All the sectoral indices on BSE rise

The key benchmark indices rebounded from 3-1/2 month lows hit on Tuesday, 25 May 2010, tracking recovery in world stocks triggered by bargain hunting after a recent sharp slide. Realty, auto, metal and IT stocks led gains on the domestic bourses. Index heavyweight Reliance Industries (RIL) also edged higher. The market breadth was strong. All the sectoral indices on BSE were in green. The BSE 30-share Sensex jumped 365.36 points or 2.28%, off close to 20 points from the day's high and up close to 315 points from the day's low.

Stocks were volatile as traders rolled over positions in the derivatives segment from May 2010 series to June 2010 series ahead of the expiry of the near-month May 2010 contracts on Thursday, 27 May 2010. The market extended gains after a firm opening triggered by higher Asian stocks. The market came off the higher level in morning trade. The market soon regained strength with the Sensex hitting a fresh intraday high in mid-morning trade.

The market once again pared gains in early afternoon trade. The Sensex again recovered from lower level later. The barometer index hit a fresh intraday high in mid-afternoon trade. The market extended gains in late trade.

NSE's volatility index India VIX, a gauge of traders' perception of near-term risks in the market based on options prices, dropped 6.87% to 32.15. The index had jumped 10.29% on Tuesday, 25 May 2010. India VIX is calculated based on the S&P CNX Nifty options prices. India VIX is a measure of the market's expectation of volatility over the next 30 calendar days.

Meanwhile, stock brokers have advised clients that they should not sell shares tomorrow, 27 May 2010, in the cash segment bought today, 26 May 2010, due to clubbing of settlements due to a bank holiday tomorrow.

Sustained selling by foreign funds has pulled the market sharply lower this month. The Sensex has lost 8.8% from a recent peak of 17,970.02 on 7 April 2010. The barometer index has lost 6.1% in calendar 2010 after jumping 81% in 2009.

As per the provisional data from the stock exchanges, foreign institutional investors (FIIs) today, 26 May 2010, offloaded stocks worth a net Rs 166.66 crore. Domestic funds bought shares worth a net Rs 64.86 crore. FIIs have sold shares worth a net Rs 12534.25 crore so far this month, till 26 May 2010, according to data from the stock exchanges. They had bought stocks worth a net Rs 2667.35 crore last month. Domestic funds have bought stocks worth a net Rs 5681.87 crore so far this month, till 26 May 2010.

China, India, Brazil and Russia are powering ahead, the Organisation for Economic Cooperation and Development (OECD) said on Wednesday, 26 May 2010, revising upwards its growth outlook for all four largest emerging economies. The OECD revised India's GDP growth forecast for 2010 to 8.2% from its earlier estimate of 7.3%. It also raised the growth forecast for 2011 to 8.5% from its earlier estimate of 7.6%. The OECD also said that underlying inflationary pressures are likely to persist given the strong outlook for demand.

European markets bounced back on Wednesday on bargain hunting after hitting nine-month lows a day earlier. Key indices in UK, France and Germany rose by 1.97% to 2.64%.

Asian stock markets staged a rebound on Wednesday after a sharp cut on Tuesday caused by growing questions about the stability of the European banking system. The key benchmark indices in Hong Kong, Japan, China, Indonesia, South Korea, Singapore and Taiwan rose by between 0.12% to 7.27%.

US index futures edged higher in volatile trade. Trading in US index futures indicated that the Dow could gain 57 points at the opening bell on Wednesday, 26 May 2010.

US stocks staged a late rebound on Tuesday to end mostly flat as the focus shifted from European debt woes to buying after shares hit six-month lows. The Dow Jones Industrial Average dropped 22.82 points, or 0.23% to 10,043.75. The Nasdaq Composite Index shed 2.60 points, or 0.12% to 2,210.95. The Standard & Poor's 500 Index gained 0.38 points or 0.04% to end at 1,074.03.

