Cement, IT stocks lead 106-points Sensex surge

The key benchmark indices logged decent gains in what was a choppy trading session. After suffering an initial setback, the market staged a comeback as Asian stocks and US index futures rose. The BSE 30-share Sensex jumped 106.57 points or 0.67%, off close to 50 points from the day's high and up close to 180 points from the day's low. The Sensex today, 9 February 2010, regained the psychological 16,000 mark.

The market breadth was positive. PSU, power, telecom and infrastructure stocks gained on fresh buying. Cement stocks surged on reports cement makers have raised prices effective from 1 February 2010. IT stocks gained on bargain hunting after a recent fall. But rate sensitive realty shares declined on fears a hike in interest rate following inflationary pressures in the domestic economy. Auto pivotals also declined. Index heavyweight Reliance Industries (RIL) recovered from day's low

The market was volatile. Equities had a dull start after the US markets suffered a severe setback on Monday with the Dow sliding below the 10,000 mark. Rising fears of possibility that the government may start to unwind its fiscal stimulus in the forthcoming budget and budget deficits in Europe may slow the global economic recovery had also helped triggered the early fall.

The market staged a strong intraday rebound in morning trade as Asian stocks rose. The market erased all its gains and slipped into the red briefly in mid-morning trade. Sustained buying demand in select pivotals triggered a recovery in early afternoon trade. After striking fresh intra-day high in afternoon trade, the market pared gains in mid-afternoon trade.

India VIX, a volatility index based on the S&P CNX Nifty index option prices, shed 1.48% to 29.91. India VIX is a measure of the market's expectation of volatility over the next 30 calendar days.

European shares edged lower in volatile trade. Key benchmark indices in France and Germany were down by between 0.03% and 0.33%. But, UK's FTSE 100 rose 0.23%.

Asian markets ended mostly higher on Tuesday, with a rebound in commodity prices and Swiss banking major UBS's return to profit spurring late buying in Hong Kong. The key benchmark indices in China, South Korea, Hong Kong, Singapore and Taiwan were up by between 0.47% to 2.01%. However, Japan's Nikkei 225 index fell 0.19%.

US markets edged lower on Monday, 8 February 2010, as investors sold financial shares due to heightened concerns about the euro zone's sovereign debt troubles, sending the Dow below the psychological 10,000 mark for the first time since November 2009. The Dow Jones Industrial Average slid 103.84 points, or 1.04%, at 9,908.39. The Standard & Poor's 500 Index dropped 9.45 points, or 0.89%, at 1,056.74. The Nasdaq Composite index declined 15.07 points, or 0.70%, at 2,126.05.

Trading in US index indicated the Dow could rise 38 points at the opening bell on Tuesday, 9 February 2010.

According to EPFR Global, that tracks foreign inflows, emerging market equity funds lost $1.6 billion in weekly withdrawals, the biggest outflows in 24 weeks. The report further added that investors pulled out almost $1 billion from global emerging market stock funds in the week ended 3 February 2010, the most in more than a year.

Markets across the globe have been under pressure recently following the recent European fiscal woes, rising US jobless claims and China holding back bank lending

While fears over possible sovereign defaults in Greece, Portugal and Spain gripped global markets, the possibility of a contagion to other European economies causing a double-dip recession worsened the mood. Credit default swaps in several European countries are on the rise, indicating a certain lack of reliability on government debt. Back home, equities have been in a tailspin recently following unwinding of dollar carry trade, muted expectations in the run-up to the Union budget 2010-11 and concerns over valuations. Rising fears of possibility that the government may start to unwind its fiscal stimulus in the forthcoming budget also added to woes.

With barely weeks to go before the presentation of the Railway Budget 2010-2011, the Ministry said it has registered earnings of Rs 70,501 crore in the 10 months from 1 April 2009 to 31 January 2010, an 8.5% increase over the Rs 64,943.32 crore it recorded during the same period the previous year. The national transporter booked approximately 600 crore passengers, a 5% increase over last year, the railways said in an emailed press statement.

Government on Monday, 8 February 2010, forecast its economic growth for the fiscal year ended March 2010 at 7.2%, as against 6.7% achieved in the previous fiscal, raising fears of possibility that the government may start to unwind its fiscal stimulus in the forthcoming budget. The advance estimates of the country's gross domestic product released by the Central Statistical Organisation (CSO) forecasts a growth of 9.9% in services and 8.9% in manufacturing, the highest among the eight broader economic activities.

Earlier, Reserve Bank of India Governor Duvvuri Subbarao on 29 January 2010 raised India's growth forecast to 7.5% in the year ending March 2010 and said the central bank will target inflation in the next few months. He estimated inflation to accelerate to 8.5% from 6.5% forecast earlier.

