Oil & gas stocks hog limelight

The key benchmark indices rebounded on Thursday after heavy losses in the past two trading sessions as oil major ONGC jumped. Shares of state-run natural gas producers ONGC and Oil India spurted after the government on Wednesday more than doubled the price of natural gas produced from nomination blocks. PSU OMCs also edged higher.

Telecom stocks were mixed after the 3G spectrum auctions ended on Wednesday, 19 May 2010. The market breadth was weak in contrast to a strong breadth in early trade. The BSE 30-share Sensex rose 111.19 points or 0.68%, up close to 100 points from the day's low and off about equal points from the day's high. Banking, FMCG and metal stocks rose. European stocks and US index futures declined in volatile trade.

Intraday volatility was high 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 next Thursday (27 May 2010). The market came off the higher level after a firm opening. The market recovered from lower level later. The market once again came off the higher level in mid-morning trade. The key benchmark indices regained strength in early afternoon trade.

The Sensex hit a fresh intraday high in afternoon trade as European stocks rose at the onset of the trading session. The market came sharply off the higher level later. The market once again came off the lower level 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, declined 3.12% to 31.04, a day after surging 20.72% on Wednesday, 19 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.

Foreign funds are offloading Indian stocks. As per provisional data, foreign institutional investors (FIIs) today, 20 May 2010, sold shares worth a net Rs 657.23 crore. Domestic funds bought stocks worth a net Rs 721.15 crore.

FIIs have sold shares worth a net Rs 8367.76 crore this month, till 20 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 3286.54 crore this month, till 20 May 2010.

Worries over fiscal problems in southern Europe triggered outflow from China and India dedicated funds during the week ended 12 May 2010. As a result, Asia funds, excluding Japan, saw only $27 million inflows, their worst week in well over a year, as per data from global fund tracker EPFR Global.

On the macro front, 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 on Thursday. 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.

European shares fell Thursday afternoon, with sentiment souring through the session and turning particularly negative towards miners and automakers. The key benchmark indices in Germany, UK and France were down by 0.76% to 2.13%.

Asian stocks fell on Thursday as fiscal worries in euro zone continued to mar investors' appetite for risk. Investors remain jittery after Germany's decision late on Tuesday, 18 May 2010, to ban naked short-selling on sovereign debt and some financial stocks. The key benchmark indices in China, Indonesia, Singapore Japan, Hong Kong, South Korea and Taiwan fell by between 0.17% to 1.83%.

Japan's economy grew less than forecast in the first quarter. Gross domestic product rose 4.9% in the three months to March 2010 at an annualized rate, up from 4.2% in October to December 2009 period.

US index futures slumped after moving between positive and negative zone. Trading in US index futures indicated that the Dow could fall 69 points at the opening bell on Thursday, 20 May 2010.

US stocks fell on Wednesday as Germany's unilateral action to ban specific trades on some stocks and bonds sparked a fresh wave of uncertainty and risk aversion among anxious investors. Germany on Tuesday banned investors who don't own or haven't borrowed certain stocks, bonds and derivatives from selling them, in a move that appeared to catch its partners in the European Union off guard. The Dow Jones Industrial Average slid 66.58 points, or 0.63% to 10,444.37. The Standard & Poor's 500 Index fell 5.75 points, or 0.51% to 1,115.05. The Nasdaq Composite Index lost 18.89 points, or 0.82% to 2,298.37.

Meanwhile, the latest data showed that US Consumer Price Index fell for the first time in a year last month and the closely watched core inflation rate eked out its smallest annual gain since 1966, further supporting the Federal Reserve's vow to keep interest rates low for some time.

Back home, the fourth quarter corporate results have been decent. The combined net profit of a total of 2,150 companies rose 23.5% to Rs 55,951 crore on 24.7% rise in sales to Rs 5,65,822 crore in the quarter ended March 2010 over the quarter ended March 2009.

The latest economic data showed 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.

India's exports rose an annual 36% to $16.9 billion in April 2010 as demand picked up for gems and textiles while imports rose an annual 43% to $27.3 billion buoyed by industrial recovery, stronger domestic growth and rising oil prices.

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.

The BSE 30-share Sensex rose 111.19 points or 0.68% to 16,519.68. The Sensex rose 209.31 points at the day's high of 16,617.80 in afternoon trade. The index rose 10.61 points at the day's low of 16,419.10 in early trade.