US consumer confidence rose for the third straight month in May 2010 to the highest in more than two years. But, that was countered by a report showing single-family home prices dropping in the first quarter on renewed price pressure as federal aid faded away.

The debt crisis in the Eurozone is having an impact on the willingness of US and Asian investors to lend to Europe. On Tuesday, 25 May 2010, the three-month US dollar London Interbank Offered Rate, or Libor increased to 0.536%, the highest level since 7 July 2009, from 0.51% on Monday, 24 May 2010. Libor increased for the 11th consecutive day on Tuesday.

Closer home, the Indian Depository Receipts (IDR) issue of British bank Standard Chartered PLC received a muted initial response. The issue received bids for 1.31 crore shares by 16:00 IST on the second day of the issue today, 26 May 2010, compared to 20.4 crore shares on offer. The issue was subscribed 6%. Standard Chartered has set the price band for the IDR at Rs 100-115 each. Retail investors will be allotted shares at 5% discount to the issue price. Ten IDRs will represent one underlying equity share of Standard Chartered PLC.

The British bank on Monday, 24 May 2010, announced issue of 3.6 crore shares to anchor investors at Rs 104 each. The anchor investors include all the top domestic mutual funds.

Prime Minister Manmohan Singh on Monday said inflation is showing signs of moderating and the government expects to achieve a medium term target of 10% GDP growth annually. The Prime Minister said he expects inflation to moderate to 5-6% by December 2010. Singh expects 8.5% GDP growth in the year ending March 2011 (FY 2011).

The RBI 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 on 20 April 2010 said it will continue to monitor macroeconomic conditions, particularly the price situation closely and take further action as warranted.

In its World Economic Outlook in April 2010, the International Monetary Fund (IMF) pegged India's GDP growth forecast at 8.75% in calendar 2010 and 8.5% in calendar 2011. IMF's optimism was based on expectations of strengthening of domestic demand as the labour market improves. Expectations of increase in investment on the back of strong corporate profitability, rising business confidence and favourable financing conditions, were other factors cited by IMF for its prediction of strong growth in India's economy.

India's monsoon rains are on track to hit the country's southern coast on 30 May 2010, and the Laila cyclone in the Bay of Bengal would not derail the vital June-September rainfall, a weather office spokesman told a news agency last week. The India Meteorological Department (IMD) in late April 2010 said rainfall is likely to be 98% of the long-term average. 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 also holds key.

The latest data showed the food price inflation picked up for the second consecutive week in early May 2010. The food price index rose 16.49% in the year to 8 May 2010, a tad higher than the prior week's annual reading of 16.44% as fruit and vegetables prices climbed on the back of a heat wave. The fuel price index was steady at 12.33%, while the primary articles index was up 16.19% versus 16.76%.

While the headline inflation declined to 9.59% in April 2010 from 9.9% rise in March 2010, the data for February 2010 was revised upwards to 10.06% from provisional figure of 9.89%, the latest government data showed. The RBI has forecast the headline inflation to ease to 5.5% at end-March 2011 on expectations of a normal monsoon.

Industrial output rose lower than expected 13.5% in March 2010. The growth was also slower than February's 15.1% expansion. Manufacturing sector output rose 14.3% in March 2010. Industrial output rose 10.4% in the 2009/10 fiscal year, faster than the 2.6% growth clocked in the previous fiscal year.

The fourth quarter corporate results have been decent. The combined net profit of a total of 2,467 companies rose 14.3% to Rs 64,840 crore on 24.1% rise in sales to Rs 6,56,922 crore in the quarter ended March 2010 over the quarter ended March 2009.

The BSE 30-share Sensex rose 365.36 points or 2.28% to 16,387.84. The Sensex rose 387.87 points at the day's high of 16,410.35 in late trade. The index rose 47.30 points at the day's low of 16069.78 in early trade.

The S&P CNX Nifty gained 110.65 points or 2.3% to 4,917.40.

