Pivotals help Sensex score gains for the third day in a row

Volatility ruled the roost as the key benchmark indices came sharply off the higher level in the last one hour of trade. The late slide materialised soon after a sharp surge in mid-afternoon trade that was driven by rally in pivotals such as State Bank of India (SBI), Reliance Industries (RIL) and Tata Motors. The BSE 30-share Sensex rose 101.43 points or 0.58%, off close to 205 points from the day's high and up close to 165 points from the day's low.

Volatility in world stocks triggered volatility on the domestic bourses. European shares moved into the red from green after the Eurostat statistics agency said Greece's budget deficit may be revised upwards on uncertainties over issues including off-market swaps. US index futures dropped after the news.

The market breadth, indicating the overall health of the market, weakened substantially in late trade when compared to a strong breadth in mid-afternoon trade. IT, realty and metal stocks fell. Index heavyweight Reliance Industries pared intraday gains. India's biggest commercial bank in terms of branch network State Bank of India (SBI) jumped on reports of brokerage upgrades on the stock. FMCG stocks also rose.

Intraday volatility was high. The market recovered soon after an initial slide caused by weak Asian stocks. The market weakened once again but recovered shortly thereafter. The market surged in mid-morning trade with the Sensex hitting a fresh intraday high. The market trimmed gains in early afternoon trade. The market hit a fresh intraday high in afternoon trade as European stocks rose in early trade. The market extended gains in mid-afternoon trade. A steep slide was witnessed in late trade as European stocks faltered on worries over Greece's financial position.

NSE's volatility index jumped 6.76% to 20.53, after a steep slide in the preceding two trading sessions. India VIX is a measure of the market's expectation of volatility over the next 30 calendar days. The index is calculated based on the S&P CNX Nifty options prices.

The latest data showed the annual food and fuel inflation ticked higher. 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.

On the flip side, in its half-yearly World Economic Outlook, the IMF on Wednesday pegged India's GDP growth at 8.75% in calendar 2010 and 8.5% in calendar 2011. The IMF said 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.

Its World Economic Outlook forecasts for global growth nudged up to 4.2% in 2010. The global economy is recovering from recession more quickly than expected but rescue efforts have worsened public finances, and if not reined in, will lead to a debt explosion, the IMF said on Wednesday.

Emerging market economies like China and India are leading the upturn, it said, with 2010 growth expected to be nearly three times as fast as that in advanced economies. The IMF forecast growth in emerging and developing economies would rise to 6.3% this year and 6.5% next year.

Bank shares led European markets lower in volatile trade on Thursday as investors worried about Greece's financial position. Credit Suisse's stock declined after posting earnings. The key benchmark indices in UK, France and Germany were down by between 0.82% and 1.15%.

Asian stocks fell on Thursday as several major US firms issued disappointing profit outlooks, casting doubts on the strength of a global recovery, and as investors grew impatient for action on Greece's debt crisis. The key benchmark indices in China, Hong Kong, Japan, South Korea and Taiwan fell by between 0.15% to 1.27%. But, key benchmark indices in Indonesia and Singapore rose by between 0.44% to 0.47%.

Japan's exports jumped 43.5% in March 2010 from a year earlier as demand for the nation's cars and gadgets increased helped by recovering global economy.

US index futures fell in volatile trade. Trading in US index futures indicated that the Dow could fall 39 points at the opening bell on Thursday, 22 April 2010.

US stocks finished little changed on Wednesday as disappointing outlooks from healthcare companies offset strong earnings from Morgan Stanley. The Dow Jones industrial average edged up 7.86 points, or 0.07%, at 11,124.92. The Standard & Poor's 500 Index dipped 1.23 points, or 0.10%, to 1,205.94. The Nasdaq Composite Index inched up 4.30 points, or 0.17%, to 2,504.61.

Back home, the focus is on the fourth quarter corporate results of India Inc and outlook provided by management for the current year. The combined net profit of a total of 123 companies rose 29.7% to Rs 9532 crore on 22.8% rise in sales to Rs 64688 crore in the quarter ended March 2010 over the quarter ended March 2009.

Indian stocks rose for a third day in a row today 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. From a recent low of 17400.68 on 19 April 2010, Sensex has risen 173.31 points or 0.9% in the last three trading sessions. 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 RBI said there is need to move in a calibrated manner in the direction of normalising its policy instruments given that the economic recovery is firmly in place. The central bank said it has to do a fine balancing act and ensure that while absorbing excess liquidity, the government borrowing programme is not hampered. Notwithstanding lower budgeted government borrowings for FY 2011, fresh issuance of securities will be 36.3% higher than in the previous year, the central bank said.

The RBI said the economy is recovering rapidly from a slowdown but inflationary pressures, which were triggered by supply side factors, are now developing into a wider inflationary process. The central bank said there in uncertainty about the shape and pace of ongoing global economic recovery.

The central bank 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. The quick rebound of the Indian economy in the year ended March 2010 (FY 2010) despite the failure of monsoon rainfall suggests that the Indian economy has become resilient, the RBI said. Growth in FY 2011 is expected to be more broad-based than in FY 2010. Prime Minister Manmohan Singh has pegged India's GDP growth at 8.25% for FY 2011.