The S&P CNX Nifty rose 27.95 points or 0.57% to 4,947.60. Nifty hit a high of 4,980.25.

The BSE Mid-Cap index fell 0.05%. The BSE Small-Cap index fell 0.55%. Both the indices underperformed the Sensex.

Most sectoral indices on BSE rose. BSE PSU index (up 1.87%), Oil & Gas index (up 1.79%), Healthcare index (up 1.14%), banking sector index Bankex (up 0.93%), and FMCG index (up 0.84%), outperformed the Sensex. BSE Power index (up 0.23%), Capital Goods index (up 0.19%), Metal index (up 0.08%), IT index (up 0.05%), Consumer Durables index (down 0.17%), Auto index (down 0.53%), and Realty index (down 2.04%), underperformed the Sensex.

The market breadth, indicating the overall health of the market was weak in contrast to a strong breadth in early trade. On BSE, 1,146 shares advanced as compared to 1,683 shares that declined. A total of 100 shares were unchanged.

From the 30 share Sensex pack, 18 stocks rose and the rest fell.

BSE clocked turnover of Rs 3840 crore, lower than Rs 4694.74 on Wednesday, 19 May 2010.

State run natural gas producers surged after the government on Wednesday more than doubled the price of natural gas produced by state firms from nomination blocks. ONGC jumped 8.72% and Oil India gained 9.09%. The base price of gas supplied by state firms will rise to $4.2 per million British Thermal Units, the same as the rate approved for Reliance Industries, bringing about near-uniformity in the cost of the fuel in India.

Shares of three state-run oil marketing companies -- BPCL, HPCL and Indian Oil Corporation rose by 2.37% to 3.22% on expectations that the government may deregulate oil prices after it raised the price of natural gas produced by state firms from nomination blocks.

Index heavyweight Reliance Industries (RIL) rose 0.16% to Rs 999.90. The stock was volatile. It hit a high of Rs 1013.75 and low of Rs 993.40. The company said today in view of the threat from cyclone Laila, the company has exercised caution and suspended all drilling operations in the East coast. All production operations on the FPSO (Floating Production Storage and Offloading) vessel operating in the KG D6 block were also suspended, RIL said.

The RIL stock had surged early this month, boosted by after a favourable ruling in the Supreme Court on gas dispute with Anil Ambani controlled Reliance Natural Resources (RNRL). The Supreme Court ordered the two firms to renegotiate a deal based on government policy on gas utilization.

Earlier, the Bombay High Court, in its order dated 15 June 2009 had directed that RNRL will get assured supply of 28 mmscmd of gas from RIL's Krishna-Godavari basin for 17 years at $2.34 per million British thermal units (mBtu). The gas price was 44.28% lower than the price fixed by the government for gas sale from the RIL block in the KG basin at $4.2 mBtu.

Grasim Industries was down 2.45% to Rs 2513.50, but off the day's low of Rs 2455. Consolidated net profit rose 15% to Rs 654 crore in Q4 March 2010 over Q4 March 2009. The company announced the result during market hours today.

FMCG stocks rose on bargain hunting. Tata Tea, ITC, Hindustan Unilever rose by between 0.18% to 1.56%.

Bank stocks rose on bargain hunting. Private sector lender ICICI Bank rose 1.01%, reversing early fall. The stock had slumped 7.24% on Wednesday amid concerns the bank is paying a high price for its proposed deal to buy small rival bank Bank of Rajasthan.

The board of directors of ICICI Bank and Bank of Rajasthan on Tuesday gave an in-principle nod for the merger of the later with the former. The swap ratio for the merger is set at 25 shares of ICICI Bank for every 118 shares held in Bank of Rajasthan. Bank of Rajasthan shares hit 10% upper circuit today after hitting 20% upper circuit on Wednesday boosted by the favourable swap ratio for the merger.

India's biggest commercial bank in terms of branch network State Bank of India (SBI) rose 2.19%. SBI expects its advances to grow by 22-23% in the current financial year. SBI's net profit declined 31.93% to Rs 1866.60 crore in Q4 March 2010 over Q4 March 2009. The bank announced the result on Friday, 14 May 2010.

But, India's second largest private sector bank by net profit HDFC Bank fell 0.93%, with the stock falling for the fourth straight day.

India's largest mortgage lender by total income Housing Development Finance Corporation rose 1.53%, with the stock rebounding after last four days' losses. The company's board on 3 May 2010 approved a 5-for-1 stock-split.

