Small-cap, mid-cap indices underperform Sensex

The key benchmark indices gained for the fourth straight day on higher European stocks and gains in US index futures. Optimism about the fourth quarter corporate earnings and hopes of a normal monsoon this year aided the rally. The BSE 30-share Sensex rose 120.21 points or 0.68%, off close to 30 points from the day's high and up close to 160 points from the day's low. But, the market breadth was negative.

Banking, realty and capital goods stocks rose. Index heavyweight Reliance Industries (RIL) rose ahead of Q4 result. IT bellwether Wipro fell in volatile trade after the company announced a 2:3 bonus issue. Most Asian stocks fell after Moody's on Thursday downgraded Greece's sovereign rating.

From a recent low of 17,400.68 on Monday, 19 April 2010, the BSE Sensex has risen 293.52 points or 1.68% in the last four trading sessions.

Stocks were volatile today. A surprise bonus issue from Wipro lifted the bourses at the onset of the trading session as Indian stocks shrugged off weak Asian peers. The market came off the higher level later. It soon regained strength. The market surged to a fresh intraday high in mid-morning trade. The market moved in a range in afternoon trade. The market pared gains in volatile afternoon trade. The market regained strength in mid-afternoon trade as European stocks rose. The market extended gains in late trade.

The Q4 March 2010 results announced so far have been good. The combined net profit of a total of 158 companies rose 32.2% to Rs 12429 crore on 21% rise in sales to Rs 81362 crore in the quarter ended March 2010 over the quarter ended March 2009.

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, it said. Good monsoon rains would help raise farm output 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.

European shares edged higher on Friday, with banking stocks rebounding after Greek Prime Minister George Papandreou asked for the activation of an EU/IMF aid package to pull the country out of its debt crisis. The key benchmark indices in UK, France and Germany rose 0.78% to 1.44%.

Greece asked European governments and the IMF on Friday to trigger billions of euros in emergency loans in what could be the largest state bailout ever attempted. Prime Minister George Papandreou asked for the 45 billion euro ($60.5 billion) package put together by the European Union and International Monetary Fund to be activated after months of markets pushing Greek borrowing costs ever higher.

On Thursday, the European Union had increased its estimate of the Greece's 2009 budget deficit. Eurostat, the European statistics agency, raised its estimate of the country's budget deficit for last year to 13.6% of gross domestic product, above the Greek government's recent estimate of 12.9%. The ratio of debt to GDP stood at 115.1%, compared with the government's estimate of 113.4%.

On the same day, Moody's Investors Service had downgraded Greece's sovereign rating and said it may lower it further, citing the risk that the debt-laden country may end up paying a lot more for its borrowing than previously thought.

Asian stocks declined after Moody's on Thursday cut its ratings on Greece's sovereign debt. The key benchmark indices in Hong Kong, China, Indonesia and South Korea fell by between 0.14% to 0.98%. But, key benchmark indices in Singapore and Taiwan rose by between 0.08% to 0.33%.

US index futures reversed initial losses. Trading in US index futures indicated that the Dow could gain 16 points at the opening bell on Friday, 23 April 2010.

US stocks staged a late-day comeback on Thursday as another steady drum beat of strong quarterly profits from consumer bellwethers like Starbucks Corp outweighed worries about Greece's finances. The Dow Jones Industrial Average rose 9.37 points, or 0.08%, to 11,134.29. The Standard & Poor's 500 Index rose 2.73 points, or 0.23%, to 1,208.67. The Nasdaq Composite Index gained 14.46 points, or 0.58%, to 2,519.07.

The number of US workers filing new claims for jobless aid fell last week as the labor market gradually heals and producer price data showed inflation remained muted despite a surge in food costs last month.

Back home, 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 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. 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 rose 120.21 points or 0.68% to 17,694.20. The Sensex rose 151.89 points at the day's high of 17,725.88 in mid-morning trade. The index fell 40.11 points at the day's low of 17,533.88 in early trade.

The S&P CNX Nifty rose 34.75 points or 0.66% to 5304.10.

The BSE Mid-Cap index rose 0.3% and the BSE Small-Cap index rose 0.51%. Both the indices underperformed the Sensex.

Most of the sectoral indices on BSE rose. BSE Bankex (up 1.66%), Capital Goods index (up 1.22%) outperformed the Sensex. BSE Oil & Gas index (up 0.66%), Realty index (up 0.57%), FMCG index (up 0.52%), PSU index (up 0.34%), Auto index (up 0.28%), Power index (up 0.08%), IT index (up 0.08%), Healthcare index (down 0.2%), Consumer Durables index (down 0.38%), Metal index (down 0.57%), underperformed the Sensex.

The market breadth, indicating the overall health of the market, was negative. The breadth was strong at the onset of the trading session. On BSE, 1404 shares advanced as compared with 1514 that declined. A total of 88 shares were unchanged.