The government will announce the industrial output data for the month of December 2009 on Friday, 12 February 2010. The industrial output rose 11.7% in November 2009. Also inflation numbers in the week ended 30 January 2010 will be out on Thursday. Stock markets remains shut on Friday on account of Mahashivratri.

Chairman of the prime minister's economic advisory council C. Rangarajan recently said the government is no hurry to roll back economic stimulus measures in one go. He also said that efforts will be made in the budget later this month to lower the fiscal deficit. It has been pointed out repeatedly that the process of exit must be gradual, coordinated and must not be sudden, should not disrupt the economy and efforts will be made to bring down the fiscal deficit in the coming budget, Rangarajan said.

As regards government's divestment plan, Rural Electrification Corporation (REC) will be the next Government- owned entity to come out with a follow-on public offer (FPO). Its 17.1-crore share FPO will open on 19 February 2010 and will close on 23 February 2010. This will be followed by NMDC's FPO.

As per reports, in the next fiscal, the Government is likely to divest its stake in state-run firms such as Engineers India, Coal India through initial public offers (IPOs) and Power Grid and Sail through FPOs.

India can gradually start raising interest rates as Asia's third-largest economy is among the first to recover after the global financial crisis, the International Monetary Fund (IMF) said in a report published on 4 February 2010 on its website. India's economy is one of the first in the world to recover and the central bank should take a gradual approach to ensure the recovery reaches its full potential, the IMF report said.

Following rising prices of potato and pulses, food inflation rose to 17.56% in the week ended 23 January 2010 from 17.40% in the previous week, government data released on Thursday showed. The inflation for primary articles, which include food and non-food items, marginally eased to 14.56% in the reporting week from 14.66% in the previous week. The fuel price index rose 5.88%

Pronab Sen, the country's chief statistician, said last week the government should wait till May to roll back stimulus, as the strength of the demand recovery visible in available data may not be for real, pulling the finance minister, Pranab Mukherjee, away from a policy direction which the Reserve Bank of India (RBI) desires.

The BSE 30-share Sensex rose 106.57 points or 0.67% to 16,042.18. The index opened 5.12 points higher at 15,940.73. At the day's high of 16,094.13, the Sensex rose 158.52 points in afternoon trade. The Sensex lost 72.71 points at the day's low of 15,862.90 in early trade.

The S&P CNX Nifty rose 32.25 points or 0.68% to 4792.65.

The market breadth, indicating the overall health of the market, was positive. On BSE, 1483 shares advanced as compared with 1301 that declined. A total of 77 shares remained unchanged.

The total turnover on BSE amounted to Rs 4460 crore lower than Rs 4687 crore on Monday, 8 February 2010

From the 30-member Sensex pack, 19 gained while the rest slipped.

The BSE Mid-Cap index rose 0.44% and the BSE Small-Cap index rose 0.44%. Both the indices underperformed the Sensex.

The BSE IT index (up 2.52%), BSE Teck index (up 2.09%), BSE PSU index (up 1.67%), BSE HealthCare index (up 0.95%), BSE Power index (up 0.79%) and BSE Capital Goods index (up 0.71%), outperformed the Sensex.

BSE Realty index (down 1.21%), BSE Oil & Gas index (down 0.23%), BSE FMCG index (up 0.16%), BSE Consumer Durables index (up 0.26%), BSE Auto index (up 0.29%), BSE Metal index (up 0.45) and BSE Bankex (up 0.6%) underperformed the Sensex.

Cement stocks gained on reports prices are again on the boil. Diversified major Grasim, which is about to merge its cement division with UltraTech Cement, jumped 4.81%.

Among other cement stocks, ACC, UltraTech Cement and Ambuja Cements rose by between 2.93% to 3.24%..

After a series of rises since November 2009, a fresh round of price increase, effective from 1 February 2010 by almost all manufacturers has pushed the rate up by Rs 3-5 for a 50 kg bag, pushing the average national price to about Rs 235. In November, the average rate was Rs 210-215 a bag.

Index heavyweight Reliance Industries (RIL) fell 0.26% to Rs 993.75, recovering from day's low of Rs 984.15. As per reports, RIL has submitted a $2 billion expression of interest for Value Creation Inc, a Canada-based private firm which holds oil sands assets.

IT stocks rose on a recent steep slide of the rupee against the dollar. India's second largest IT exporter by sales Infosys surged 2.92%. India's third largest software services exporter Wipro rose 2.49%. 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 gained 1.44%. Reportedly TCS' Passport Seva Project, which aims to issue passports in flat three days, is all set to be launched in a week or two.

The Indian rupee recovered on Tuesday from a seven-week trough reached in the previous session, as broadly higher Asian peers lifted sentiment. It was hovering at 46.65/66 a dollar, higher than its close of 46.83/84 on Monday.