HDFC has reportedly extended concessional home loan scheme till 30 June 2010. Under the scheme, HDFC would offer a fixed interest rate of 8.25% up to March 2011, 9% for the next one year and a floating rate thereafter. The scheme was scheduled to end on 30 April 2010.

Auto shares extended recent fall. India's top truck maker by sales Tata Motors fell 0.34%, with the stock reversing early gains and extending last four 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 small car maker by sales Maruti Suzuki India fell 1.6%. 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.

India's largest tractor maker by sales Mahindra & Mahindra fell 0.88%, extending nearly 6% losses on Wednesday.

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.

But, Bajaj Auto rose 0.31%. The stock had hit a record high of Rs 2219.90 in intraday trade on Friday, 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 result during market hours on Wednesday, 12 May 2010.

India's largest motorbike maker by sales Hero Honda Motors rose 0.49%, with the stock gaining for the second straight day.

Realty stocks fell on profit taking. DLF, Indiabulls Real Estate, Unitech, HDIL and Parsvnath Developers, Omaxe fell by between 0.11% to 4.79%.

Some metal stocks rose on bargain hunting after a recent sharp fall. Jindal Steel & Power, Sterlite Industries, Jindal Saw, Hindalco Industries, National Aluminum Company rose by between 0.16% to 2.35%.

Telecom stocks were mixed after the 3G spectrum auctions ended on Wednesday, 19 May 2010, raking in Rs 67,719 crore for the government. Bharti Airtel and Idea Cellular rose by between 0. 23% to 0.95 %. But, Reliance Communications fell 0.73%.

Bharti Airtel and Reliance Communications, each won 13 of the 22 telecom zones on offer while other major operators Vodafone Essar, Idea Cellular and Tata won a total of 9, 11 and 9 circles, respectively. The 3G auction will be followed in two days by an auction for wireless broadband spectrum, for which 11 firms are vying for two national licences for private operators, with one slot reserved for state telecoms firms.

IT stocks rose as the rupee dropped to its lowest level in three-and-a-half months against the dollar. A weak rupee boosts revenue of IT firms in rupee terms as the sector derives a lion's share of revenue from exports.

India's third largest software services exporter Wipro rose 0.41%. India's largest software services exporter TCS rose 1.24%, with the stock rebounding from last four days' losses triggered by reports the UK government will review outsourcing contracts, including agreements signed with TCS, in a bid to cut government spending. But, India's second largest software services exporter Infosys fell 0.1%.

India's largest thermal power producer by sales NTPC rose 1.76% after Power Minister Sushil Kumar Shinde on Thursday said power tariff is likely to go up by about 1 rupee per kilo watt hour following a hike in gas price. The stock had fallen recently after the company reported lower Q4 net profit. Net profit declined 4.52% to Rs 2017.65 crore in Q4 March 2010 over Q4 March 2009. The company announced the result during market hours on Monday, 17 May 2010.

India's largest drug maker by sales Ranbaxy Laboratories rose 0.47% on bargain hunting after the stock lost 5.87% on Wednesday. The company said on Wednesday its European unit was recalling select batches of three products to add safety warnings under the regulations there. The company said there was no product quality concerns for the drugs, but did not name the products. Ranbaxy said the drugs were being recalled from Britain, Denmark and Ireland.

India's largest engineering and construction firm by sales Larsen & Toubro rose 0.45%, reversing initial losses. At the time of announcing Q4 March 2010 results on Monday, 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 Monday, 17 May 2010.

Among other capital goods stocks, Bharat Heavy Electricals, SKF India and Crompton Greaves rose by between 0.28% to 1.72%.

State-run hydro power generation firm SJVN settled at Rs 25.05 on BSE, 3.65% discount to the initial public offer price of Rs 26.

SJVN clocked highest volume of 7.18 crore shares on BSE. Cals Refineries (3.79 crore shares), Birla Power Solutions (2.73 crore shares), Unitech (82.14 lakh shares) and Supertex Industries (58.17 lakh shares) were the other volume toppers in that order.

SJVN clocked highest turnover of Rs 180.03 crore on BSE. Tata Steel (Rs 155.35 crore), Piramal HealthCare (Rs 146.13 crore),State Bank of India (Rs 103.75 crore) and Tata Motors (Rs 100.42 crore) were the other turnover toppers in that order.