BSE Mid-Cap, Small-Cap indices edge lower

Key benchmark indices ended just a tad higher, as an initial rally which took the market to 29-month high triggered profit taking. The market breadth weakened, reversing from a strong breadth witnessed earlier in the day. European and Asian stocks and US index futures edged higher ahead of the release of the results of the stress test conducted on European banks. The BSE 30-share Sensex rose 17.83 points or 0.10%, off 106.58 points from the day's high and up 37.05 points from the day's low.



Realty stocks slipped on rate hike worries. Metal stocks declined in volatile trade. But, sugar stocks gained on reports the government will soon decontrol sugar prices. Auto, software and banking stocks saw mixed trend.

State Bank of India (SBI) struck a record high above Rs 2,500 and Larsen & Toubro hit a 52-week high. Bhel gained after reporting robust Q1 June 2010 results. But, Wipro slipped on profit booking, halting a six-day rally, after reporting robust Q1 result. Reliance Industries (RIL) was unchanged.

Stocks were volatile as traders rolled over positions in the derivatives segment from July 2010 series to August 2010 series ahead of the expiry of the near-month July 2010 contracts next Thursday, 29 July 2010. The market surged at the onset of the trading session on firm Asian stocks. The two key benchmark indices - the 30-share BSE Sensex and the 50-unit S&P CNX Nifty, both, struck their highest level in more than 29 months at the onset of the trading session. The market pared gains in early trade. The market moved in a range in morning trade.

The market came further off the day's high in mid-morning trade. The market slipped into the red in early afternoon trade. The Sensex soon regained positive. It once again slipped into the red shortly only to regain positive zone later. The market held positive zone in mid-afternoon trade as European stocks and US index futures rose. The Sensex once again slipped in late trade at the fag end of the trading session.

NSE's volatility index India VIX, which is a gauge of traders' perception of near-term risks in the market based on options prices, rose 1.79% to 19.24, halting a three-day slide. 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.

Investors poured money into equity funds focused on India and China in the week ended 21 July 2010 as concern about economic growth spurred withdrawals from developed-market stocks, global fund tracker EPFR Global said. India funds received a net $187 million, the most in 51 weeks, while China money managers took in $138 million, EPFR said.

Foreign funds have bought Indian equities worth a net Rs 6053.03 crore this month so far, till 22 July 2010, as per data from the stock exchanges. Foreign funds had pumped in Rs 7713.97 crore in equities in June 2010.

Domestic funds have sold shares worth a net Rs 3539.31 crore this month so far, till 22 July 2010. They had sold equities worth a net Rs 4777.05 crore in June 2010.

As per a UN report released on 22 July 2010, India climbed four notches to be ranked the ninth most attractive investment destination in 2009 with a total foreign direct investment inflow of $34.61 billion. The World Investment Report-2010, prepared by the United Nations Conference on Trade and Development (Unctad) said that India attracted sizeable overseas investment despite the overall drop in such inflows due to the global financial crisis.

The Prime Minister's Economic Advisory Panel on Friday, 23 July 2010, forecast 8.5% growth in GDP in the fiscal year that ends in March 2011 (FY 2011). It expects 4.5% growth in farm output in FY 2011. The headline inflation will be at 6.5% by March 2011, the panel said in a report. The report also said net capital inflows would be $73 billion.

Prime Minister's Economic Advisory Council C. Rangarajan said fertiliser subsidy bill must come down and diesel prices could be freed once inflation begins to come down.

The Reserve Bank of India (RBI) said on Thursday, 22 July 2010, it will allow take-out financing through external commercial borrowing for refinancing of rupee loans availed from domestic banks. Refinancing of domestic rupee loans with external commercial borrowings is not permitted, Reserve Bank of India said.

The key near term event is the Reserve Bank of India's quarterly policy review on Tuesday, 27 July 2010. Analysts expect another 25 basis points rate hike aimed at anchoring inflation expectations. The Reserve Bank of India (RBI) on 2 July 2010, hiked the repo rate by 25 basis points to 5.5% from 5.25%, with immediate effect. It also hiked the reverse repo rate, at which it absorbs excess cash from the banking system, by an equal 25 basis points to 4% from 3.75%. The central bank said the latest rate hike was a part of the calibrated exit from the expansionary monetary policy.

European shares were trading mixed on Friday as the data showed the Ifo Institute's German business-climate index rose to 106.2 in July 2010 from 101.8 in the previous month. The key benchmark indices in France and Germany were up 0.39% and 0.50% respectively. However, UK's FTSE 100 index fell 0.24%

British gross domestic product grew by a much stronger-than-expected 1.1% in the second quarter, government data showed Friday, 23 July 2010.

