Market gains for the fifth straight day; Sterlite Industries surges on bonus issue

The key benchmark indices edged higher for the fifth straight day on firm global stocks and forecast of a normal monsoon this year. The BSE 30-share Sensex was provisionally up 42.94 points or 0.24%, off close to 90 points from the day's high and up close to 45 points from the day's low. The market breadth, indicating the overall health of the market was positive. The breadth was much stronger earlier in the day.

Metal stocks rose as metal prices gained on London Metal exchange on Friday, 23 April 2010. Copper major Sterlite Industries surged nearly 6% after the company's board recommended a liberal 1:1 bonus issue and a 2-for-1 stock split at the time of announcing Q4 result. But, index heavyweight Reliance Industries (RIL) fell in volatile trade as its fourth quarter results missed market expectations.

India's largest car maker by sales Maruti Suzuki India witnessed a bout of volatility after the company said profit for Q4 March 2010 was boosted by a low base effect. ICICI Bank reversed early gains on profit taking after strong Q4 results announced on Saturday, 24 April 2010. HDFC Bank hit all-time high after strong Q4 results which were announced on Saturday, 24 April 2010. Interest rate sensitive realty stocks fell.

Stocks were volatile as traders rolled over positions in the derivatives segment from the April 2010 series to the May 2010 series ahead of the expiry of the near-month April 2010 contracts on Thursday, 29 April 2010. The market surged in early trade tracking gains in Asian stocks. The market came off the higher level later. The market was range bound in morning trade. The market moved further away from the day's high in early afternoon trade. The market soon came off the lower level. The market moved in a range later. It trimmed gains in late trade.

Concerns on the political front eased following reports that BSP is likely to bail out the Congress-led United Progressive Alliance government at the Centre when the opposition parties move cut motion on budgetary proposals on Tuesday, 27 April 2010. BSP has 21 MPs in the Lok Sabha. If the cut motion is adopted, the government will have to step down.

As regards Q4 March 2010 corporate earnings, the results announced so far have been good. The combined net profit of a total of 256 companies rose 31.8% to Rs 21656 crore on 44.7% rise in sales to Rs 195424 crore in the quarter ended March 2010 over the quarter ended March 2009.

European stocks rose on Monday after Greece requested emergency aid and as a raft of US data showed that recovery in the world's biggest economy was gathering strength. Key benchmark indices in UK, France and Germany were up 0.5% to 1.09%.

Japanese stocks led rally in Asian stocks and commodities rallied as economic reports pointed to faster growth and concerns about Greece's debt abated. The key benchmark indices in Hong Kong, Indonesia, Japan, South Korea, Singapore and Taiwan rose by between 0.47% to 2.3%. But, China's Shanghai Composite fell 0.47%.

Greece, late last week, formally requested aid through a joint European Union-International Monetary Fund mechanism and Greek Finance Minister George Papaconstantinou said Sunday that funds should be available by early May. Investors expect the aid will help Greece avert debt default in the near term.

US index futures rose in volatile trade. Trading in US index futures indicated that the Dow could gain 11 points at the opening bell on Monday, 26 April 2010.

US stocks rose to a 19-month high on Friday 23 April 2010 as Merck eased concerns about the impact of healthcare reform, saying its costs will be relatively low. Sales of new U.S. homes soared 27% in March 2010 climbing the most in 47 years. The Dow Jones industrial average gained 69.99 points, or 0.63%, to 11,204.28. The Standard & Poor's 500 Index rose 8.61 points, or 0.71%, to 1,217.28. The Nasdaq Composite Index added 11.08 points, or 0.44%, to 2,530.15.

The US Federal Reserve is likely to keep interest rates near zero and it is also likely to repeat its vow of an extended period of very low rates at the conclusion of a two-day policy meeting on Wednesday, 28 April 2010. The Fed has kept the Fed funds rate in a range of zero to 0.25% since December 2008.

Back home, the Indian Meteorological department (IMD) expects normal rainfall in the June-September monsoon season this year. Rainfall is likely to be 98% of the long-term average, the IMD said on Friday, 23 April 2010. Good monsoon rains would help raise farm output, boost rural incomes and lower food inflation. The south west monsoon is important for India as about 60% of the country's farmlands are rain-fed and more than half of the workforce is employed in the agriculture sector. The quantum of rainfall in the crucial sowing month of July and distribution of rainfall during the monsoon season holds key.

