Sensex off 120 points from the day's high

The key benchmark indices edged higher for the second straight day, tracking gains in Asian stocks. But, the market came off the day's high as European stocks pared initial gains and US index futures reversed gains. The BSE 30-share Sensex was provisionally up 74.85 points or 0.44%, off close to 120 points from the day's high and up close to 30 points from the day's low. Interest rate sensitive realty and auto stocks gained. Consumer durables and healthcare stocks also rose. The market breath was strong.

Index heavyweight Reliance Industries (RIL) declined. Some metal stocks reversed initial gains. Telecom stocks extended recent steep losses.

The market surged in opening trade tracking firm Asian stocks. It was range bound in early trade. The market came off higher level in morning trade. It soon regained strength. The Sensex hit a fresh intraday high in early afternoon trade. The market pared gains in afternoon trade as investors booked profit in some index stocks. The Sensex was further off the day's high in mid-afternoon trade. The market came off lower level after hitting fresh day's low in mid-afternoon trade.

European shares were off early highs as jitters about debt levels lingered. The key benchmark indices in UK, France and Germany were up by 0.02% to 0.63%.

Asian stocks edged higher on Thursday, following strong gains on Wall Street on Wednesday. Spain on Wednesday outlined measures to cut its deficit, easing fears that the Greek debt crisis could spread in Europe. The key benchmark indices in China, Hong Kong, Japan, South Korea and Taiwan rose by between 1.04% to 2.21%. But, Singapore's Straits Times fell 0.45%. Markets in Indonesia were closed for a holiday.

US index futures fell in volatile trade. Trading in US index futures indicated that the Dow could fall 14 points at the opening bell on Thursday, 13 May 2010.

US stocks surged on Wednesday boosted by technology and industrial shares, after Spain unveiled an austerity plan that reassured investors Europe was addressing its fiscal ills. The Dow Jones industrial average surged 148.65 points, or 1.38% to 10,896.91. The Standard & Poor's 500 Index rose 15.88 points, or 1.37% to 1,171.67 and the Nasdaq Composite Index added 49.71 points, or 2.09% to 2,425.02.

Spain on Wednesday said it will slash civil service pay and cut public-sector jobs, just a few days after EU finance ministers approved a 750 billion euro ($1 trillion) bailout package to stem the debt crisis. Markets have remained jittery in the past few days on worries a European debt crisis that began in Greece could spread around the world and potentially curb global growth.

Back home, the fourth quarter corporate results announced so far have been fairly encouraging. The combined net profit of a total of 1586 companies rose 35.5% to Rs 46679 crore on 29.8% rise in sales to Rs 440781 crore in the quarter ended March 2010 over the quarter ended March 2009.

On the macro front, 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.

The business at Indian service companies rebounded to a 21-month-high in April 2010 on new business and high input prices. The HSBC Markit Business Activity Index, based on a survey of 400 firms, rose to 62.1 in April, its highest since July 2008, and compared with 58.1 in March 2010.

The latest government data showed the food price index rose 16.44% in the year to 1 May 2010, higher than previous week's annual rise of 16.04%. The fuel price index rose 12.33%, lower than previous week's annual 12.69% rise. The primary articles index jumped 16.76%, from previous week's annual gain of 13.93%.

On Friday, 14 May 2010, the government will unveil data on inflation based on the wholesale prices for the month of April 2010. The headline inflation was 9.9% in March 2010. The RBI has forecast the headline inflation to ease to 5.5% at end-March 2011 on expectations of a normal monsoon.

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 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 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 Reserve Bank of India governor D Subbarao on Tuesday, 11 May 2010, said India prefers long-term capital inflows to short-term flows and non-debt flows to debt flows. There is no proposal to impose a Tobin type tax to rein in excessive capital inflows, the RBI governor said in a speech delivered at a conference in Zurich on Tuesday. However, it needs reiterating that no policy instrument is clearly off the table and the choice of instruments will be determined by the context, Subbarao added.

As per provisional figures, the BSE 30-share Sensex was up 74.85 points or 0.44% to 17,270.66. The index rose 193.34 points at the day's high of 17,389.15 in early afternoon trade. The Sensex rose 44.54 points at the day's low of 17,240.35 in mid-afternoon trade.

The S&P CNX Nifty was up 22.60 points or 0.44% to 5179.25 as per provisional figures.

The BSE Mid-Cap index rose 1.24% and the BSE Small-Cap index rose 0.97%. Both these indices outperformed the Sensex.