Investors are keenly awaiting the results of the stress tests on 91 European banks due after the close of business Friday, 23 July 2010. The European stress test exercise comes in the wake of an earlier US effort to instill new confidence in its own battered banking sector. European regulators had asked the region's biggest banks to publish a list of each lender's gross and net exposure to central and local governments in 30 countries in the region, including Greece, Spain, Ireland, Italy and Portugal to determine if they can survive potential losses from both a recession and a decline in the value of their government- bond holdings.

Asian markets rose on Friday, 23 July 2010, as commodity prices climbed and on upbeat guidance from select US bluechip companies. The key benchmark indices in Hong Kong, Indonesia, South Korea, Japan, Taiwan, and Singapore were up by between 0.38% and 2.28%. But China's Shanghai Composite declined 0.05%.

US stocks rebounded Thursday, 22 July 2010, amid better-than-expected corporate earnings, shrugging off a series of mixed economic data. The Dow Jones Industrial Average jumped 201.77 points or 1.99% to 10,322.30. The tech-rich Nasdaq composite index gained 58.56 points or 2.68% at 2,245.89 and the broader S&P 500 index climbed 24.08 points or 2.25% to 1,093.67.

In economic news, the Labor Department reported that new claims for US unemployment benefits rose more than expected last week, after two weeks of sharp declines linked largely to seasonal layoffs. Initial jobless claims surged more than eight percent to a seasonally adjusted 464,000 in the week ending 17 July 2010.

Existing US home sales fell for the second straight month in June, the National Association of Realtors (NAR) said, reflecting weakness in the housing industry which was at the epicenter of the financial crisis. Sales of single-family, town homes and condominiums dropped 5.1% to 5.37 million units from 5.66 million in May 2010.

Trading in US index futures indicated that the Dow could rise 29 points at the opening bell on Friday, 23 July 2010.

Back home, government data released on 22 July 2010 showed the fuel price index rose 14.27% in the year to 10 July 2010, unchanged when compared to previous week's rise of 14.27%. The food price index climbed 12.47%, lower than previous week's annual rise of 12.81%. The primary articles index was up 16.48%, compared with the previous week's reading of 16.25%.

The headline inflation rose lower-than-expected 10.55% in June 2010. The rate of increase was higher than May's rise of 10.16%. Inflation for April 2010 was revised upwards to 11.23% from 9.59%.

On the corporate front, the combined net profit of a total of 339 companies rose 25.50% to Rs 22428 crore on 17.80% rise in sales to Rs 152120 crore in Q1 June 2010 over Q1 June 2009.

The government plans to present in parliament a bill to implement the goods and services tax (GST), Parliamentary Affairs Minister Pawan Kumar Bansal said on Friday, 23 July 2010. The goods and services tax (GST), which is to replace the existing value added tax (VAT), service tax, excise duties and central sales tax among others, will be in place from 1 April 2011. Reports indicated that the Centre and states on Wednesday, 21 July 2010 arrived at a broad consensus on rolling out independent India's biggest tax reforms that will simplify the manner in which corporates, small enterprises and traders will be levied taxes on goods and services. The new indirect tax reform is to streamline the movement of goods and services across India with a single tax structure.

A committee set up by the stock market regulator Securities & Exchange Board of India (Sebi) has recommended major changes in the existing law governing substantial acquisition of shares and takeovers. The committee headed by C. Achuthan has recommended an increase in the acquisition threshold for the initial trigger of an open offer from the current level of 15% to 25% of the voting capital of a listed company. While no change has been recommended in the annual creeping acquisition limit of 5%, the committee has recommended that creeping acquisition be permitted only to acquirers who already hold more than 25% of the voting capital, subject to the aggregate post-acquisition shareholding not exceeding the maximum permissible non-public shareholding.

The committee has recommended that an open offer should be made for all the shares of the target company to ensure equality of opportunity and fair treatment of all shareholders, big and small. The exception to this rule is the size of an open offer where the same is voluntary in nature. The current regulations mandate a minimum offer size of only 20%.

Investors are closely monitoring the progress of the monsoon rains. The annual monsoon rains were 17% below normal in the week to 21 July 2010, improving after a 24% deficit in the previous week, the India Meteorological Department said on Thursday, 22 July 2010. The seasonal monsoon rains during 1 June to 22 July 2010 were 12% below normal, the weather office added.

Southwest monsoon was vigorous over Sub-Himalayan West Bengal & Sikkim and active over Bihar, West Uttar Pradesh, Uttarakhand, Himachal Pradesh, Punjab, Konkan & Goa, Vidarbha, Telangana, Coastal & South Interior Karnataka and Kerala during past 24 hours, the weather office said in its daily report on Thursday 22 July 2010.

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 weather office expects this year's monsoon rains to be at 102% of the long-period average. Good monsoon rains would help raise farm output, boost rural incomes and lower food inflation.

The BSE 30-share Sensex was up 17.83 points or 0.10% to 18,130.98, its highest level since 6 February 2008. The Sensex rose 124.41 points at the day's high of 18,237.56 at the onset of the trading session. The index lost 19.22 points at the day's low of 18,093.93 in early afternoon trade.

