Market recoups most of Thursday's losses

The key benchmark indices recouped most of the previous day's losses as world stocks rose on strong US consumption data. The BSE 30-share Sensex was provisionally up 221.02 points or 1.25%, up close to 220 points from the day's low and off close to 35 points from the day's high. The Sensex had lost 1.42% on Thursday, 8 April 2010, on weak global cues.

Auto, capital goods, banking and consumer durables stocks led today's rebound. Index heavyweight Reliance Industries (RIL) also edged higher. The market breadth was strong. All the sectoral indices on BSE were in green.

The market surged in early trade on firm Asian stocks. It came off the higher level in later. The market spurted to a fresh intraday high in mid-morning trade. The market once again trimmed gains in early afternoon trade. The market surged to a fresh intraday high in afternoon trade as European markets climbed at the onset of the trading session. A bout of volatility was witnessed in mid-afternoon trade as the market rebounded from lower level after paring gains.

Funds investing in emerging-market stocks attracted the highest inflows in six months in the week ended 7 April 2010, garnering $3.27 billion, according to EPFR Global. All four big fund groups in this category took in fresh cash, with Asia ex-Japan funds helped by gains to China equity funds which had their best week since late January 2010. China equity funds drew $190 million.

Expectations of good fourth quarter result by India Inc and heavy foreign fund inflows boosted the bourses in the past few weeks with the key benchmark indices surging to their highest level in more than 25 months on Wednesday, 7 April 2010.

The market is entering an important period of quarterly earnings, with IT bellwether Infosys kickstarting the reporting season on Tuesday, 13 April 2010. The Q4 March 2010 results and management commentary on outlook could result in revision in earnings estimates of India Inc by analysts for the year ending March 2011 (FY 2011).

European stocks rose on Friday, with positive session in the US market overnight offering support despite continuing concerns about Greece. Key indices in UK, France and Germany rose by 0.67% to 1.03%.

Data released on Friday in Europe showed a mixed picture for the prospect of economic recovery among individual countries. Rising exports helped boost Germany's trade surplus more than expected in February, adding to signs Europe's largest economy is on the path to recovery. Industrial output in France, however, was unchanged in February after rising in January, underlining the challenges still facing the euro zone's second largest economy.

Meanwhile, British factory gate inflation rose in March at its fastest pace in 16 months. The figures may make concerning reading for the Bank of England which has forecast that consumer price inflation will fall back below target later this year. Bank of England on Thursday kept the bank rate unchanged at 0.5%. Meanwhile, a strong rebound in Britain's industrial output and house price data on Thursday boosted hopes that the economic recovery remained on track during the first three months of 2010.

The European Central Bank (ECB) on Thursday left its main refinance rate unchanged at 1%. Jean-Claude Trichet, President, European Central Bank, said the euro zone's recovery remains on track. He stated that growth is likely to be uneven due to special factors. But he was quick to add that price stability is to be maintained in the medium-term. The European Central Bank extended a helping hand to Greece on Thursday by prolonging easier rules on debt eligible as security against cheap central bank cash.

Most Asian stocks edged up on Friday, led by overnight gains on Wall Street as strong US retail sales data boosted confidence in recovery in the world's biggest economy. Chinese stocks rose on renewed optimism Beijing may be getting closer to allowing the yuan to appreciate against the US dollar. The key benchmark indices in China, Japan, Taiwan, Hong Kong, and Singapore rose by between 0.3% to 1.56%. But, the key benchmark indices in South Korea and Indonesia fell by between 0.2% to 0.54%.

In economic news in Asia, Japanese Finance Minister Naoto Kan said on Friday that he explained the government's fiscal policy in a meeting with the Bank of Japan's (BOJ) governor and deputy governor. Kan, after the meeting with Prime Minister Yukio Hatoyama, BOJ Governor Masaaki Shirakawa and BOJ Deputy Governor Hirohide Yamaguchi, said the government wanted to keep communicating with the central bank to end deflation and ensure an economic recovery. Meanwhile, South Korea's central bank left its key interest rate at a record low at 2% on Friday

Investors will be eyeing preliminary first quarter gross domestic product data for Asian countries next week.

Trading in US index futures indicated that the Dow could gain 15 points at the opening bell on Friday, 9 April 2010.

US stocks snapped a two-day losing streak on Thursday after retailers delivered their best sales numbers in a decade, reinvigorating confidence in recovery in the world's biggest economy. Major retail chains reported a record 9.1% jump in March same-store sales -- beating the forecast for a 6.3% gain. Stocks had a weak start after a disappointing report on initial jobless claims, which rose against an expectation of a marginal drop. The Dow Jones industrial average gained 29.55 points, or 0.27% to 10,927.07. The Standard & Poor's 500 Index rose 3.99 points, or 0.34% to 1,186.44. The Nasdaq Composite Index added 5.65 points, or 0.23% to 2,436.81.