The market breadth, indicating the overall health of the market, was strong. On BSE, 1666 shares advanced as compared to 1201 shares that declined. A total of 104 shares remained unchanged.

Among the 30-share Sensex pack, 19 rose while the one fell.

BSE clocked turnover of Rs 3768 crore, lower than Rs 3803.33 crore on Wednesday, 12 May 2010.

Index heavyweight Reliance Industries (RIL) fell 0.89% to Rs 1072.40, off the day's high of Rs 1093.60. The stock had surged recently after a favourable ruling in the Supreme Court late last week 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.

Some metal stocks reversed early gains. India's largest steel maker by sales Tata Steel fell 1.13%. The stock was the top loser from the Sensex pack. Aluminum maker Hindalco Industries fell 0.35%.

India's largest cellular services provider by sales Bharti Airtel fell 0.7% to Rs 259.60, extending last two days' sharp fall triggered by telecom regulator Telecom Regulatory Authority of India (Trai)'s recommendation that telecom firms pay a one-time fee for holding radio-spectrum beyond 6.2 mega hertz (MHz) based on 3G prices. The stock came off the day's high of Rs 271.90.

Bharti Airtel, on Wednesday said the telecoms regulator's proposals on allocation of second-generation (2G) spectrum are shocking, arbitrary and retrograde and are against all existing global norms for spectrum allocation. The company said it was confident that the Department of Telecommunications (DoT) and that the government will take a rational approach and summarily reject these arbitrary, impractical and perverse recommendations.

India's second largest listed cellular services provider by sales Reliance Communications declined 0.58%.

Auto shares gained on strong vehicle sales in the month of April 2010. India's largest tractor maker by sales Mahindra & Mahindra rose 3.48%.

India's top truck maker by sales Tata Motors rose 3.64%, with the stock gaining for the second straight day. The company's American depository receipt, or ADR rose 3.68% to $19.42 on the New York Stock Exchange on Wednesday, 12 May 2010. The stock was the top gainer from the Sensex pack. Total sales including exports of commercial and passenger vehicles jumped 52% to 57,202 vehicles in April 2010 over April 2009. Domestic sales rose 49% to 54,065 units. Exports rose 148.8% to 3,137 units.

India's largest small car maker by sales Maruti Suzuki India rose 0.38%. 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 3%, with the stock gaining for the second straight day on strong Q4 March 2010 result. The stock hit a high of Rs 2210 which is a record high for the counter. 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.

Realty stocks rose as lower than expected growth in industrial production in March 2010 helped ease rate-hike worries. Ackruti City, Omaxe, HDIL, DLF, Indiabulls Real Estate, Phoenix Mills and Unitech rose by between 0.53% to 4.55%.

Consumer durables stocks also gained on bargain hunting. Rajesh Exports, Titan Industries and Videocon Industries rose by between 0.12% to 3.68%.

India's largest engineering and construction firm by sales Larsen & Toubro rose 0.79%, with the stock gaining for the second straight day after company's water technology business unit won an order worth Rs 850 crore in Doha, Qatar for advanced waste water treatment and urban reuse. The company announced the order win after market hours on Tuesday, 11 May 2010.

Among other capital goods stocks, Punj Lloyd, Bharat Heavy Electricals, SKF India, ABB and Praj Industries rose by between 0.59% to 2.54%.

Pharma stocks rose on bargain hunting. Biocon, Pfizer, Dr Reddy's Laboratories and Sun Pharmaceutical Industries rose by between 0.7% to 2.74%.

Ranbaxy Laboratories rose 0.28%, with the stock gaining for the third straight day on strong Q1 result. The company reported consolidated net profit of Rs 960.58 crore in Q1 March 2010 compared to a net loss of Rs 767.33 crore in Q1 March 2009. The company announced the result during market hours on 11 May 2010.

But, Cipla fell 0.35% with the stock extending recent steep slide triggered by disappointing Q4 March 2010 results. Net profit rose 8.93% to Rs 275.53 crore in Q4 March 2010 over Q4 March 2009. The result was announced after market hours on 7 May 2010.

Kotak Mahindra Bank rose 0.99% on reports the private sector bank is in talks with Citi Holdings for a possible acquisition of CitiFinancial Consumer Finance India.

Precision Wires India jumped 14.77% after net profit galloped 1850% to Rs 22.62 crore on 17.53% rise in net sales to Rs 630.19 crore in the year ended March 2010 over the year ended March 2009.

XL Telecom & Energy jumped 14.72% after the company signed a joint venture agreement with Spanish firm SDEM TEGA S.A. for bidding for and executing solar power projects.