A weak rupee boosts revenue of IT firms in rupee terms as the sector derives a lion's share of revenue from exports

India's largest private sector steel maker by sales Tata Steel fell 0.07% in volatile trade . The company's steel sales from its Indian operations rose 9% to 5.56 lakh tonnes in January 2010 over January 2009. The announcement was made after market hours on Friday, 5 February 2010.

The Indian operations account for about a quarter of the group's total annual capacity of 3 crore tonnes, which includes unit Corus, Europe's second-largest steelmaker.

PSU stocks gained on fresh buying after they had underwent correction after recently concluded NTPC FPO saw lukewarm investor response. NMDC (up 9.48%), Hindustan Copper (up 10%), Engineers India (up 1.80%), HMT (up 10.66%), ITI (up 8.31%), and Rural Electrification Corporation (up 1.55%), gained.

Power stocks gained on fresh buying as investors realigned their portfolios post the recently concluded NTPC FPO. India's largest power utility firm by sales NTPC rose 0.64%. 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, Reliance Infrastructure, Torrent Power and Tata Power Company rose by between 0.87% to 2.03%.

India's largest power equipment maker by sales Bharat Heavy Electricals rose 0.07%. The company on Monday secured a contract for the electro-mechanical equipment package for a 1,200 megawatt hydroelectric project in Bhutan valued at Rs 1,016 crore.

India's largest engineering and construction firm by sales Larsen & Toubro rose 1.21% after company said today it won orders worth Rs 582 crore.

Among other capital goods stocks, SKF India, Siemens, BEML, Praj Industries rose by between 0.26% to 1.37%.

Rate sensitive realty shares declined on fears a hike in interest rate following inflationary pressures in the domestic economy. India's largest realty firm by sales DLF lost 1.51%. Among other realty stocks, Indiabulls Real Estate, Unitech and Parsvanath Developers fell by between 0.56% to 2.9%,

Telcom stocks were mixed on reports they will together save at least $1.5 billion this fiscal in capital expenditure thanks to their practice of sharing towers and accompanying infrastructure, giving them some respite from a brutal price war

India's largest cellular services provider by sales Bharti Airtel rose 1.78%. But, India's second largest cellular services provider by sales Reliance Communications fell 0.3%.

Metal stocks gained after LMEX, a gauge of six metals traded on the London Metal Exchange, surged 2.20% on Monday, 8 February 2010. Steel Authority of India, JSW Steel, Jindal Saw, Hindustan Zinc and Sterlite Industries rose by between 0.32% to 1.84%.

But, India's largest private sector steel maker by sales Tata Steel fell 0.07%. The company's steel sales from its Indian operations rose 9% to 5.56 lakh tonnes in January 2010 over January 2009. The announcement was made after market hours on Friday, 5 February 2010.

The Indian operations account for about a quarter of the group's total annual capacity of 3 crore tonnes, which includes unit Corus, Europe's second-largest steelmaker.

Auto stocks rose on jump in vehicle sales in the month of January 2010. India's largest commercial vehicle maker by sales Tata Motors rose 0.4%. Among two wheeler stocks, Hero Honda Motors, TVS Motor Company and Bajaj Auto rose by between 0.07% to 2.09%.

But, India's top small car manufacturer by sales Maruti Suzuki India fell 0.94%. 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) fell 1.07%. Reportedly M&M and Britain's BAE Systems plan to inject a total of $21.25 million over a three-year period into their joint venture company Defence Land Systems India. The joint venture firm will roll out high mobility vehicle Axe, armoured and bulletproof Scorpios, Boleros, Rakshak, rapid intervention vehicles and the Marksman light-armoured vehicles.

Lupin rose 3.53%, after the company received final approval from US Food & Drug Administration for Amlodipine/Benazepril capsules in multiple strengths.

Among other healthcare stocks, Sun Pharmaceutical Industries, Cipla, Ranbaxy Laboratories, Pfizer and Sterling Biotech rose by between 0.73% to 2.22%.

Infrastructure stocks rose on recent reports the government is considering new guidelines for private equity investment in infrastructure companies in an attempt to open new sources of equity funding for the sector. The move comes in the backdrop of the poor response from private companies and banks in financing projects, especially those in sectors like highways and urban transport and infrastructure. Gayatri Projects, Nagarjuna Construction Company and Hindustan Construction Company rose by between 0.71% to 4.24%.

Cals Refineries clocked the highest volume of 3.34 crore shares on BSE. Jubilant FoodWorks (1.4 crore shares), Unitech (0.76 crore shares), Shree Ashtavinayak (0.67 crore shares), Hindalco Industries (0.63 crore shares) were among the other volume toppers in that order.

Jubilant FoodWorks clocked the highest turnover of Rs 342.41 crore) on BSE. Tata Steel (Rs 131.22 crore), State Trading Corporation (Rs 124.54 crore), Infinite Computer Solutions (Rs 111.18 crore) and Hindustan Copper (Rs 100.12 crore) were among the other turnover toppers in that order.