The latest data showed the annual food and fuel inflation ticked higher, raising worries central bank may raise interest rates before the next scheduled policy review in July 2010. The food price index rose 17.65% in the year to 10 April 2010. The fuel price index rose 12.45% and the primary articles index rose 14.14% in the year to 10 April 2010, the latest government data showed.

The Reserve Bank of India expects India's economy to expand 8% in the year ending March 2011 (FY 2011) with an upward bias, assuming a normal monsoon this year and sustenance of good performance of the industrial and services sectors on the back of rising domestic and external demand.

In its half-yearly World Economic Outlook, the International Monetary Fund (IMF) has pegged India's GDP growth at 8.75% in calendar 2010 and 8.5% in calendar 2011. According to the IMF, domestic demand in India will strengthen as the labour market improves, and investment is expected to be boosted by strong corporate profitability, rising business confidence and favourable financing conditions.

Indian stocks rose for a fourth day in a row on Friday, 23 April 2010, after the Reserve Bank of India (RBI) raised interest rates on Tuesday, 20 April 2010, by less than some economists had expected and forecast inflation will slow. Optimism about the fourth quarter corporate earnings and hopes of a normal monsoon this year aided the rally

The RBI said it will continue to monitor macroeconomic conditions, particularly the price situation closely and take further action as warranted. A 25 basis points hike in the cash reserve ratio (CRR) with effective from 24 April 2010 will suck out excess liquidity of Rs 12500 crore from the banking system.

The BSE 30-share Sensex was up 42.94 points or 0.24% to 17,737.14 as per provisional figures. The Sensex rose 132.28 points at the day's high of 17,826.48 in early trade. The index fell 1.94 points at the day's low of 17,692.26 in early trade.

The S&P CNX Nifty was up 15.35 points or 0.29% to 5319.45 as per provisional figures.

The BSE Mid-Cap index rose 0.55% and the BSE Small-Cap index rose 0.52%. Both the indices outperformed the Sensex.

The market breadth, indicating the overall health of the market, was positive. The breadth was much stronger earlier in the day. On BSE, 1562 shares advanced as compared with 1330 that declined. A total of 87 shares were unchanged.

From the 30 share Sensex pack, 18 stocks rose while the rest declined.

BSE clocked turnover of Rs 3938 crore lower than Rs 4694.92 crore on Friday, 23 April 2010.

Index heavyweight Reliance Industries (RIL) fell 1.83% to Rs 1067.40 as net profit rose a lower-than-expected 29.9% to Rs 4710 crore in Q4 March 2010 over Q4 March 2009. The stock hit a high of Rs 1091.90 and a low of Rs 1064. The Q4 result was announced after trading hours on Friday, 23 April 2010. The stock had risen 1.10% ahead of the result on Friday.

India's largest engineering and construction firm by sales Larsen & Toubro (L&T) rose 0.44%, with the scrip gaining for the second straight day. The company recently received an order worth Rs 1,060 crore from Gujarat State Petroleum Corporation (GSPC) to build an offshore oil platform.

India's largest car maker by sales Maruti Suzuki India fell 2.34% after Q4 results. The stock was volatile. It a hit a high of Rs 1386.05 and a low of Rs 1326.50. Net profit surged 170.04% to Rs 656.55 crore in Q4 March 2010 over Q4 March 2009. The company announced result during market hours today.

Maruti said profit surged in Q4 March 2010 due to a lower base effect. The car maker also said profit for Q4 March 2010 was negatively impacted to some extent from cost of upgradation of its full range of cars to meet new emission norms, launch of new models, higher raw material prices and adverse foreign exchange movement

Metal stocks rose after LMEX, a gauge of six metals traded on the London Metal Exchange, rose 0.46% on Friday, 23 April 2010. JSW Steel, Hindustan Zinc, National Aluminum Company, Jindal Steel & Power, Hindalco Industries rose by between 1.33% to 3.45%.

Copper maker Sterlite Industries rose 5.62% after the company's board of directors recommended issue of bonus shares in the ratio of 1:1 and a 2-for-1 stock split at the time of announcing Q4 results during trading hours. Consolidated net profit surged 130.82% to Rs 1380.90 crore in Q4 March 2010 over Q4 March 2009.

