Sensex attains 1-1/2 month high as top Indian firms pay higher advance tax

Key benchmark indices extended gains for the fifth day in a row buoyed by good initial batch of first quarter advance tax figures from frontline companies. Higher advance tax payment normally indicates higher profits for the period under review. Global cues were supportive with European markets trading firm, reversing initial losses. Asian stocks rose, extending recent gains. The BSE 30-share Sensex was up 74.66 points or 0.43%, up 163.37 points from the day's low and off 29.67 points from the day's high. The Sensex settled at its highest level in 1-1/2 months. The 50-unit S&P CNX Nifty settled at six-week high.



The market has staged a strong rebound since late May 2010. The Sensex has jumped 1,390.35 points or 8.67% from a low of 16,022.48 on 25 May 2010. Despite the strong rebound, stocks are off recent highs. The Sensex has lost 557.19 points or 3.1% from a peak of 17,970.02 on 7 April 2010. The barometer index has lost 0.29% in calendar 2010 so far after jumping 81% in 2009.

Coming back to today's trade, realty stocks surged in late trade. Metal and mining stocks rose as base prices edged higher on the London Metal Exchange on Monday, 14 June 2010. Capital goods pivotals and MNC stocks gained on fresh buying. Sugar stocks gained after the government reportedly hiked the levy sugar price. PSU stocks rallied on reports the government has approved an initial share sale of 10% in Coal India.

Telecom and banking stocks saw mixed trend. Auto and IT stocks declined on profit booking. Shares of PSU OMCs tanked on reports a meeting of the Empowered Group of Ministers (EGoM) on fuel price hike has been deferred indefinitely.

The total turnover on BSE amounted to Rs 5031 crore, higher than Rs 3713 crore on Monday, 14 June 2010.

Intraday volatility was high. The market came off the lower level in early trade on higher Asian stocks. Both the key indices -- the Sensex and the 50-unit S&P CNX Nifty struck their highest level in more than a month at the onset of the trading session. The market lost ground later. The market came off the lower level after hitting a fresh intraday low in morning trade. Fresh selling pulled the market to a fresh intraday low in early afternoon trade.

Renewed buying helped the key benchmark indices regain positive zone in afternoon trade. The key benchmark struck six-week highs in mid-afternoon trade as European stocks reversed initial losses. The market pared gains at the fag end of the trading session after hitting a fresh six-week high in late trade.

NSE's volatility index, India VIX, extended recent steep slide. The index, which is a gauge of traders' perception of near-term risks in the market based on options prices, declined 4.23% to 21.98. 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 today, 15 June 2010, bought equities worth a net Rs 590.09 crore, as per the provisional data released by the stock exchanges. Domestic funds offloaded shares worth a net Rs 351.46 crore.

Foreign funds have bought equities worth a net Rs 2003.53 crore in four trading sessions from 10 June 2010 to 15 June 2010, as per data from the stock exchanges.

Top Indian firms have reportedly paid higher advance tax. As per reports, Reliance Industries (RIL) has paid advance tax of Rs 653 crore in Q1 June 2010, much higher than Rs 314 crore in Q1 June 2009. Housing finance major HDFC has paid advance tax of Rs 215 crore in Q1 June 2010 verses Rs 175 crore in Q1 June 2009. Private sector lender HDFC Bank has reportedly paid advance tax of Rs 315 crore in Q1 June 2010 versus Rs 250 crore in Q1 June 2009.

Tata Motors reportedly paid Rs 65 crore in advance tax in Q1 June 2010 versus Rs 30 crore in Q1 June 2009. Tata Steel paid Rs 300 crore in advance tax in Q1 June 2010 versus Rs 230 crore in Q1 June 2009. The June 2010 quarter tax paid by bike major Bajaj Auto was more than double the year ago, while refiner Hindustan Petroleum Corporation (HPCL)'s payment quadrupled. But, Hindustan Unilever (HUL) first quarter advance tax payment was unchanged at Rs 75 crore. The first installment of corporate advance tax falls due on 15 June every year.

Meanwhile, the Union Cabinet today approved 10% stake sale in Coal India, in what could be India's largest share sale ever. Separately, the government will sell 20% in Hindustan Copper -- 10% through fresh equity and another 10% by divesting the government's stake.