Federal Reserve Chairman Ben Bernanke said on Thursday the central bank's decisive response to the financial crisis prevented another Great Depression.

Closer home, food prices accelerated for the second straight week in late-March, strengthening expectations of a hike in key policy rates when the Reserve Bank of India (RBI) reviews its policy on 20 April 2010. The food price index rose 17.70% in the 12 months to 27 March 2010, higher than an annual rise of 16.35% in the previous week, data showed on Thursday. The fuel price index rose an annual 12.71%, a tad below the previous week's reading of 12.75%, while the primary articles index was up 14.50% year-on-year.

The Reserve Bank of India (RBI) unexpectedly raised rates in March by 25 basis points as headline inflation continued to remain above its perceived comfort zone of 5% for the fourth straight month.

The chief statistician Pronab Sen on Wednesday said the RBI would have to further tighten monetary policy if prices continue to rise. He has said inflation could cross 10% in March, higher than Febuary's reading of 9.89% and then ease. The government will officially announce the inflation data for the month of March on 14 April 2010.

The world's second fastest growing economy, is expected to grow 8.5% in the current fiscal year that began 1 April 2010, and accelerate to 9% in the next. The speedy recovery of Asia's third-largest economy has raised concerns of a possible surge in capital inflows.

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. The June-September monsoon season 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.

Tokyo-based Research Institute for Global Change has predicted normal monsoon rains in India for the current year. Agriculture secretary P K Basu said in a media interview on Monday, 5 April 2010, that early signs indicate normal monsoon rains this year. 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 last month. The weather event, which occurs every four to seven years, brings more rain to South America and less precipitation to Asia.

But abnormally hot weather and lower than expected rains are reportedly raising the spectre of India facing another water shortage in the coming kharif season, reports suggest. Rains have been 66% lower than normal in March. Temperature has been 4 to 7 degrees above normal, making it the hottest March in almost a decade report said.

The BSE 30-share Sensex was up 221.02 points or 1.25% to 17,935.42 as per provisional figures. The Sensex rose 257.07 points at the day's high of 17,971.47 in mid-afternoon trade. The index opened almost unchanged at 17,715.16, which was also the day's low so far.

The S&P CNX Nifty was up 58.50 points or 1.11% to 5363.30 as per provisional figures.

The BSE Mid-Cap index was up 0.93% and the BSE Small-Cap index was up 1.28%.

BSE clocked turnover of Rs 4300 crore, lower than Rs 4809.18 crore on Thursday, 8 April 2010.

The market breadth, indicating the overall health of the market, was strong. On BSE, 1836 shares advanced as compared with 1048 that declined. A total of 107 shares remained unchanged.

Among the 30-member Sensex pack, 22 rose while the rest of them fell.

Reliance Industries (RIL) rose 1.96% to Rs 1125.90 on expectations of strong Q4 March 2010 results. The stock today recovered from Thursday's 2.19% slide. Reliance Industries' promoter entities have acquired shares worth Rs 113.57 crore through off-market transactions, the company said on Wednesday. Five promoters, however, have sold shares of the company worth Rs 78.03 crore through off-market transactions, the filing said.

RIL is producing 63-64 million standard cubic metres a day (mmscmd) of gas from the D6 block off India's east coast, executive director P.M.S. Prasad said on Tuesday. The company is producing 21,000 barrels per day of oil from the block, he added.

Capital goods pivotals rose on renewed buying. India's top power equipment maker by sales Bharat Heavy Electricals (Bhel) rose 2.88%. The stock hit a 52-week high of Rs 2,570 in intraday trade today. As per recent reports the company plans to re-enter wind turbine manufacturing space in the next three months.

India's largest engineering and construction firm by sales Larsen & Toubro (L&T) rose 1.13%, after falling for the last two days. The company on Monday said it has received an order worth Rs 1,060 crore from Gujarat State Petroleum Corporation (GSPC) to build an offshore oil platform.

Among other capital goods stocks, SKF India, Punj Lloyd, ABB, BEML, Siemens, Praj Industries rose by between 0.33% to 2.88%.

Consumer durables stocks rose on hopes of rise in consumption on increased disposable income after finance minister Pranab Mukherjee hiked the personal income tax slabs in the union budget 2010-11. Gitanjali Gems, Videocon Industries, Titan Industries, Blue Star, Rajesh Exports rose by between 0.16% to 3.35%.

Auto stocks rose on robust March 2010 sales figures. Vehicle sales in India should grow 10-15% in the fiscal year to March 2011, an industry body said on Friday. In 2009/10, 1.23 crore vehicles were sold in the country, up 26.4% from the previous fiscal year, data from the Society of Indian Automobile Manufacturers (SIAM) showed.