The BSE Mid-Cap index rose 1.48%. The BSE Small-Cap index rose 1.68%. Both these indices underperformed the Sensex.

All the sectoral indices on BSE rose. BSE IT index (up 3.48%), Realty index (up 3.01%), and Metal index (up 2.98%), outperformed the Sensex. BSE Auto index (up 2.02%), FMCG index up (2%), Capital Goods index (up 1.84%), banking sector index Bankex (up 1.83%), Power index (up 1.63%), Oil & Gas index (up 1.5%), Healthcare index (up 1.27%), PSU index (up 0.84%) and Consumer Durables index (up 0.41%), underperformed the Sensex.

The market breadth, indicating the overall health of the market was strong. On BSE, 1902 shares advanced as compared to 907 shares that fell. A total of 79 shares were unchanged.

From the 30 Sensex stocks, 24 rose and rest fell.

BSE clocked turnover of Rs 3216 crore, lower than Rs 3606.15 crore on Tuesday, 25 May 2010.

Index heavyweight Reliance Industries (RIL) rose 2.08% on bargain hunting after Tuesday's 3.39% slide. The two Ambani brothers - Mukesh and Anil took a step towards reconciliation in their long-running feud on Sunday 23 May 2010, ending non-compete agreements. Both the groups said they aim to reach a conclusion soon for a gas supply agreement between Mukesh Ambani's RIL and younger brother Anil's Reliance Natural Resources (RNRL).

The scrapping of the non-compete agreement between the two groups means RIL can enter financial services, telecom and infrastructure sectors whereas the ADAG can enter petroleum and petrochemical businesses. Reliance Industries and the ADAG said they agreed to cancel all existing non-compete pacts the groups had signed in 2006 and entered into a new non-compete pact only for gas-based power generation.

The settlement came after the Supreme Court ruled in Mukesh Ambani's favour in a bitter public dispute over gas pricing. The court on 7 May 2010 ordered the brothers to renegotiate within six weeks a private natural gas supply contract between Reliance Industries and Reliance Natural Resources. The new contract must abide by a government price of $4.2 per million metric British thermal unit (mmBtu), compared with $2.34 per mmBtu the brothers agreed on in 2005 for a 17-year period.

Cairn India rose 3.99% as crude oil prices reclaimed $70 per barrel mark as a drop in US gasoline supplies and rebounding Asian stock markets bolstered confidence that demand for fuel is rising. Rise in crude oil prices would result in higher realizations from crude sales for oil exploration firms. Crude prices had slumped recently amid tensions on the Korean peninsula and fresh concerns over sovereign debt levels in Europe.

Auto shares rose on bargain hunting after recent steep fall. India's top truck maker by sales Tata Motors rose 5.28%, with the stock rebounding after last eight days' losses. The company's global vehicles sales rose 53% to 77,732 units in April 2010 over April 2009. Global sales include that of Jaguar and Land Rover brands, which rose 61% to 17,909 vehicles. The figures were announced on 14 May 2010.

India's largest tractor maker by sales Mahindra & Mahindra rose 0.64%, with the stock rebounding after last two days' losses. The company said today that it has entered into a high growth electric car segment by acquiring a majority 55.2% equity stake in Reva Electric Car Company.

But, India's largest small car maker by sales Maruti Suzuki India fell 0.23%, with the stock falling for the third straight day. Maruti's total sales rose almost 30% to 93,058 units in April 2010 over April 2009. Domestic sales rose 23.4% to 80,034 units. The data was unveiled on 1 May 2010.

Car sales in India rose an annual 39.5% to 143,976 cars in April 2010 over April 2009, data from the Society of Indian Automobile Manufacturers (SIAM) showed. Sales of trucks and buses, a barometer of economic activity, rose 64.5 % to 49,086 units in April 2010 over April 2009, SIAM said.

