Market kicks off new financial year with gains

Build-up of fresh positions on the first day of the new financial year helped the key benchmark indices snap a two-day slide. Markets across the globe logged on decent gains. The BSE 30-share Sensex was up 164.85 points or 0.94%, up 137.58 points from the day's low and off 13.94 points from the day's high.

The market breadth was strong. IT stocks were in demand on bargain hunting after a recent fall caused by appreciation of the rupee against the dollar. Banking stocks gained on fresh buying. Index heavyweight Reliance Industries (RIL) gained over 1.5% on expectations of robust Q4 earnings. Metal, infrastructure stocks and heavyweights from the capital goods sector also logged gains on fresh buying. Rate sensitive realty shares rose on bargain hunting after a recent fall triggered by worries higher interest rate on housing loans may crimp demand. But, telecom pivotals declined. Sugar stocks also declined on fears falling global sugar prices will impact profitability.

Firm Asian markets helped the domestic bourses kick off the new financial year 2010-2011 (FY 2011) on an upbeat note. The market pared gain later after the latest data showed that growth in the manufacturing slowed down in the month just gone by. The market gained strength in early afternoon trade as index heavyweight Reliance Industries extended (RIL) early gains. The market hit fresh intraday high in afternoon trade as European stocks rose in early trade. The market scaled fresh intraday high in mid-afternoon trade. Firm global stocks pushed the key benchmark indices to fresh intraday highs in late trade.

NSE's volatility index, India VIX declined sharply. The index tumbled 11.32% to 17.62. The index had witnessed a steep surge recently. India VIX is a measure of the market's expectation of volatility over the next 30 calendar days. The lower the index, which is based the S&P CNX Nifty option prices, the higher the market's desire to take risk.

The National Stock Exchange (NSE) on Wednesday, 31 March 2010, announced a reduction in market lot size of a number of stocks in the derivatives segment. The revision was announced as a part of a bi-annual review. The market lot of a total of 124 stocks was revised downwards whereas those of a total of 59 stocks was revised upwards. The market lot of 7 stocks was kept unchanged.

The stock market remains closed on Friday, 2 April 2010, on account of Good Friday.

Food price index rose 16.35% in the year to 20 March 2010, higher than an annual rise of 16.22% in the previous week, government data showed on Thursday. The fuel price index rose 12.75%, higher than an annual rise of 12.68% in the previous week. Fuel costs have risen following a hike in domestic fuel prices and an upswing in world crude prices. The primary articles index was up 13.86% in the year to 20 March 2010.

India's manufacturing growth slowed down in March 2010, dropping from a 20-month-record in February 2010, as mounting cost pressures took a toll on expansion in output, a survey released today showed. The HSBC Markit Purchasing Managers' Index , based on a survey of 500 companies, fell to 57.8 in March 2010 from 58.5 in February 2010, which was the strongest since June 2008. A reading above 50 means activity is expanding. The new orders index fell to 62.7 in March from 64 in February

The Reserve Bank of India (RBI) has reportedly kept the limit of state governments' short-term borrowing from the central bank, called as Normal Ways and Means Advances, unchanged for the financial year started Thursday. The limit, which is also applicable for the union territory of Puducherry is placed at Rs 9925 crore.

Industrial output in February is expected to have grown 16% year-on-year, Industry Secretary said on Wednesday. The output in January grew an annual 16.7%.

Foreign direct investment rose 15.4% to $1.72 billion in February 2010 over February 2009, government said Wednesday.

Exports in February grew 34.8% on year to $16.09 billion, Trade Minister Anand Sharma said on Wednesday. Exports are expected to grow 15-20% in the year that starts on 1 April 2010, Sharma said. Imports, too, maintained momentum growing by 66% to $25 billion underscoring the strong revival in the domestic economy.

The government announced a fresh package of incentives for exporters of garments, engineering, electronics and agro products to select markets where demand for the products is yet to pick up. The sops, which will be doled out from Thursday, will be available for six months and are expected to cost the government Rs 625 crore.

The prime minister promised on Thursday to launch a guarantee of free elementary education, in a fresh sign the government was focusing on big-ticket programmes to consolidate its rural and poor voters.

The BSE Sensex vaulted 7,819.27 points or 80.5% in the year ended March 2010 (FY 2010) helped by heavy purchases by foreign institutional investors. Indian companied raised over Rs 47800 crore through public offers during the fiscal 2009-2010, following buoyant secondary market.

