading hours today, 24 December 2009.

Polaris Software Lab rose 0.33% after the company secured a contract for one of its software products. The company announced the overseas order win before market hours today, 24 December 2009.

The partially convertible rupee was trading at 46.71/72 per dollar, stronger than its close of 46.87/88 on Wednesday. A firm rupee negatively impacts the operating margin of IT firms as the sector earns a lion's share of revenue from exports.

Construction shares rose on government's thrust on infrastructure. Hindustan Construction Company (up 6.91%), Nagarjuna Construction Company (up 3.41%), Valecha Engineering (up 2.27%), Gayatri Projects (up 1.54%), Unity Infraprojects (up 3.10%), and IVRCL Infrastructure (up 1.27%), advanced.

The government has set a target of spending $20 billion a year on road construction.

Tantia Constructions rose 0.13% after the company bagged an order worth Rs 19.50 crore from Eastern Railways, Kolkata for construction works.

Radico Khaitan jumped 2.96% on reports a joint venture of the company with Diageo has received Foreign Investment Promotion Board's nod for 100% foreign direct investment.

Jet Airways gained 1.66% after the Cabinet Committee on Economic Affairs (CCEA) today approved the company's proposal to raise $400 million through sale of shares to institutional investors.

Hanung Toys & Textiles jumped 5.48% after the company signed a pact with a US buyer for exporting home furnishings aggregating $60 million. The company announced the overseas order during trading hours today, 24 December 2009.

Cals Refineries clocked the highest volume of 2.26 crore shares on BSE followed by IFCI (1.33 crore shares), Suzlon Energy (1.18 crore shares), Austral Coke & Projects (1.11 crore shares) and NHPC (97.01 lakh shares).

Tata Steel clocked the highest turnover of Rs 210.14 crore on BSE followed by Tata Motors (Rs 123.65 crore), Zandu Pharmaceuticals (Rs 113.75 crore), Suzlon Energy (Rs 104.96 crore), and Reliance Industries (Rs 104.26 crore).