Bajaj Auto rose 2.89%, with the stock rebounding after last three days' losses. The stock had hit a record high of Rs 2219.90 in intraday trade on 14 May 2010, boosted by strong Q4 results. Net profit surged 306% to Rs 528.65 crore in Q4 March 2010 over Q4 March 2009. The company announced the result during market hours on 12 May 2010.

India's largest motorbike maker by sales Hero Honda Motors rose 1.59%.

Grasim Industries slumped 20.52% to Rs 1,845.30 as trading in the stock began on ex-entitlement basis on account of demerger of the cement division that contributed 76% of sales in the year ended March 2010.

Realty stocks rose on bargain hunting after a recent steep slide. Sobha Developers, Peninsula Land, DLF, Indiabulls Real Estate, Unitech, HDIL, Omaxe, Orbit Corporation, Ackruti City rose by between 0.01% to 5.48%.

Real estate firm Lodha Developers paid more than twice the asking price to win a plot of land in the central Mumbai suburb of Wadala for Rs 4050 crore, in the single largest land transaction in the city.

IT stocks rose on a recent steep slide in rupee. A weak rupee boosts revenue of IT firms in rupee terms as the sector derives a lion's share of revenue from exports. The rupee pulled back from near eight-month lows on Wednesday as recovery in local shares after a sharp slide the previous day lifted sentiment. The partially convertible rupee was at 47.41/42 per dollar, stronger than 47.71/72 at close on Tuesday when it had dropped to 47.75, its weakest since 1 October 2009.

India's third largest software services exporter Wipro rose 2.49% after falling 2.18% on Tuesday. Its ADR rose 0.15% on Tuesday, 25 May 2010. India's second largest software services exporter Infosys rose 3.37% after falling 2.44% on Tuesday. Its ADR fell 0.13% on Tuesday, 25 May 2010. India's largest software services exporter TCS rose 5.36%, with the stock rebounding after last three days losses.

Metal and mining stocks advanced as metal futures rose. National Aluminum Company, Sterlite Industries, Hindalco Industries, Hindustan Zinc, JSW Steel, Steel Authority of India, Sesa Goa rose by between 0.77% to 7.3%.

India's largest steel maker by sales Tata Steel rose 1.21% ahead of its Q4 result today, 26 May 2010.

India's largest engineering and construction firm by sales Larsen & Toubro rose 2.81%, recovering from Tuesday's 4.28% fall. At the time of announcing Q4 March 2010 results on 17 May 2010, L&T's management gave a guidance of 20% growth in revenue and 25% growth in new orders in the current financial year.

L&T's order inflow jumped 90% to Rs 23843 crore in Q4 March 2010 over Q4 March 2009. The company's order book as at 31 March 2010 stood at Rs 1,00,239 crore, which is 2.7 times its sales of Rs 36,996 crore for the year ended March 2010. Net profit rose 44% to Rs 1438.10 crore in Q4 March 2010 over Q4 March 2009. The company announced the result during market hours on 17 May 2010.

India's largest equipment maker by sales Bharat Heavy Electricals fell 0.36%. Net profit rose 41.71% to Rs 1909.58 crore in Q4 March 2010 over Q4 March 2009. The company announced the result during market hours today.

India's largest FMCG maker by sales Hindustan Unilever rose 0.54%. Net profit jumped 47% to Rs 581.20 crore in Q4 March 2010 over Q4 March 2009, boosted by exceptional gains. The company announced the result after market hours on Tuesday, 25 May 2010.

Birla Power Solutions clocked the highest volume of 4.05 crore shares on BSE. Cals Refineries (2.36 crore shares), Sesa Goa (65.60 lakh shares), Reliance Natural Resources (53.34 lakh shares), Unitech (52.33 lakh shares) were the other volume toppers in that order.

Sesa Goa clocked the highest turnover of Rs 213.21 crore on BSE. Tata Steel (Rs 155.20 crore), Piramal HealthCare (Rs 138.82 crore), Tata Motors (Rs 87.02 crore) and State Bank of India (Rs 75.56 crore) were the other turnover toppers in that order.