PSU OMCs sizzle

Profit booking in late trade capped gains on the domestic bourses as European stocks fell in volatile trade on unease over euro zone sovereign debt levels. The BSE 30-share Sensex was up 55.24 points or 0.32%, off 87.90 points from the day's high. Most Asian stocks rose. The Lok Sabha on Thursday passed the Finance Bill 2010 with some minor changes in tax proposals. The government has pledged to cut the fiscal deficit, promised increase spending on infrastructure and announced changes in personal income tax slabs for individuals in the Union Budget 2010-2011.

NSE's volatility index India VIX lost 3.96% to 20.35, extending Thursday's fall. 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 market breadth was strong. Except the BSE Metal index, all other sectoral indices on the BSE were in green. Metal stocks declined, mirroring fall in the commodity prices on the London Metal Exchange on Thursday, 29 April 2010. IT pivotals saw divergent trend. PSU OMCs jumped on reports the firms will get compensation for losses on account of subsidised sale of some petroleum products.

Most auto stocks advanced ahead of the release of April 2010 monthly sales data next week. Tata Motors struck 52-week high on BSE. Among heavyweights, ICICI Bank pared early gains and Reliance Industries edged lower, erasing early gains.

The market surged in early trade on positive global cues. It extended gains in morning trade. The market pared gains in mid-morning trade on profit booking in select pivotals. The market regained strength in early afternoon trade. The market once again pared gains in afternoon trade. The market held positive zone in mid-afternoon trade, tracking gains in European stocks. The market was further off the day's high in late trade as European stocks declined in volatile trade.

In the futures & options segment, a good amount of rollover of positions was witnessed from April 2010 series to May 2010 series as the April 2010 derivatives contracts expired on Thursday. The revision in market lot size in the derivatives segment became effective from today, 30 April 2010. It may be recalled that the National Stock Exchange (NSE) had on 31 March 2010 announced changes in market lot size of a number of stocks in the derivatives segment as a part of a bi-annual review. The market lot size of 111 stocks was revised downwards and for 59 stocks it was revised upwards. The market lot size of 7 stocks was kept unchanged.

The Lok Sabha on Thursday, 29 April 2010, passed the Finance Minister Pranab Mukherjee's Budget for 2010-11 by a voice vote with minor changes. The concessions will reduce the incidence of service tax on housing and air travel, incentivise construction of big hospitals, keep cancer and anti-AIDs drugs cheap and provide relief to debt-ridden coffee growers. However, the government held firm not to roll back hike in prices of petrol and diesel. With the passage of the Bill by the Lok Sabha, the three-stage budgetary process stands completed. Changes in personal income tax slabs for individuals will result in increase in disposable incomes which in turn may boost consumption.

European shares drifted lower in volatile trade on unease over euro zone sovereign debt levels. The key benchmark indices in France and UK fell 0.56% and 0.59% respectively. However Germany's DAX rose 0.20%.

Asian markets rose for the first time in four days as improving company earnings boosted speculation the global economy will sustain its recovery. Hopes of a quick Greek rescue package also aided gains. The key benchmark indices in China, Hong Kong, Japan, South Korea, Singapore and Indonesia were up by between 0.08% to 1.59%. But, Taiwan's Taiwan Weighted index fell 0.62%.

Greece is facing financial crisis and the likelihood of default on sovereign loans of over $50 billion has prompted the Standard and Poor's to downgrade country's credit rating to junk grade.

Japan's central bank on Friday voted unanimously to keep its key policy interest rate at near zero as widely expected. The Bank of Japan also kept its special monetary stimulus programs unchanged.

US stocks surged on Thursday, 29 April 2010, on waning fears over the euro zone debt crisis. The Dow Jones Industrial Average rose 122.05 points or 1.10% to 11,167.32. The Nasdaq composite gained 40.19 points or 1.63% to 2,511.92 and the Standard & Poor's 500 index was up 15.42 points or 1.29% to 1,206.78.

Trading in US index futures indicated that the Dow could fall 3 points at the opening bell on Friday, 30 April 2010.

Back home, the Q4 March 2010 corporate earnings announced so far have been good. The combined net profit of a total of 660 companies rose 25.80% to Rs 33470 crore on 32.50% rise in sales to Rs 302678 crore in the quarter ended March 2010 over the quarter ended March 2009.

The government on Thursday, 29 April 2010, kicked off its disinvestment programme for the fiscal year March 2011 with the initial public offering (IPO) of the state-run SJVN. The government plans to raise Rs 1000 crore through the IPO, and is offloading 10% of its stake in the company. The IPO was subscribed 56% by 16:00 IST on day two of the issue today.