Global credit rating agency Standard & Poor's, last month, revised the outlook on India to stable from negative due to improved government finances.

The forecast for the southwest monsoon for 2010 is the next major trigger for the market. Good rains this year after last year's drought will boost farm output and rural incomes. But another monsoon failure will add to inflationary pressure which in turn may hamper the current strong economic rebound.

Tokyo-based Research Institute for Global Change has predicted normal monsoon rains in India for the current year. Agriculture secretary Prabeer Kumar Basu had also told media in Delhi last week that the monsoon rains for the year will be normal. The Indian Meteorological Department (IMD) issues a monsoon forecast, usually in the second half of April after considering weather observations in different parts of the world and extrapolating statistical data.

A weakening El Nino is a positive sign for the monsoon, Ajit Tyagi, director general at the India Meteorological Department, said on 18 March 2010. The cyclical heating of the Pacific Ocean known as El Nino will continue to fade, US forecasters said this month. The weather event, which occurs every four to seven years, brings more rain to South America and less precipitation to Asia.

European shares advanced Thursday, hitting a fresh 18-month high, as upbeat manufacturing data from Europe and China boosted sentiment, with banks among the biggest index gainers. The key benchmark indices in France, Germany and UK rose by between 0.59% to 1.06%.

Germany's seasonally adjusted retail sales fell 0.4% in real terms in February compared to the previous month, the Federal Statistical Office said on Thursday. Sales dropped 0.9% in real terms compared with the corresponding month in 2009

Equity markets are closed in the US and Europe on Friday, 2 April 2010, for the Easter holiday, and European equity markets are also closed Monday, 5 April 2010.

Asian stocks rose to an 11-week high on Thursday as China's manufacturing industry picked up and foreign buying boosted the technology-heavy markets of Taiwan and South Korea. The key benchmark indices in China, Hong Kong, Indonesia, Japan, South Korea, Singapore, and Taiwan were up by between 1.17% to 1.92%.

China's official Manufacturing Purchasing Managers Index rose to 55.10 in March from 52 in February. Meanwhile a separate China manufacturing PMI released by HSBC Holdings Plc and Markit Economics also rose, to 57 in March 2010 from 55.8 in the previous month.

Japan's largest manufacturers became the least pessimistic about the economy since 2008 as a global rebound drove demand for exports. The Tankan index of sentiment rose to minus 14 in March 2010 from minus 25 in December 2009, the fourth straight gain, the Bank of Japan said in Tokyo today.

US stocks fell Wednesday after an unexpectedly negative private-sector jobs report unnerved investors ahead of Friday's key government labor market data. The Dow Jones Industrial Average dropped 50.79 points or 0.47% to 10,856.63. The Nasdaq Composite index slid 12.73 points or 0.53% to 2,397.96 and the Standard & Poor's 500 index shed 3.84 points or 0.33% to 1,169.43

Payrolls firm ADP said employers slashed 23,000 jobs from payrolls in March 2010, which came as a surprise to economists, who had expected an addition of 50,000 jobs.

Another economic data showed the Chicago purchasing manager's index dropped to 58.5 in March 2010 from 62.6 in February 2010.

The Labor Department's report on Friday will be closely watched by investors to see the strength of the budding recovery from the worst recession in a generation. Analysts expect the government would report March 2010 non-farm payrolls rose 190,000, after a decline of 36,000 in February 2010, and the unemployment rate to hold steady at 9.7%.

Trading in US index futures indicated that the Dow could rise 52 points at the opening bell on Thursday, 1 April 2010.

Closer home, the BSE 30-share Sensex was up 164.85 points or 0.94% to 17,692.62. The index surged 178.79 points at the day's high of 17,706.56 in late trade. The Sensex gained 27.27 points at the day's low of 17,555.04 in early trade.

The S&P CNX Nifty was up 41.40 points or 0.79% to 5290.50

The market breadth, indicating the overall health of the market, was strong. On BSE, 2248 shares advanced as compared with 650 that declined. A total of 63 shares remained unchanged.

The BSE Mid-Cap index rose 0.88%, underperforming the Sensex. The BSE Small-Cap index rose 2.43%, outperforming the Sensex.

Most sectoral indices on BSE edged higher. The BSE Realty index (up 1.11%), the BSE Metal index (up 1.43%), the BSE IT index (up 2.26%), the BSE Teck index (up 1.25%), the BSE Consumer Durables index (up 1.54%), the BSE Oil & Gas index (up 0.98%), the BSE Capital Goods index (up 1.37%), outperformed the Sensex.

