All the sectoral indices on BSE in green

The key benchmark indices jumped as firm global stocks boosted investor sentiment. The BSE 30-share Sensex rose 188.33 points or 1.17%. Capital goods, IT, banking, auto, healthcare and metal stocks led the rally. Index heavyweight Reliance Industries edged higher in volatile trade. The market breadth was positive. All the sectoral indices on BSE were in green.

India VIX, a volatility index based on the S&P CNX Nifty index option prices, fell 3.2% to 28.73. India VIX is a measure of the market's expectation of volatility over the next 30 calendar days.

The market pared gains soon after a firm start triggered by higher Asian stocks. It moved between positive and negative terrain in morning trade. The market regained strength in mid-morning trade. It pared gains once again in early afternoon trade. The Sensex spurted to hit fresh day's high in afternoon trade. It extended gains later. The market witnessed a sharp surge at the fag end of the trading session.

European shares rose on Tuesday, buoyed by stronger banks after Barclays posted forecast-beating results, while oil majors drew strength from rallying crude prices. The key benchmark indices in France, Germany and UK rose by between 0.52% to 0.84%.

Asian shares rose led by Australian financial companies as earnings reports boosted confidence that economic conditions are improving. The key benchmark indices in Japan, Indonesia and South Korea rose by between 0.21% to 1.63%. Many Asian markets were shut for the second day in a row for the Lunar New Year holidays. US markets were closed on Monday 15 February 2010 for the Presidents' Day holiday. US index futures reversed early losses. Trading in US index futures indicated the Dow could gain 37 points at the opening bell on Tuesday, 16 February 2010.

Euro zone states urged Greece on Monday to announce more deficit-control steps by mid-March if needed, but said nothing new of last week's pledge to defend the country if debt market pressures spin out of control. At talks among finance ministers, Greece asked the euro zone to bear with its fiscal plans as announced, and warned that last week's offer of support by EU leaders may not be enough to stem a debt market squeeze on governments in the region.

Closer home, the government's chief statistician Pronab Sen said the wholesale price inflation could cross 10% by end-March 2010, depending on how food prices behave in the next two weeks. The headline inflation in January 2010 accelerated to its fastest pace in more than a year, vaulting above the Reserve Bank's end-March inflation forecast and putting more pressure on the bank to raise borrowing rates. The inflation data comes on the heels of a 16.8% annual surge in industrial output in December.

The wholesale price index rose 8.56% in January from a year earlier, its highest since November 2008 and accelerating from a 7.3% gain in December, data showed on Monday. In January, the Reserve Bank of India (RBI) had raised the wholesale price inflation forecast for the current year to end-March to 8.5% from 6.5%. The government on Monday also revised up the headline number for November to 5.6% from 4.8%, a sign of even more inflationary pressure. The rise was driven by a 17.4% jump in food prices, which rose because of weak monsoon rains and flooding. Inflation in manufacturing picked up to 6.55% from about 5% in December, a sign that inflationary pressures were spreading to other sectors of the economy.

Higher-than-expected government borrowing in the budget might hold off the central bank from aggressively raising rates as it would push up borrowing costs. RBI governor D Subbarao said on Saturday that government borrowing influences monetary policy.

The Reserve Bank of India is widely expected to raise borrowing rates at its April review after it surprised markets with a bigger-than-expected rise in banks' cash reserve requirements in January. The government completed its market borrowing of Rs 4,51,000 crore ($97 billion) for the current fiscal year to end-March early this month and the RBI expects its gross market borrowing next year to be slightly higher than this year.

Economic recovery in Asia has led to inflation resurfacing across the region, which has evoked stronger responses from the region's central banks. China on Friday 12 February 2010 surprised global markets by lifting bank reserve requirements for a second time in two months. The RBI governor, however, has said the bank could not just focus on inflation given growth concerns and a central banker last week said only an "unprecedented, unwarranted" event could prompt the bank to act between scheduled policy meetings.

Purchasing managers' index showed that manufacturing activity in January grew at its fastest pace in almost 1-1/2 years, boosted by a sharp rise in new export orders, while car sales in January rose an annual 32.3%.

The government has been reluctant to commit any rollback in fiscal stimulus but with the economy increasingly looking on a solid footing, there are expectations that it would lay out a roadmap for a stimulus withdraw in its 26 February 2010 annual budget. Last week, the finance minister said India's economy would grow around 7.75% in the fiscal year ending March.

Meanwhile, the government on Monday amended rules for foreign currency convertible bonds (FCCB) to allow issuers to revise their conversion price, a move aimed at reducing price uncertainty in a volatile equity market. The change will give issuers a window of 6 months to adjust the conversion price of their bonds to the higher of either the two weeks average or the six months average of the issuing company's stock. The decision unveiled by the finance ministry applies to companies that issued FCCBs before 27 November 2008.

