Unabated rally propels Sensex near 18k

The market reported ninth straight weekly gain, boosted by earnings optimism and continued fund inflows. Recovery in global stock markets also supported domestic bourses.

The market is entering an important period of quarterly earnings, with IT bellwether Infosys kick starting 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).

Foreign funds have shown steady interest in Indian equities since late-February's budget which emphasised on fiscal consolidation and higher consumption power. Foreign institutional investors (FIIs) inflow in April 2010 totaled Rs 3462.70 crore while the inflow in the calendar year 2010 totaled Rs 24,107 crore (till 7 April 2010), as per data from the Securities & Exchange Board of India.

On the macro front, India's food price index rose 17.70% in the year to 27 March 2010, government data showed on Thursday. The rise in the food price index was higher than an annual rise of 16.35% in the previous week. The fuel price index rose 12.71%, a tad below the previous week's reading of 12.75%. The primary articles index rose 14.5%.

The BSE Sensex rose 240.52 points or 1.36% to 17,933.14 in the week ended Friday, 9 April 2010. The S&P CNX Nifty gained 71.25 points, or 1.34% to 5361.75 in the week.

The BSE Mid-Cap index rose 3.19% and the BSE Small-Cap index gained 4.14% in the week. Both these indices outperformed Sensex.

The key benchmark indices gained on Monday, 5 April 2010 after some Asian markets zoomed to 19-month highs that day buoyed by an upbeat US job data. The BSE 30-share Sensex rose 243.06 points or 1.37% to 17,935.68. The S&P CNX Nifty rose 77.90 points or 1.47% to 5,368.40.

The key benchmark indices were little changed on Tuesday, 6 April 2010 after moving between positive and negative zone in intraday trade. The Sensex pared gains after coming within a striking distance of the psychological 18,000 mark. The BSE 30-share Sensex rose 5.89 points or 0.03% to 17,941.37. The S&P CNX Nifty fell 2.40 points or 0.04% at 5,366.

The key benchmark indices registered small gains in what was a highly volatile trading session on Wednesday, 7 April 2010. The market attained its highest closing level in more than 25 months. The barometer index BSE Sensex scaled the psychological 18,000 level in intraday trade but it settled below that level. The Sensex rose 28.65 points or 0.16% to 17,970.02. The S&P CNX Nifty gained 8.65 points or 0.16% to 5,374.65.

The key benchmark indices slumped on Thursday, 8 April 2010 as weak global stocks and worries about the economic health of Greece triggered profit taking after recent sharp surge in share prices. A spike in food price inflation also rekindled fears of a hike in key policy rates when the Reserve Bank of India reviews its monetary policy on 20 April 2010. The BSE 30-share Sensex fell 255.62 points or 1.42% to 17,714.40. The S&P CNX Nifty declined 70.20 points or 1.31% to 5,304.45.

The key benchmark indices recouped most of the previous day's losses on Friday, 9 April 2010 as world stocks rose on strong US consumption data. The BSE 30-share Sensex rose 218.74 points or 1.23% to 17,933.14. The S&P CNX Nifty gained 57.30 points or 1.08% to 5361.75.

Reliance Industries (RIL) rose 2.77% on expectations of strong Q4 March 2010 results. RIL's 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 5.98%. 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) fell marginally by 0.52%. 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 (up 6.16%), Praj Industries (up 3.85%), Punj Lloyd (up 2.92%), ABB (up 2.13%), BEML (up 1.66%) and Siemens (up 1.70%), rose.

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, 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 largest commercial vehicle maker by sales Tata Motors rose 4.25% after the company's UK-based unit, Land Rover, reported its best ever monthly sales in UK with sales rising 67% to 11,300 units in March 2010 over March 2009.

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 fell marginally by 0.69%. 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 3.37%. 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 5.60%.

India's largest tractor maker by sales Mahindra & Mahindra fell 1.04%. 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, hiked utility vehicles prices recently.

India's largest IT exporter by sales Infosys rose 0.28% 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.

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 after a sharp surge in credit growth. India's largest bank by net profit and branch network State Bank of India rose 0.14%. 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 2.56%. India's second largest private sector bank by net profit HDFC Bank rose 0.56%.

India's largest mortgage finance firm by total income Housing Development Finance Corporation rose 2.24%.

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.