The government has targeted Rs 40000 crore in the current fiscal year by selling minority stake in public sector firms as part of efforts to bridge fiscal deficit.

European shares gained further ground after a shaky start, with gains in the media sector offsetting losses for autos. The key indices in UK, France and Germany were up by 0.45% to 0.66%.

Asian shares advanced in volatile trade on Tuesday, extending four-day gains. The key benchmark indices in Indonesia, Japan, Hong Kong, and Taiwan rose by 0.05% to 0.90%. However, South Korea's Seoul Composite was down 0.03%. Singapore's Straits Times was unchanged. China's markets remain closed till Wednesday, 16 June 2010 for the Dragon Boat Festival.

The Bank of Japan (BoJ) today kept the benchmark interest rate unchanged at 0.1% as expected at a policy review. The BoJ also said it will lend Y3 trillion of 1-year funds at the 0.1% interest rate to private banks by encouraging them to boost lending. BoJ said the banks can rollover these loans a maximum of three times, with the banks required to lend out those funds to companies that have high growth potential.

US markets declined on Monday, 14 June 2010 paring early gains after Moody's Investors Service reduced Greece's rating sparking concern that Europe's debt crisis will hinder a global economic recovery and dent demand for resources. The Dow Jones Industrial Average ended 20.18 points lower, or 0.2%, at 10190.89. The Nasdaq Composite index rose 0.36 points or 0.02% to 2,243.96. The S&P 500 index fell 1.97 points or 0.18% to 1,089.63.

Moody's rating agency slashed its sovereign rating for Greece to 'junk' status on Monday, dropping it four notches from A3 to Ba1 on concerns about how Athens can repay its debts.

Trading in US index futures indicated the Dow could rise 60 points at the opening bell Tuesday, 15 June 2010.

Closer home, global rating agency Fitch on Monday, raised India's local currency rating outlook to stable from negative as the rating agency forecast a decline in government debt to GDP ratio to 80% by March 2011 from 83% at the end of March 2010. It also upgraded India's growth forecast to 8.5% in the year to March 2011 from earlier forecast of 7% growth.

The Reserve Bank of India (RBI) is likely to raise interest rates further after government data released on 14 June 2010 showed a surge in headline inflation. Inflation based on the wholesale price index (WPI) rose an annual 10.16% in May 2010, faster than 9.59% rise in April 2010, government data showed on Monday. Meanwhile, inflation for March 2010 was revised upwards to 11.04% from a provisional rise of 9.9%.

Industrial output rose much faster than expected at 17.6% in April 2010 from a year earlier on strong consumer demand and government spending. March's annual growth rate was revised upwards to 13.9% from 13.5%. Manufacturing output rose 19.4% in April 2010. The industrial output rose 10.4% in the 2009/10 fiscal year (April-March), faster than the 2.6% clocked in the previous fiscal year.

Investors will also keep a close eye on the progress of the monsoon rains. As per the India Meteorological Department (IMD), Southwest monsoon was active over Orissa, Vidarbha, Coastal & South Interior Karnataka and Kerala during past 24 hours. The Southwest monsoon has further advanced into some more parts of Konkan & Goa, Madhya Maharashtra, and Marathwada, some parts of Vidarbha, most parts of Telengana, some parts of Chhattisgarh, remaining part of Coastal Andhra Pradesh, some more parts of Orissa and some more parts of Gengetic west Bengal.

Conditions are favourable for further advance of southwest monsoon into remaining parts of Central Arabian Sea, some parts of North Arabian Sea and south Gujarat, remaining parts of Maharashtra, some parts of Madhya Pradesh, more parts of Chhattisgarh, remaining parts of Orissa and West Bengal and some parts of Jharkhand and Bihar during next 2-3 days.

The June-September monsoon is crucial for the country as it irrigates 60% of farms in India. Monsoon rains had hit Kerala on 31 May 2010, a day ahead of schedule. The south-west monsoon usually covers the entire country by mid-July. The weather office 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.

Last month, Australia's weather bureau said the El Nino weather pattern was over. El Nino is caused by an abnormal warming of the eastern Pacific Ocean and can play havoc with weather patterns across the Asia-Pacific region.

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 BSE 30-share Sensex was up 74.66 points or 0.43% to 17,412.83, its highest closing since 30 April 2010. The index jumped 104.33 points at the day's high of 17,442.50 in late trade. The Sensex fell 88.71 points at the day's low of 17,249.46 in early afternoon trade.