The Congress-led United Progressive Alliance government sailed through a trial of strength in parliament on Tuesday, 27 April 2010, by defeating the cut motion demanded by opposition parties against an unpopular hike in fuel and fertiliser prices with smaller parties giving it a leg up to achieve a surprisingly strong victory for the government. However, major reforms may take a backseat for the some time to come as there is a stiff resistance by the opposition on fears it may hurt the poor.

On the macro front, the latest data showed infrastructure sector output jumped 7.2% in March 2010 from a year earlier, higher than an upwardly revised rise of 4.7% in February 2010.

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 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 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.

The RBI at its annual policy review, last week, 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.

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.

The BSE 30-share Sensex was up 55.24 points or 0.32% to 17,558.71. The index rose 143.14 points at the day's high of 17,646.61 in morning trade. The Sensex was unchanged at the day's low of 17,503.47 in early trade.

The S&P CNX Nifty was up 23.85 points or 0.45% to 5278

The market breadth, indicating the overall health of the market, was positive. On BSE, 1687 shares advanced as compared with 1253 that declined. A total of 98 shares remained unchanged. The breadth was much stronger for a better part of the trading session.

The BSE Mid-Cap index rose 1% and the BSE Small-Cap index rose 0.39%. Both these indices outperformed the Sensex.

All the sectoral indices on BSE, except the BSE Metal index, logged gains. The BSE Realty index (up 1.77%), the BSE Consumer Durables index (up 1.02%), the BSE Bankex (up 0.55%), the BSE Oil & Gas index (up 0.85%), the BSE Auto index (up 1.51%), the BSE Healthcare index (up 1.12%), the BSE IT index (up 0.85%), the BSE Teck Index (up 0.71%), the BSE Capital Goods index (up 0.54%), the BSE PSU index (up 0.73%), and the BSE Power index (up 0.53%), outperformed the Sensex.

The BSE FMCG index (up 0.19%), and the BSE Metal index (down 0.41%), underperformed the Sensex.

The turnover on BSE amounted to Rs 4736 crore, higher than Rs 4,275.92 crore on Thursday, 29 April 2010.

From the 30 share Sensex pack, 17 stocks rose while the rest fell.

Most auto stocks advanced ahead of the release of April 2010 monthly sales data next week. India's largest commercial vehicle maker by sales Tata Motors surged 3.92% to Rs 875.90 after its ADR jumped 2.46% on Thursday. The stock hit a 52-week high of Rs 877.90 today. The stock was the top gainer from the Sensex pack. Tata Motors on Friday launched a new range of its compact car Indica Vista. The Indica Vista was originally launched in August 2008.

India's largest tractor maker by sales Mahindra & Mahindra (M&M) rose 1.03%. However, India's largest car maker by sales Maruti Suzuki India fell 0.57%.

India's largest motorbike maker by sales Hero Honda Motors rose 3.45%. India's second largest motorbike maker by sales Bajaj Auto rose 1.66%. India's third biggest two-wheeler maker by sales TVS Motor Company advanced 2.32%.

Ashok Leyland jumped 8.89% after net profit surged 317.7% to Rs 222.66 crore on 141.3% rise in sales to Rs 2939.04 crore in Q4 March 2010 over Q4 March 2009. The result was announced at the fag end of the trading session on Thursday, 29 April 2010.

Index heavyweight Reliance Industries (RIL) was down 0.41% to Rs 1030.50. The stock came off the day's high of Rs 1045. RIL reportedly plans to sell gas to retail consumers in the US and will use its newly built partnership with Atlas Energy to build a brand name in the US market.

RIL said on Wednesday it had discovered oil in one of its exploration blocks in the Cambay basin on India's western coast, the block in which it holds 100% controlling interest. This is its fourth oil discovery in the region.

Shares of PSU OMCs surged on reports the government has formed an inter-ministerial panel headed by Finance Minister Pranab Mukherjee to find ways to compensate the oil marketing companies for Rs 19000 crore worth of losses on account of subsidised sale of kerosene and domestic LPG in the year ended March 2010. HPCL (up 6.47%), BPCL (up 5.73%), and Indian Oil Corporation (up 7.64%), surged.

Realty shares gained after Finance Minister Pranab Mukherjee on Thursday, 29 April 2010 announced concessions to reduce the incidence of service tax on housing. DLF (up 0.92%), HDIL (up 1.50%), Unitech (up 2.84%), Omaxe (up 0.37%), and Indiabulls Real Estate (up 7.80%), rose.