The monsoon holds key. 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) will issue its first monsoon forecast for the south west monsoon on Friday, 23 April 2010. A weakening El Nino is a positive sign for the monsoon, Ajit Tyagi, director general at the India Meteorological Department, had said on 18 March 2010.

The BSE 30-share Sensex rose 101.43 points or 0.58% to 17,573.99. The Sensex rose 305.78 points at the day's high of 17,778.34 in mid-afternoon trade. The index fell 64.54 points at the day's low of 17,408.02 in early trade.

The S&P CNX Nifty rose 24.45 points or 0.47% to 5269.35.

The BSE Mid-Cap index fell 0.07%. The BSE Small-Cap index rose 0.07%. Both the indices underperformed the Sensex.

Sectoral indices on BSE were mixed. BSE Oil & Gas index (up 1.25%), Auto index (up 0.9%), Bankex (up 0.75%), and FMCG index (up 0.72%), outperformed the Sensex. Consumer Durables index (up 0.51%), PSU index (up 0.41%), IT index (up 0.06%), Capital Goods index (down 0.07%), Healthcare index (down 0.13%), Power index (down 0.23%), Metal index (down 0.61%), and Realty index (down 1.34%), underperformed the Sensex.

The market breadth, indicating the overall health of the market, weakened substantially in late trade when compared to a strong breadth in mid-afternoon trade. On BSE, 1,496 shares advanced as compared with 1,402 that declined. A total of 103 shares were unchanged.

From the 30 share Sensex pack, 15 stocks rose while the rest declined.

BSE clocked turnover of Rs 4980 crore, higher than Rs 4669.93 crore on Wednesday, 21 April 2010.

India's biggest commercial bank in terms of branch network State Bank of India jumped 5.58% on reports a prominent foreign brokerage has raised its rating on the stock to 'neutral' from 'sell'. The stock was the top gainer form Sensex pack. Another foreign brokerage has reportedly predicted a re-rating of the counter on the back of an expected strong lending growth.

India's largest private sector bank by net profit ICICI Bank fell 0.89%, reversing early gains. India's second largest private sector bank by net profit HDFC Bank fell 0.09%.

Axis Bank fell 1.09% after the stock surged in the past two trading sessions on the back of 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 during market hours on Tuesday, 20 April 2010.

The Reserve Bank of India (RBI) on Wednesday said a private sector bank must obtain RBI's approval for an initial public offer (IPOs). The central bank said the issue price for an IPO should be based on merchant banker's recommendation. All preferential issues would also require prior approval of RBI. Pricing of preferential issues by listed banks may be as per Sebi formula, while for unlisted banks the fair value may be determined by a chartered accountant or a merchant banker, RBI said in a notification.

Private sector banks also need to approach RBI for prior in principle approval in case of a Qualified Institutional Placement (QIP). Banks need to approach RBI along with details of the issue once the bank's board approves the proposal of raising capital through this route. The RBI also said allotment of shares to the investors under a QIP would be subject to compliance with Sebi guidelines on QIPs and RBI guidelines dated 3 February 2004.

Once the allotment process under QIP is complete, the banks would also be required to furnish complete details of the issue to RBI for seeking post facto approval. This would be irrespective of whether any acquisition results in shareholding of 5% or more of the paid up capital of the bank.

India's largest mortgage finance firm by total income Housing Development Finance Corporation (HDFC) rose 1.05%, reversing early fall. The company, last week, 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.

Index heavyweight Reliance Industries (RIL) rose 2.03% to Rs 1075.55. But, the stock came off the day's high of Rs 1093.90. The stock was the third major gainer form the Sensex pack. RIL is seen reporting strong Q4 March 2010 results on the back of higher gas output from the prolific Krishna-Godavari basin. RIL announces Q4 results on Friday, 23 April 2010.

Cement major ACC fell 1.3% after consolidated net profit declined 1.6% to Rs 392.88 crore in Q1 March 2010 over Q1 March 2009. The result was announced during trading hours today.

India's largest engineering and construction firm by sales Larsen & Toubro (L&T) fell 0.05%, with the stock falling 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.

But, India's largest power equipment maker by sales Bharat Heavy Electricals rose 0.13%.

Realty shares fell on profit taking after a relief rally in the past two days that was triggered by the Reserve Bank of India keeping the risk weightage on loans to commercial real estate sector unchanged at its annual monetary policy review on Tuesday 20 April 2010. Sobha Developers, Omaxe, Housing Development & Infrastructure, Peninsula Land and DLF fell between 0.37% to 5.59%. A section of the market was expecting the Reserve Bank of India to raise the risk weightage on loans to commercial real estate to prevent asset bubbles.

Unitech fell 1.69%, with the stock giving up some of the previous days gains. The stock had risen 2.46% on Wednesday after 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.

The board also approved the amalgamation of two wholly owned subsidiaries, Aditya Properties and Unitech Holdings, with Unitech. The board also approved hiving off the shares and investments held in Unitech's telecommunications business to a wholly-owned subsidiary of Unitech Infra.