The BSE HealthCare index (up 0.29%), the BSE Power index (up 0.80%), the BSE PSU index (up 0.33%), the BSE Bankex (up 0.57%), the BSE Auto index (down 0.08%), the BSE FMCG index (down 0.22%), underperformed the Sensex.

BSE clocked a turnover of Rs 4684 crore, higher than Rs 3,873.98 crore on Wednesday, 31 March 2010.

Among the 30-member Sensex pack, 21 advanced while the rest of them slipped. Hindustan Unilever (down 3.35%), Grasim (down 0.10%), and Tata Power (down 1.11%), edged lower from the Sensex pack.

IT stocks rose on bargain hunting after a recent slide triggered by a firm rupee. A firm rupee adversely affects operating profit margin of IT firms as the sector derives a lion's share of revenue from exports.

India's largest software services exporter by sales Tata Consultancy Services (TCS) surged 3.48% to Rs 808 and was the top gainer from the Sensex pack.

India's second largest software services exporter by sales Infosys rose 2.40% and India's third largest software services exporter by sales Wipro rose 1.73%

India's largest bank by net profit and branch network State Bank of India (SBI) rose 1.30% after the bank said its special home loan scheme has been extended up to 30 April 2010.

Other banking stocks were also logged marginal rise. India's largest private sector bank by net profit ICICI Bank rose 0.07% and India's second largest private sector bank by net profit HDFC Bank rose 0.03%.

United Bank of India galloped 4.37% after the lender got capital infusion of Rs 300 crore from the central government. The announcement was made after market hours on Wednesday, 31 March 2010.

Index heavyweight Reliance Industries (RIL) gained 1.70% to Rs 1092.90 on expectations of robust Q4 earnings. As per reports, RIL's Q4 advance tax surged to Rs 770 crore in Q4 March 2010 from Rs 365 crore a year ago.

RIL is reportedly likely to raise crude oil imports by about 22% this year ended March 2011 as it ramps up production at its giant complex, further stamping its mark on world markets.

Aban Offshore gained 2.82% after the company secured two orders aggregating $43.5 million. The company announced the fresh orders during trading hours today, 1 April 2010.

Infrastructure stocks were in demand ahead of US Treasury Secretary Timothy Geithner's visit to India next week. As per reports, the agenda will be opening India's vast infrastructure needs to financing from US companies.

India's largest private sector utility firm Reliance Infrastructure jumped 1.66% after the company's founders raised their stake to 43% from 38% by investing more than Rs 1821 crore.

Jaiprakash Associates (up 3.14%), Punj Lloyd (up 0.34%), Lanco Infratech (up 3.82%), GVK Power & Infrastructure (up 0.45%) and GMR Infrastructure (up 0.24%), gained.

Noida Toll Bridge Company rose 3.53% after the road transport and highways ministry increased toll rates on 24 stretches of public-funded highways from today, 1 April 2010.

India's largest engineering and construction firm by net sales Larsen & Toubro rose 1.52%. The company has reportedly accumulated an order book worth over Rs 1 lakh crore, the first private sector player in the country to achieve this feat.

India's largest power equipment maker by sales Bharat Heavy Electricals rose 1.33% as provisional net profit rose 37% to Rs 4287 crore in the year ended March 2010 over the year ended March 2009. Turnover rose 21.46% to Rs 34050 crore.

Crompton Greaves moved up 4.79% to Rs 273.60. The stock hit an all-time high of Rs 274.50 in intra-day trade today, 1 April 2010. The company had on 30 March 2010 acquired UK-based electrical engineering company Power Technology Solutions for around 30 million pound (Rs 204 crore).

Geithner will meet with India's Prime Minister Manmohan Singh and the finance minister Pranab Mukherjee during a visit to New Delhi on 9 April 2010. Earlier this month, Singh said that India needed to double spending on infrastructure to improve the standard of living of its poorest citizens.

Metal stocks rose after LMEX, a gauge of six metals traded on the London Metal Exchange, rose 0.17% on 31 March 2010. Sterlite Industries (up 1%), Tata Steel (up 3.22%), Hindalco (up 1.27%), Jindal Saw (up 3.74%), JSW Steel (up 1.22%) and Hindustan Zinc (up 3.23%), edged higher.