Puravankara Projects soared 4.82% after consolidated net profit jumped 199.93% to Rs 43.73 crore on 80.82% surge in net sales to Rs 122.81 crore in Q4 March 2010 over Q4 March 2009. The company declared its results after market hours on Thursday, 29 April 2010.

Interest rate sensitive banking shares edged higher for the second day in a row on expectations of strong lending growth in a rebounding economy. India's second largest private sector bank by net profit HDFC Bank gained 0.56% after its ADR surged 3.88% on Thursday.

India's largest private sector bank by net profit ICICI Bank was almost flat at Rs 945.50. The stock came off the day's high of Rs 964.10

India's biggest commercial bank in terms of branch network State Bank of India rose 0.82%, extending recent strong gains triggered by brokerage upgrades on the counter. A prominent foreign brokerage 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.

ING Vysya Bank gained 4.93% after net profit rose 38.2% to Rs 67.91 crore despite 1.4% fall in total income to Rs 746.54 crore in Q4 March 2010 over Q4 March 2009. The bank declared its results after market hours on Thursday, 29 April 2010.

Indiabulls Financial Services climbed 10.35%. Consolidated net profit jumped 203% to Rs 301.30 crore on 18.5% fall in total income to Rs 1635.04 crore in the year ended March 2010 over the year ended March 2009. The company declared its results on 26 April 2010.

Shriram Transport Finance Company spurted 7.45%. The company's net profit surged 71.9% to Rs 264.42 crore on 24.6% rise in total income to Rs 1229.24 crore in Q4 March 2010 over Q4 March 2009. The company declared its results on 29 April 2010.

Infrastructure stocks extended gains fore the second day on reports the government may allow infrastructure firms to refinance part of their domestic debt through cheaper overseas borrowings.

Larsen & Toubro (up 0.18%), GMR Infrastructure (up 1.21%), Punj Lloyd (up 0.46%), Lanco Infratech (up 1.58%), GVK Power & Infrastructure (up 0.33%), edged higher.

India's largest private sector utility firm by sales Reliance Infrastructure rose 1.05%, extending Thursday's gain. As per reports its unit Reliance Cementation is planning to set up a Rs 1500 crore cement plant in Karnataka.

ABB fell 1.13% after net profit slumped 91.50% to Rs 6.63 crore on 4.9% rise in total income to Rs 1477.10 crore in Q1 March 2010 over Q1 March 2009. The result was announced during trading hours today, 30 April 2010.

Kirloskar Brothers rose 2.98% after company bought a 90% stake in South Africa-based Braybar for Rs 11 crore. The announcement was made after market hours on Thursday, 29 April 2010.

IT pivotals saw divergent trend. India's third largest software services exporter Wipro lost 2.10% to Rs 673.80. But, India's largest software services exporter TCS gained 0.59% and India's second largest software services exporter Infosys rose 0.88%.

HCL Technologies rose 1.75% after the company signed an agreement with Melbourne IT to support the latter's integrated web services business transformation project. The announcement was made during trading hours today, 30 April 2010.

Metal stocks declined after LMEX, a gauge of six metals traded on the London Metal Exchange, slipped 0.51% on Thursday, 29 April 2010. Hindalco Industries (down 1.06%), Steel Authority of India (down 1.29%), Tata Steel (down 2.05%), and JSW Steel (down 0.32%), fell.

UltraTech Cement fell 4.18%, extending a 5% slump on Thursday after the company said at the time of announcing Q4 March 2010 results during trading hours on Thursday that a significant capacity addition in the year ended March 2010 and the likely addition of a large capacity in the current financial year will put pressure on cement prices. The company's net profit declined 26.1% to Rs 228.54 crore in Q4 March 2010 over Q4 March 2009.

Reliance Natural Resources clocked the highest volume of 1.49 crore shares on BSE. IFCI (79.23 lakh shares), Ashok Leyland (60.11 lakh shares), Ispat Industries (41.55 lakh shares) and Unitech (39.98 lakh shares) were the other volume toppers in that order.

Tata Steel clocked the highest turnover of Rs 132.52 crore on BSE. State Bank of India (Rs 118.53 crore), Tata Motors (Rs 115.96 crore), Reliance Natural Resources (Rs 104.16 crore) and Panoramic Universal (Rs 93.10 crore) were the other turnover toppers in that order.

United Phosphorus jumped 15.25%. The company's consolidated net profit rose 9.7% to Rs 529.64 crore on 10.2% rise in net sales to Rs 5,290.04 crore in the year ended March 2010 over the year ended March 2009. The company declared its results on 29 April 2010.