Market at 1-month high on Fitch upgrade

Today's major news

Singapore Exchange signs agreement with HCL Technologies; the stock closes 3.34% higher

Inflation rises to 10.16% in May

UCO Bank to raise Rs500 crore via follow-on public offer; the stock closes 1.66% up



Global signals

European shares rose on Monday for the fourth consecutive day. The stocks hit the four-week high as investor confidence over the global economic recovery grew, with banks and miners rising on the positive sentiment. As of writing this report, FTSE 100 was trading at 0.69% higher.

All the major Asian indices closed in the positive territory. SGX Nifty closed at 78.50 points higher.

The US stock index futures signal strong opening on the Wall Street, adding to last week's gains and tracking positive global equities.

Indian indices

Bulls extended their domination for the fourth straight session leading the Indian markets to hit the one-month high.
Firm Asian and European markets, and higher US index futures helped the domestic market to continue its northward journey. The global rating agency Fitch Ratings forecast a decline in government debt to gross domestic product (GDP) ratio to 80% by March 2011 from 83% at the end of March 2010 and raised India's local currency rating outlook to stable from negative. It also upgraded India's growth forecast to 8.5% in the year to March 2011 from earlier 7%. This news also supported the rally.

India's wholesale price index (WPI) for the month of May 2010 rose to 10.16% year on year (yoy) as compared to 9.59% yoy rise seen in the month of April 2010. Meanwhile, inflation for March 2010 was revised upwards to 11.04% from a provisional rise of 9.9%. The Indian indices ignored the rising inflation and persisted its upmove.

The bellwether Sensex started the week on a strong note, 54 points up at 17119 on buoyant Asian markets. The index strengthened further in morning session. The Sensex held on its gains in afternoon session despite rise in May inflation. The market sentiments were also boosted by the positive opening in the European markets. In late afternoon session, the market gathered momentum after Fitch Ratings upgraded India’s economy outlook. Buying in information technology, oil & gas stocks along with Anil Dhirubhai Ambani Group (ADAG) stocks led the Sensex to touch the day’s high of 17351. The Nifty also crossed 5200 mark during the day.

At closing bell, the Sensex quoted at 17338, 273 points higher and the Nifty closed tad below 5200, at 5198, 78 points higher.

Market sentiment

The number of advancing shares stood almost twice that of declining shares. Of the 2,966 stocks traded on the BSE, 1,875 stocks advanced, whereas 971 stocks declined. Hundred and twenty stocks closed unchanged

Sectoral & stock screening

Out of the 13 sector indices on the BSE, only BSE health care (HC) closed with marginal loss of 0.28%. The remaining 12 indices ended higher. Among gainers, BSE information technology (IT) surged the most by 3.69%, followed by BSE TECk that rose by 2.76% and BSE Oil & Gas that advanced by 1.87% for the day.

In ‘A’ group stocks, the star stock of the day was Jai Corp that was up by 17.37%, followed by Reliance Natural Resources Ltd (RNRL) that surged 17% and Reliance Capital that rose by 6.60%. On flip side, Dr Reddys Laboratories slid the most by 3.63%, followed by Areva T&D that fell by 3.27% and Tulip Telecom that shed 2.21%.

Viewing volumes

ADAG firm - RNRL saw highest trading with over 3.03 crore shares changing hands on the BSE, India’s second largest developer - Unitech (0.51 crore shares), industrial finance company - IFCI (0.49 crore shares), ADAG power utility firm - Reliance power (0.35 crore shares) and India's second largest listed cellular services provider by sales - Reliance Communications (0.32 crore share).