India's largest private sector steel maker by sales Tata Steel rose 1.24%, rebounding from a two-days fall. The company said recently its sales in the year ended on 31 March 2010 rose 18% from a year ago to 6.17 million tonnes.

Steel Authority of India rose 1.38% after the company received an approval from the Ministry of Steel for a follow-on public offer.

Unitech fell 1.23%. The board of directors at a meeting held on 20 April 2010 approved demerger of non-core operations comprising of telecommunications, hotels, special economic zones, logistics, transmission towers and others into a separate entity called Unitech Infra. For every one share of Unitech, the shareholders will get one share of Unitech Infra, which will be listed at a later date.

India's largest realty player by sales DLF fell 2.52%, reversing early gains after the company said on Saturday that its subsidiary, Caraf Builders & Constructions, acquired 24.52 crore compulsorily convertible preference shares (CCPS) in group company DLF Assets from PE firm SC Asia for Rs 3,084.68 crore. With this, Caraf's stake in DLF Assets has risen to 91.90%. DSIPL (a company owned by SC Asia) would continue to hold 2.72 crore CCPS, representing an economic interest of 4.59% in DAL, it said.

Among other realty stocks, Ackruti City, Sobha Developers, HDIL and Indiabulls Real Estate fell by between 0.29% to 3.01%.

Bank stocks were mixed. India's second largest private sector bank by net profit HDFC Bank rose 2.39% as net profit rose 32.61% to Rs 836.62 crore in Q4 March 2010 over Q4 March 2009. The stock hit all-time high of Rs 1997.85. The result was announced on Saturday, 24 April 2010.

Axis Bank rose 3.36%, extending recent gains triggered by strong Q4 results. Net profit jumped 31.54% to Rs 764.87 crore in Q4 March 2010 over Q4 March 2009. The result was announced on 20 April 2010.

India's biggest commercial bank in terms of branch network State Bank of India fell 0.16% on profit taking after recent strong gains triggered by brokerage upgrades on the counter. A prominent foreign brokerage has reportedly raised its rating on the stock to 'neutral' from 'sell'. Another foreign brokerage has reportedly predicted a re-rating of the counter on the back of an expected lending growth.

Among other PSU banks, Bank of Baroda and Bank of India rose by between 0.1% to 3.74%. But, Punjab National Bank fell 0.28%. The Union Cabinet on Friday, 23 April 2010 approved infusion of Rs 15000 crore in state-run banks for the fiscal year ending March, 2011, to help meet growing credit requirements of the economy

India's largest private sector bank by net profit ICICI Bank fell 1.6%, reversing early gains. Net profit rose 35.2% to Rs 1005.57 crore in Q4 March 2010 over Q4 March 2009. The result was announced on Saturday, 24 April 2010. The stock had risen 3.37% ahead of its result on Friday 23 April 2010.

India's largest mortgage finance firm by total income Housing Development Finance Corporation (HDFC) rose 3.95%. The company recently launched a Dual Rate Product-2 (DRHL-2) in which home loan interest rates will be fixed rate at 8.25% annually up to 31 March 2011, 9% for the period between 1 April 2011 and 31 March 2012, and the applicable floating rate for the balance term. The offer is for loan application made before 30 April 2010 and at least part-disbursement taken before 30 June 2010.

Sun Pharmaceutical Industries fell 4.77% after a US District Court for New Jersey rejected claims by Teva Pharmaceutical Industries and Sun Pharmaceuticals Industries that the patent on Pfizer's Protonix acid reflux drug should be declared invalid. The original patent on Protonix, known chemically as pantoprazole, is held by Swiss drugmaker Nycomed and was licensed to Wyeth, which is now owned by Pfizer. Nycomed and Wyeth filed their patent infringement lawsuit against Teva Pharmaceutical Industries and Sun Pharma in May 2004.

Godrej Consumer Products fell 2.66% after the company said at the time of announcing Q4 March 2010 results that the fast-moving consumer goods industry is witnessing slowdown in growth.

Finolex Industries surged 6.52%, after net profit spurted 80.8% to Rs 59.72 crore on 14.8% rise in net sales to Rs 436.86 crore in Q4 March 2010 over Q4 March 2009.