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

BSE clocked turnover of Rs 4669 crore, lower than Rs 5007.35 crore on Thursday, 22 April 2010.

Index heavyweight Reliance Industries (RIL) rose 1.1% ahead of its Q4 result, extending Thursday's 2.03% gains. Net profit rose 19% to Rs 4710 crore in Q4 March 2010 over Q4 March 2009. The result was announced after trading hours today.

Realty shares extended recent gains 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. Ackruti City, Sobha Developers, Peninsula Land and DLF rose between 0.29% to 1.78%. 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 rose 1.31% after taking a pause on Thursday. 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.

Cement major ACC fell 1.8%, extending Thursday's 1.3% decline. 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 on Thursday.

NTPC, country's largest thermal power producer by sales fell 0.75%. Provisional net profit rose 5.5% to Rs 8656.53 crore in the year ended March 2010 over the year ended March 2009. Net sales jumped 11.28% to Rs 46504.47 crore. The result was announced during market hours today.

NTPC has approved capital expenditure of Rs 22350 crore for the year ending March 2011, and plans to add 4,150 megawatts of capacity during the year.

India's largest engineering and construction firm by sales Larsen & Toubro (L&T) rose 2.87%, rebounding from last two days' losses. 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 power equipment maker by sales Bharat Heavy Electricals rose 0.64%, with the stock gaining for the second straight day.

India's third largest IT exporter by sales, Wipro, fell 1.42% to Rs 692.95 in volatile trade after company announced a 2:3 bonus issue. It hit a high of Rs 728 and a low of Rs 690.20. Consolidated net profit under International Financial Reporting Standards jumped 21% Rs 1209 crore on 8% rise in total revenue to Rs 6983 crore in Q4 March 2010 over Q4 March 2009. The results were announced just before trading hours today.

Wipro has projected revenue from the IT services business to be in the range of $1.19 billion to $1.215 billion in Q1 June 2010. The company said it won several large deals in Q4 March 2010. Commenting on the fourth quarter results, Wipro Chairman Azim Premji said there was a broad-based, volume led growth during the quarter. There was a good recovery in technology and telecom verticals. The business environment is returning to normal, he added.

Recently, IT giant Tata Consultancy Services beat market estimates and Infosys Technologies met quarterly profit estimates. Both gave a positive outlook on rising demand.

India's largest information technology services provider by sales, TCS fell 0.7%. 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.

India's second largest software exporter by sales, Infosys Technologies, rose 0.72%.

HCL Technologies rose 1.9%, gaining for the straight third day 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 on Wednesday, 21 April 2010.

Bank stocks rose on an expected increase in lending growth in the current year in a rebounding economy. India's biggest commercial bank in terms of branch network State Bank of India rose 1.48%, extending Thursday's 5.58% 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, Punjab National Bank, Bank of Baroda and Bank of India rose by between 0.4% to 0.98%. The Union Cabinet today 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 rose 3.37% ahead of its Q4 March 2010 result which is due on Saturday, 24 April 2010. India's second largest private sector bank by net profit HDFC Bank rose 0.46%, reversing early fall, ahead of Q4 March 2010 results which is due on Saturday, 24 April 2010.

Axis Bank rose 0.63%, 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 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) fell 0.32%, reversing early gains. 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.

FMCG stocks rose on expectation of good Q4 results. Hindustan Unilever ITC, United Spirits, Tata Tea rose by between 0.61% to 1.47%.

But, Nestle India fell 4.67% as net profit rose just over 2% to Rs 201.86 crore on 16.9% rise in sales to Rs 1479.78 crore in Q1 March 2010 over Q1 March 2009, as higher input costs hit margins. The company declared the results after trading hours on Thursday.

Rate sensitive auto stocks were mixed. 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 fell 1.22%, taking a pause after last three days' gains. 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 rose 2.4%. 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 fell 0.51%. 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 fell 1.38% on profit taking after gains in the preceding three days in a row. 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 rose 1.01% extending recent rally. The company said on 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.

Metal stocks fell after LMEX, a gauge of six metals traded on the London Metal Exchange, fell 0.72% on Thursday, 22 April 2010. JSW Steel, Hindustan Zinc, National Aluminum Company, Hindalco Industries fell by between 0.26% to 1.17%.

India's largest private sector steel maker by sales Tata Steel fell 1.23%, extending Thursday's 1.83% decline. 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.

FCC Software clocked the highest volume of 2.02 crore shares on BSE. Visa Steel (1.61 crore shares), Cals Refineries (1.11 crore shares), Development Credit Bank (1.06 crore shares) and India Steel Works (96 lakh shares) were the other volume toppers in that order.

Manappuram General Finance & Leasing clocked the highest turnover of Rs 333.26 crore on BSE. State Bank of India (Rs 194.13 crore), Tata Steel (Rs 129.21 crore), Reliance Industries (Rs 115.63 crore), ICICI Bank (Rs 100.96 crore) were the other turnover toppers in that order.