The S&P CNX Nifty was up 24.65 points or 0.47% to 5,222.35 its highest closing since 3 May 2010. Nifty struck a day's high of 5,231.45 in late trade.

The market breadth, indicating the overall health of the market, was strong. On BSE, 1669 shares advanced as compared with 1234 that declined. A total of 93 shares remained unchanged.

The BSE Mid-Cap index gained 0.38%, underperforming the Sensex. The BSE Small-Cap index rose 0.85%, outperforming the BSE Sensex.

Nine out of 13 sectoral indices on BSE logged gains. The BSE Realty index (up 2.60%), the BSE PSU index (up 1.61%), and the BSE FMCG index (up 1.55%), were the top gainers among the sectoral indices on the BSE

The BSE Oil & Gas index (down 0.55%), the BSE IT index (down 0.54%), and the BSE Auto index (down 0.23%), were the top losers among the sectoral indices on the BSE

Among the 30-member Sensex pack, 21 gained while the rest declined.

Realty stocks surged in late trade. India's largest real estate developer by sales DLF jumped 3.65% to Rs 274 and was the top gainer from the Sensex pack.

Unitech (up 3.13%), Omaxe (up 1.74%), Indiabulls Real Estate (up 1.49%), and Orbit Corporation (up 4.10%), Godrej Properties (up 6.19%), and HDIL (up 5.48%), surged.

Metal and mining stocks rose as LMEX, a gauge of six metals traded on the London Metal Exchange, gained 2.83% on Monday, 14 June 2010. Tata Steel (up 1.33%), Steel Authority of India (up 0.20%), Hindalco Industries (up 0.94%), Hindustan Zinc (up 0.34%), JSW Steel (up 1.66%), edged higher.

India's largest non-ferrous metal producer by sales Sterlite Industries (India) gained 3.35%, extending Monday's near 3% rally, after the company fixed 22 June 2010 as the record date for a 2-for-1 stock split and a liberal 1:1 bonus issue. The company announced the record date after market hours on 11 June 2010.

India's second largest listed cellular services provider by sales Reliance Communications (RCom) jumped 3.46% after the company said it is planning to restructure ownership of its subsidiary Reliance Infratel (RInfratel) through a demerger or other options.

The boards of directors of RCom and RInfratel on Monday approved in-principle a proposal to restructure ownership of RInfratel to facilitate creation of the world's largest independent telecom infrastructure company, not owned or controlled by any telecom operator. The announcement was made after market hours on 14 June 2010.

However, India's largest listed cellular services provider by sales Bharti Airtel fell 0.11%. The company reportedly added 3 million mobile subscribers in May 2010, taking its total subscriber base to 133.6 million.

Index heavyweight Reliance Industries (RIL) rose 0.08% to Rs 1064.25 on reports the company is likely to sign gas supply deal next week with Anil Ambani controlled Reliance Natural Resources (RNRIL).

Shares from Anil and Mukesh Ambani stable continued to hog limelight for the second running day after the two Ambani brothers recently announced scrapping of the non-compete agreements made during a family settlement of 2005. Reliance Capital (up 1.61%), Reliance MediaWorks (up 7.34%), Reliance Infrastructure (up 1.76%), Reliance Power (up 4.48%) and RNRL (up 8.87%) extended gains for the second day in a row.

Shares of the Mukesh Ambani-led Reliance Industrial Industries surged 6.53%.

Capital goods pivotals gained on fresh buying. India's largest engineering & construction firm by sales Larsen & Toubro advanced 0.92% to Rs 1720.30 after striking a 52-week high of Rs 1728.

India's largest power equipment maker by sales Bharat Heavy Electricals rose 0.31%.

Banking stocks saw mixed trend. India's largest bank in terms of branch network State Bank of India rose 0.87%, extending three-day 3.15% gains. SBI is likely to launch a Rs 20000-crore rights issue in the second half of 2010/11, Chairman O.P. Bhatt said on 9 June 2010.

Among other PSU stocks, Punjab National Bank fell 0.41% and Bank of Baroda slipped 0.38%. However, Bank of India gained 1.56%.

India's largest private sector bank by sales ICICI Bank rose 0.27%. But, India's second largest private sector bank by sales HDFC Bank slipped 0.81%.