IT stocks fell in volatile trade. India's third largest software services exporter by sales Wipro fell 0.26% to Rs 702.95. The stock hit high of Rs 714.80 and a low of Rs 698.05. The company will announce its Q4 result on Friday, 23 April 2010. India's second largest software exporter by sales, Infosys Technologies, was flat at Rs 2718.05. The stock hit high of Rs 2760 and a low of Rs 2696.

India's largest information technology services provider by sales, TCS fell 0.08% to Rs 785.30. The stock hit high of Rs 793.40 and a low of Rs 781.25. The company posted 9.7% growth in consolidated net profit as per Indian accounting standards to Rs 2,001 crore on 1.17% rise in revenues to Rs 7738 crore in Q4 March 2010 over Q3 December 2009. The result was announced after the market hours on Monday 19 April 2010.

At the time of announcing the results, TCS chief executive officer and managing director N Chandrasekaran said the company's sales and execution machine is primed and the company has laid a solid platform for growth. There is a significant traction for TCS' strategy of full services which together with TCS' global engagement model positions the company well for accelerated growth, Chandrasekaran said.

HCL Technologies rose 1.79%, extending Wednesday's 8.32% rally triggered by strong Q3 March 2010 results. Consolidated net profit as per US accounting standards rose 15.9% to Rs 344 crore on 1.4% growth in revenue to Rs 3075.70 crore in Q3 March 2010 over Q2 December 2009. The company announced the result before trading hours on Wednesday, 21 April 2010. During Q3 March 2010, HCL Technologies won 13 new deals, both outsourcing and transformational in nature from diverse verticals across US, Europe and Asia.

FMCG stocks rose on expectation of good Q4 results. Hindustan Unilever ITC, Nestle India, Tata Tea rose by between 0.65% to 2.09%.

Metal stocks fell after LMEX, a gauge of six metals traded on the London Metal Exchange, fell 0.82% on Wednesday, 21 April 2010. JSW Steel, Hindustan Zinc, National Aluminum Company, Hindalco Industries fell by between 0.25% to 1.67%.

India's largest private sector steel maker by sales Tata Steel fell 1.83%. 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.

Rate sensitive auto stocks rose on expectations of strong Q4 result. Vehicle sales in India should grow 10-15% in the fiscal year to March 2011, an industry body said on 9 April 2010. In 2009/10, a total of 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 top small car maker by sales, Maruti Suzuki India rose 0.26%, with the scrip gaining for the third straight day. The company raised prices of its vehicles across different models early this month due to higher input costs and expenses from the introduction of the new Bharat Stage IV emission norms.

India's largest tractor maker by sales Mahindra & Mahindra was flat. Mahindra & Mahindra said on 16 April 2010 that it is buying out Renault's stake in a joint venture that makes the Logan sedan. The Renault name and logo will continue to be used on the Logan till the end of calendar 2010, the company said in a statement.

India's second largest bike maker by sales Bajaj Auto rose 0.88%, with the scrip gaining for the third straight day. Bajaj Auto on Friday, 16 April 2010 said it has raised its stake in KTM Power Sports AG, Europe's second largest motorcycle maker.

Motorbike maker Hero Honda Motors rose 1.19%, with the scrip gaining for the third straight day. Net profit jumped 48.8% to Rs 598.81 crore on 19.6% rise in total income to Rs 4191.81 crore in Q4 March 2010 over Q4 March 2009. The company announced the results after trading hours on Monday 19 April 2010.

At the time of announcing the Q4 results, Hero Honda managing director and CEO Pawan Munjal said factors like movement in commodity prices, inflation and interest rate scenario will play a crucial role in the growth and profitability of the two-wheeler industry, going ahead. He said Hero Honda has set ambitious milestones for the current year after vehicle sales surpassed the company's target in the year ended March 2010 (FY 2010).

He said the company is looking forward to a series of defining initiatives in the year ending March 2011 (FY 2011), including aggressively expanding geographical reach, building on production capacities and augmenting strong brand portfolio.

India's largest commercial vehicle maker by sales Tata Motors gained 3.34%, with the scrip gaining for the third straight day. The company said on Thursday 15 April 2010 that its global vehicle sales rose 39% to 101,712 units in March 2010 over March 2009. This includes sales of UK-based Jaguar and land Rover brands that rose 43% to 23,538 vehicles in March 2010 over March 2009.

Most carmakers increased vehicle prices from 1 April 2010 after 13 cities across the country switched over to Bharat Stage IV emission norms. Earlier in February 2010, 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, hiked utility vehicles prices recently.

FCS Software clocked the highest volume of 2.08 crore shares on BSE. Cals Refineries (1.22 crore shares), Birla Power Solutions (93 lakh shares), Mangalore Chemicals & Fertilisers (61 lakh shares) and Unitech (56 lakh shares) were the other other volume toppers in that order.

State Bank of India clocked the highest turnover of Rs 361.04 crore on BSE. Tata Motors (Rs 181.82 crore), Reliance Industries (Rs 143.45 crore), ARSS Infra (Rs 117.65 crore) and Tata Steel (Rs 109.78 crore) were the other turnover toppers in that order.