The BSE 30-share Sensex rose 188.33 points or 1.17% to 16,226.68. The Sensex fell 17.06 points at the day's low of 16,021.29 in morning trade. The barometer index jumped 272.04 points at the day's high of 16,310.39 at the fag end of the trading session.

The S&P CNX Nifty rose 53.80 points or 1.12% to 4,855.75.

The BSE Mid-Cap index rose 0.63% and the BSE Small-Cap index rose 0.54%. Both the indices underperformed the Sensex.

All the sectoral indices on BSE rose. BSE Metal index (up 1.58%), BSE Auto index (up 1.37%), BSE IT index (up 1.36%) and BSE Healthcare index (up 1.2%), outperformed the Sensex. BSE Realty index (up 1.13%), BSE Oil & Gas index (up 1.13%), Bankex (up 1.12%), BSE PSU index (up 1.03%), BSE Capital Goods index (up 1.02%), BSE FMCG index (up 0.84%), BSE Power index (up 0.79%), and BSE Consumer Durables index (up 0.2%), underperformed the Sensex.

BSE clocked turnover of Rs 3724 crore, higher than Rs 3428.15 crore on Monday, 15 February 2010.

The market breadth, indicating the overall health of the market was positive. The breadth moved between positive and negative zone during the day. On BSE, 1549 shares advanced as compared with 1237 that declined. A total of 80 shares remained unchanged.

From the 30-member Sensex pack, 27 rose and rest fell.

Index heavyweight Reliance Industries (RIL) rose 0.99% in volatile trade. RIL recently submitted a $2 billion expression of interest for Value Creation Inc, a Canada-based private firm which holds oil sands assets.

Rate sensitive banking shares rose after the central bank said last week it will introduce from 1 April 2010 a new base rate to price credit more transparently, replacing the existing benchmark prime lending rate (BPLR). India's largest private sector bank by net profit ICICI Bank rose 1.97%. India's largest bank by net profit and branch network State Bank of India rose 1.41%. But, India's second largest private sector bank by net profit HDFC Bank fell 0.42%.

The Reserve Bank of India said the base rate will be the new reference rate for determining lending rates. According to draft guidelines, the RBI has proposed that the actual lending rate charged to borrowers would be the base rate plus borrower-specific charges including product-specific operating cost, credit-risk premium and tenure premium said.

IT stocks reversed early losses on recent strong economic data in the US. US is the largest export market for Indian IT firms. India's third largest software services exporter Wipro rose 1.46%. As per recent reports, Wipro Consumer Care and Lighting, the FMCG arm of Wipro, is in advanced talks to buy Nigeria-based skincare company, Tura International. India's largest IT exporter by sales Tata Consultancy Services rose 1.4%. TCS' Passport Seva Project, which aims to issue passports in flat three days, is all set to be launched shortly. India's second largest IT exporter by sales Infosys rose 1.53%.

Metal stocks rose after LMEX, a gauge of six metals traded on the London Metal Exchange, rose 1.01% to 3,178.10 on Monday, 15 February 2010. Steel Authority of India, Sterlite Industries, National Aluminum Company, Hindustan Zinc, JSW Steel rose by between 1.06% to 4.25%.

India's largest steel maker Tata Steel rose 2.23% ahead of its consolidated Q3 December 2009 result today.

Hindalco Industries rose 3.2% gaining for the third straight day on reports the company hopes to complete raising Rs 4900 crore of debt in the next two weeks to achieve financial closure for Utkal Alumina Refinery, a 15 lakh tonne per annum project in Orissa.

Cement stocks surged as the government may focus on the infrastructure sector in the Union Budget 2010-11 next week. ACC, Ambuja Cements, Ultratech Cement rose by between 4.27% to 5.21%.

India's largest drug maker by sales Ranbaxy Laboratories jumped 7.23%. Daiichi Sankyo recently said it will launch new innovative products in Mexico through the marketing division of Ranbaxy's Mexican subsidiary Ranbaxy Mexico.

Among other healthcare stocks. Biocon, Wockhardt, Cipla, Sun Pharmaceutical Industries, Dr Reddy's Laboratories, Biocon rose by between 0.67% to 2.09%.

India's largest engineering and construction firm by sales Larsen & Toubro rose 0.99%. The company said last week it won orders worth Rs 582 crore.

India's largest power equipment maker by sales Bharat Heavy Electricals rose 1.11% extending gains for the third day. The company last week secured a contract for the electro-mechanical equipment package for a 1,200 megawatt hydroelectric project in Bhutan valued at Rs 1,016 crore.