India's largest mortgage lender Housing Development Finance Corporation rose 0.48% on reports the company has paid an advance tax of Rs 215 crore for the June 2010 quarter, up from Rs 175 crore a year ago.

India's largest tobacco firm by sales ITC gained 2.20% ahead of a board meeting on 18 June 2010 to consider issue of bonus shares.

Auto stocks extended Monday's decline as profit booking continued after recent sharp upmove triggered by robust vehicle sales data in May 2010. India's largest small car maker by sales Maruti Suzuki India fell 1.26%

India's largest tractor maker by sales Mahindra & Mahindra (M&M) dropped 0.93% to Rs 607.05, after striking an all-time high of Rs 617.95. The stock had gained 5.84% in the preceding three trading sessions. India's top truck maker by sales Tata Motors was unchanged at Rs 760. As per reports, the company's global vehicle sales rose 50% to 79,819 units in May 2010 over May 2009. These included 19,053 vehicles sold by Jaguar Land Rover in the month, 72% higher from a year ago.

IT stocks declined on profit booking after Monday's strong gains. India's second largest software services exporter by sales Infosys declined 0.33%. India's largest software services exporter by sales TCS lost 2.24% on turning ex-dividend for a total dividend of Rs 14 per share.

India's third largest software services exporter by sales Wipro settled at Rs 409. The stock went ex-bonus for a 2:3 bonus.

ABM Knowledgeware jumped 20% after the company secured an order worth Rs 60 crore. The company announced the new order win after market hours on Monday, 14 June 2010.

State-run oil marketing companies tanked on reports a meeting of the Empowered Group of Ministers (EGoM) on fuel price hike has been deferred indefinitely, due to strong opposition by government's allies like DMK, Trinamool Congress and NCP. BPCL (down 5.50%), HPCL (down 6.58%) and Indian Oil Corporation (down 4.86%), edged lower.

PSU stocks rallied on reports the government has approved an initial share sale of 10% in Coal India. State Trading Corporation (up 4.25%), Engineers India (up 1.59%), RCF (up 3.02%), HMT (up 2.54%), Hindustan Copper (up 8.87%), and Dredging Corporation of India (up 4.08%), surged.

The government has also reportedly cleared a proposal for 20% stake sale in Hindustan Copper -- 10% through fresh equity and another 10% by divesting the government's stake. The government holds 99.59% stake in Hindustan Copper. Recently, the Ministry of Petroleum & Natural Gas approved disinvestment of a 10% stake in another state-run firm Engineers India.

MMTC galloped 20.24% after it convened a board meet on 29 June 2010 to consider stock split and bonus issue.

BOC India jumped 20% after the company's overseas parent said it plans to delist equity shares of BOC India from the stock exchanges in India. The company made this announcement during trading hours today, 15 June 2010.

Among other MNC stocks, Foseco India (up 5.82%), Atlas Copco (up 3.97%), Astrazeneca Pharma (up 3.33%), Alfa Laval India (up 4.91%), Honeywell Automation (up 0.80%), Fairfield Atlas (up 15.49%), and Lanxess ABS (up 7.21%), gained.

Sugar stocks gained after the government reportedly hiked the levy sugar price for the ongoing October-September season to Rs 18 a kilogram from an average of Rs 13.05 a kilogram last season.

Bajaj Hindusthan (up 2.77%), Dhampur Sugar (up 2.92%), Balrampur Chini Mills (up 0.38%), and Shree Renuka Sugars (up 3.10%), rallied.

DQ Entertainment International surged 4.15% after the company signed an exclusive broadcasting agreement with Sun TV Network, one of India's largest media conglomerates, for the provision of animated content. The company made this announcement during trading hours today, 15 June 2010.

Reliance Natural Resources clocked the highest volume of 5.52 crore shares on BSE. IFCI (1.11 crore shares), Suzlon Energy (1.03 crore shares), Reliance Power (90.30 lakh shares) and Unitech (65.29 lakh shares) were the other volume toppers in that order.

Reliance Natural Resources clocked the highest turnover of Rs 360 crore on BSE. Hindustan Copper (Rs 204.82 crore), Reliance Power (Rs 158.07 crore), Reliance Capital (Rs 116.54 crore) and State Bank of India (Rs 110.15 crore) were the other turnover toppers in that order.