India's largest commercial vehicle maker by sales Tata Motors rose 4.27% as company reported that the Land Rover brand had in March reported its best-ever monthly sales in the British market. Land Rover on Thursday reported sales of 11,300 units in March, up 67% over the same month last year. The stock was the top gainer form the Sensex pack.

The Tata Motors stocks had lost 2.41% on Thursday on reports one of its ultra-cheap Nano cars caught fire on Wednesday, 7 April 2010, perhaps due to a technical snag in its rear portion.

India's top small car maker by sales, Maruti Suzuki India was flat. The company said on Monday it has raised the price of its vehicles across different models due to higher input costs and expenses from the introduction of the new Bharat Stage IV emission norms.

India's second largest bike maker by sales Bajaj Auto rose 0.29%. Bajaj Auto will distance itself from the parent brand Bajaj and focus on just four motorcycle brands - Boxer, Discover, Pulsar and KTM - as well as the rear-engine three-wheeler brand, phasing out the rest, managing director Rajiv Bajaj was quoted by the media as saying on Thursday. India's leading bike maker by sales Hero Honda Motors rose 2.17%.

India's largest tractor maker by sales Mahindra & Mahindra rose 0.73%. As per recent reports the company has raised prices of utility vehicles due to a rise in input and fuel costs, and expenses associated with migrating to new emission norms.

From this month, 13 cities across the country have switched over to Bharat Stage IV emission norms. Following this, many carmakers, have increased the vehicle prices. With newer technology required for upgradation, auto companies had said they would have to pass on the increased cost to customers. In February, following the 2% increase in excise duty on all non-oil products to 10% in the Budget, auto players had hiked prices of vehicles by up to Rs 70,000.

Automobile firms are seen reporting strong Q4 results on a healthy volume growth. However, the sector is witnessing a headwind of rising input costs. Recently, Maruti Suzuki raised car prices due to a surge in input costs and shift to new emission norms from 1 April 2010. M&M, too, hike utility vehicles prices recently.

India's largest IT exporter by sales Infosys rose 0.77% on market talks it may announce a special dividend for the year ended March 2010 (FY 2010) when it unveils its Q4 March 2010 and FY 2010 results early next week. Infosys has declared special dividend every alternate year over the few years i.e. in FY 2004, FY 2006 and FY 2008. Infosys ADR rose 0.75% on Thursday.

The key focus is on Infosys' guidance for the year ending March 2011 (FY 2011). The company unveils its Q4 March 2010 and year-ended March 2010 (FY 2010) results on 13 April 2010. Market men expect a muted revenue and earnings guidance from the IT major after taking into account cross currency impact, planned employee addition, wage hike and higher taxes. The government hiked the minimum alternate tax (MAT) to 18% from 15% in the Union Budget 2010-2011.

Infosys is seen reporting about 1% to 2% growth in net profit in Q4 March 2010 over Q3 December 2009. The IT bellwether's revenue is seen rising 2% to 3% sequentially on the back of higher volume growth.

Banking stocks rose on a jump in credit growth. India's largest bank by net profit and branch network State Bank of India rose 0.31% after falling for the past three days. Chairman O.P. Bhatt said on Tuesday the bank may raise its lending and deposit rates in a couple of months. The state-owned bank will wait for the Indian central bank's monetary policy action to take a final call on interest moves, Bhatt said.

India's largest private sector bank by net profit ICICI Bank rose 1.82% after falling in the last two sessions. Its ADR fell 1.06% on Thursday. India's second largest private sector bank by net profit HDFC Bank rose 2.88% after declining 1.7% on Thursday. Its ADR was flat on Thursday.

India's largest mortgage finance firm by total income Housing Development Finance Corporation rose 4.53% after declining for last two days.

As per the latest fortnightly report released by the RBI, banks disbursed an additional Rs 1,15,548 crore in the 15 days up to 26 March 2010, almost 25% of the Rs 4,64,849 crore disbursed in the entire financial year. Thus, fourth quarter of FY 2010 accounted for 47% of the total loans disbursed during the entire FY 2010. The unusually high disbursals pushed the year on-year growth in credit to 16.7% at the end of the financial year. Banks typically step updisbursals in the last weeks of a quarter, even more so towards the end of the year, to meet targets. However, disbursals in the fortnight up to 26 March 2010 are high even by year-end standards, surpassing the Rs 79,500 crore disbursed in the last fortnight of FY 2009.

HEG rose 1.58% after the company said it will raise Rs 400 crore by share sales to fund expansion plans and meet working capital needs.

Tata Tea rose 1.70%, after the company's board approved forming of a joint venture with PepsiCo Inc for non-carbonated health beverages.