Among other capital goods stocks, ABB, Siemens and Pnj Lloyd rose by between 0.76% to 5%.

Rate sensitive auto stocks rose on strong sales in the month of January 2010. India's top small car manufacturer by sales Maruti Suzuki India rose 1.6%. As per reports the company expects a 20% growth in sales and hopes to double its exports to around 1.6 lakh units this fiscal ended March 2010. India's biggest tractor maker by sales Mahindra & Mahindra (M&M) rose 2% gaining for the straight third day.

India's largest commercial vehicle maker by sales Tata Motors rose 3.02%.Tata Motors is keen to sell a stake in its vehicle financing arm, Vice Chairman Ravi Kant said on Tuesday. The company said on Monday its global vehicle sales for January nearly doubled to 85,714 units from a year earlier. The sales include UK-based luxury brands Jaguar and Land Rover, whose sales nearly trebled in the month to 16,269 units from a year ago, the company said in a statement. It had earlier said domestic sales, including trucks, buses and cars, jumped an annual 77 % in January.

India's largest mobile services provider by sales Bharti Airtel fell 4.54%, extending a sell-off in the stock on Monday. The stock was the top loser form the Sensex pack. The stock fell on heavy volume of 82.09 lakh shares on BSE. The scrip had tanked 9.2% on Monday on concerns the leading Indian mobile firm's $10.7 billion offer for Kuwaiti Zain's African assets could strain its finances.

Bharti Airtel said on Monday it is in talks to buy the African assets of Kuwaiti telecom Zain for $10.7 billion, a deal that would give India's leading mobile operator a foothold in a largely untapped region with significant growth potential.

The government has resolved the issues related to 3G wireless spectrum auction, but it is not sure if it would happen before the end of the current fiscal year ending on 31 March 2010, Finance Secretary Ashok Chawla said on Tuesday.

Shares of oil exploration firms edged higher as crude oil rose tracking gains in Asian equities. Cairn India (up 1.75%) and Oil & Natural Gas Corporation (ONGC) (up 1.27%), moved up. Crude oil for March delivery rose as much as 42 cents, or 0.6%, to $74.55 a barrel in electronic trading on Tuesday, 16 February 2010. With markets closed Monday in the US for the Presidents' Day holiday, the contract had last settled on Friday, 12 February 2010, at $74.13 when it had lost $1.15 a barrel in New York.

Consumer durables stocks fell on profit taking. Rajesh Exports, Lloyd Electric, Asian Star Company, Gitanjali Gems fell by between 0.1% to 5.56%.

FMCG stocks rose on bargain hunting. Marico, Dabur India, ITC, United Spirits, Hindustan Unilever rose by between 0.1% to 2.89%.

India's largest power utility firm by sales NTPC rose 0.55%. The company's follow on public offer managed to scrape through with the issue getting subscribed 1.2 times. The issue, through which the government is divesting 5% of its stake, at a floor price of Rs 201 a share, opened on 3 February 2010 and closed on 5 February 2010. At the floor price, the follow-on-public offer (FPO) is valued at Rs 8,286 crore.

Among other power stocks, Tata Power Company, Reliance Infrastructure, Reliance Power rose by between 0.23% to 1.1%.

Rate sensitive realty shares rose on bargain hunting. Among realty stocks, Housing Development & Infrastructure, Omaxe, Akruti City, DLF, Indiabulls Real Estate rose by between 0.16% to 1.83%.

Unitech rose 0.2%. Recently Telenor bought a further 7.15% stake in its telecom joint venture Unitech Wireless by pumping in additional Rs 2022 crore of fresh equity.

Three airline companies rose after state-run oil firms on Monday, 15 February 2010, cut aviation turbine fuel price by 2.5% on falling global crude rates.. Kingfisher Airlines (up 1.95%), SpiceJet (up 4.29%) and Jet Airways (India) (up 0.66%), rose. Aviation turbine fuel (ATF) constitutes 35% to 40% of a carrier's operational costs and the reduction in fuel rates would help ease the burden on Indian carriers.

OCL Iron & Steel clocked the highest volume of 6.85 crore shares on BSE. Cals Refineries (3.23 crore shares), Hindustan Fertilisers & Chemicals (1.11 crore shares), Shree Ashtavinayak (1.02 crore shares) and Bharti Airtel (0.82 crore shares) were the other volume toppers in that order.

Bharti Airtel clocked the highest turnover of Rs 223.66 crore on BSE. Bajaj Auto (Rs 169.42 crore), OCL Iron & Steel (Rs 158.39 crore), Tata Steel (Rs 93.14 crore) and Reliance Industries (Rs 87.42 crore) were the other turnover toppers in that order.