Select auto stocks edged lower in volatile trade. India's largest tractor maker by sales Mahindra & Mahindra (M&M) fell 1.90% to Rs 534.85, off day's high of Rs 555.70. The company's total vehicle sales rose 20% to 31698 units in March 2010 over March 2009. The sales figures were released during market hours today.

India's largest car maker by sales Maruti Suzuki India declined 1.85% to Rs 1390 5 after striking day's high of Rs 1427.40. The company today said total sales rose 11% to 95,123 units in March 2010 over March 2009.

The company's total sales rose 29% to 10.18 lakh vehicles in the year ended March 2010 over the year ended March 2009.

India's largest bike maker by sales Hero Honda Motors advanced 0.43% and India's largest commercial vehicle maker by sales Tata Motors shot up 3.21%

TVS Motor Company gained 0.67% as the company's total two wheeler sales rose 24.35% to 1,46,736 units in March 2010 over March 2009. The company unveiled the monthly sales figure during trading hours today, 1 April 2010.

Rate sensitive realty shares rose on bargain hunting after a recent fall triggered by worries higher interest rate on housing loans may crimp demand. DLF (up 0.87%), Omaxe (up 1.76%), Sobha Developers (up 3.48%), Unitech (up 1.98%), HDIL (up 1.26%), gained.

Meanwhile, the introduction of the contentious service tax on apartments that are still under construction in the Union Budget 2010-2011 may reportedly put pressure on property prices.

India's largest mobile services provider by sales Bharti Airtel slumped 3.16% after Kuwait's Zain telecom, which sold its African assets to the company, announced a 39.40% slump in net profit for 2009 due to fallout from the global economic downturn.

Bharti cinched a deal on Tuesday to buy most of the African operations of Kuwait's Zain for $9 billion, making it the No.2 cellular company on the African continent and setting India's biggest carrier a tough financial and management challenge. The two companies, which entered exclusive talks in mid-February, signed a legally binding definitive agreement in Amsterdam, where Zain's Africa subsidiary is based.

India's second largest mobile services provider by sales Reliance Communications fell 0.12% on selling pressure.

Ambuja Cements declined 1.38%. The company's cement dispatch rose 11% to 19.16 lakh tones in March 2010 over March 2009.

Sugar stocks declined on fears falling global sugar prices may impact profitability.

Bajaj Hindustan (down 2.17%), Shree Renuka Sugars (down 4%), JK Sugar (down 5.11%), Sakthi Sugars (down 4.13%) and Balrampur Chini Mills (down 4.66%) edged lower.

New York raw sugar futures nearly halved to $16.59 cents a lb on Wednesday from a 29-year high of 30.40 cents a lb on 1 February 2010

Procter & Gamble Hygiene & Health Care spurted 15.15% to Rs 2315.30. The stock hit an all-time high of Rs 2372 in intra-day trade today, 1 April 2010.

Biocon gained 4.08%. Last week, Syngene International, a subsidiary of Biocon inked a collaboration pact with Endo Pharmaceuticals to develop novel biological therapeutic molecules against cancer.

Glenmark Pharmaceuticals rose 1.52% after the company's US unit got final approval from the US Food & Drug Administration for a generic drug. The company made this announcement during trading hours today, 1 April 2010.

Max India advanced 4.56% after the company said it will sell around 4% stake in Max New York Life Insurance to private lender Axis Bank.

Shree Ashtavinayak Cine Vision jumped 5% after the company said its board will meet on 6 April 2010 to consider buyback of shares. The company announced the board meet after market hours on Wednesday, 31 March 2010.

Sayaji Hotels shot up 5% after US-based Clearwater Capital Partners made an open offer to acquire an additional 20% stake in the Vadodara-based hospitality company.

Mundra Port & Special Economic Zone clocked the highest turnover of Rs 489.78 crore on BSE. ARSS Infrastructure (Rs 241.71 crore), Tata Steel (Rs 99.05 crore), Maytas Infra (Rs 77.98 crore) and Bharti Airtel (Rs 68.99 crore) were the other turnover toppers in that order.

Cals Refineries clocked the highest volume of 6.66 crore shares on BSE. FCS Software (1.46 crore shares), Mundra Port & Special Economic Zone (65.58 lakh shares), Shree Ashtvinayak Cine Vision (64 lakh shares) and Ispat Industries (62.66 lakh shares) were the other volume toppers in that order.