The S&P CNX Nifty was up 7.15 points or 0.13% to 5,449.10, its highest level since 5 February 2008. Nifty had struck an intra-day high of 5,477.50 in early trade.

The market breadth, indicating the overall health of the market, was weak, in contrast to a strong breadth earlier in the day. On BSE, 1795 shares declined while 1201 shares advanced. A total of 85 shares remained unchanged.

The BSE Mid-Cap index fell 0.31% and the BSE Small-Cap index slipped 0.54%. Both these indices underperformed the Sensex.

Sectoral indices on BSE displayed mixed trend. The BSE Consumer Durables index (up 0.46%), the BSE Capital Goods index (up 0.47%), and the BSE TECk index (up 0.67%), were the top gainers among the sectoral indices on the BSE.

The BSE Healthcare index (down 0.39%), the BSE BSE Metal index (down 0.72%), and the BSE Realty index (down 1.42%), were the worst performers among the sectoral indices on BSE

The total cash segment turnover on BSE amounted to Rs 4883 crore, higher than Rs 4344 crore on Thursday, 22 July 2010.

From the 30-share Sensex pack, 19 stocks fell and the rest of them advanced.

India's largest listed telecom services provider by sales Bharti Airtel gained 3.59% to Rs 312.90 on reports the company plans to launch iPhone 4, the latest product from Apple Computer's stable, by October this year. It was the top gainer from the Sensex pack.

Idea Cellular jumped 4.89% on strong revenue growth in Q1 June 2010. Consolidated net profit fell 32.2% to Rs 201.40 crore on 22.8% growth in revenue to Rs 3653.70 crore in Q1 June 2010 over Q1 June 2009. The result was announced after trading hours on Thursday, 22 July 2010.

India's second largest listed telecom services provider by sales Reliance Communications (RCom) slipped 1.40%.

Index heavyweight Reliance Industries (RIL) was unchanged at Rs 1058.95 after swinging in a band of Rs 1057 - 1070.70 during the day. As per recent reports, RIL has rejected the oil ministry's directive to sell gas from its Krishna Godavari basin field to new customers by reducing supply to existing ones. As many as 16 companies are waiting to sign gas sale and purchase agreements with RIL.

India's largest power equipment maker by sales Bharat Heavy Electricals rose 1.39% as net profit surged 41.85% to Rs 667.66 crore on 15.78% increase in net sales to Rs 6479.69 crore in Q1 June 2010 over Q1 June 2009. The company declared its results during trading hours today, 23 July 2010.

India's largest engineering & construction firm by sales Larsen & Toubro rose 0.52% to Rs 1937.25, after hitting a 52-week high of Rs 1944 in intra-day trade today, 23 July 2010. As per recent reports, the company has bagged the Rs 12,132 crore Hyderabad Metro Rail project.

But, India's largest dam builder by sales Jaiprakash Associates dipped 1.87% to Rs 128.40 ahead of its June 2010 quarterly result today, 23 July 2010. It was the top loser from the Sensex pack.

Alstom Projects jumped 7.63% after the company secured contracts worth around 450 million euros to build two combined cycle gas units for a power plant in India.

Banking stocks saw divergent trend. India's biggest commercial bank in terms of branch network, State Bank of India (SBI) gained 0.68% to Rs 2494, after striking a record high of Rs 2504 in intra-day trade today, 23 July 2010. The bank is reportedly hitting the overseas debt markets to raise funds for overseas lending requirement of the bank. The size of the medium term notes, having a tenure of five years, to be raised by the bank may be somewhere between $500 million and $1.5 billion.

But, India's largest private sector bank by market capitalisation ICICI Bank slipped 0.19% and India's second largest private sector bank by market capitalisation HDFC Bank lost 1.01% on profit booking.

UCO Bank climbed 5.44% after net profit rose 45.49% to Rs 260.21 crore on 10.80% increase in operating income to Rs 2862.73 crore in Q1 June 2010 over Q1 June 2009. The result was announced during trading hours today.

Allahabad Bank rose 3.93% after net profit rose 14.61% to Rs 347.14 crore on 13.63% increase in operating income to Rs 2701.68 crore in Q1 June 2010 over Q1 June 2009. It was the fifth biggest gainer in 'A' group. The result was announced during trading hours today.

Among other PSU stocks, Bank of Baroda (down 0.16%), and Punjab National Bank (down 0.35%) slipped. But, Bank of India rose 0.10%.

Software stocks saw mixed trend. India's third largest software services exporter Wipro slipped 1.05% to Rs 411.25, off sharply from day's high of Rs 433, thereby halting a six-day 4.43% gain. The company reported strong results before trading hours today, 23 July 2010. Consolidated net profit rose 30.50% to Rs 1318.60 crore on 16.17% increase in total income to Rs 7371.50 crore in Q1 June 2010 over Q1 June 2009.

Wipro's chairman, Azim Premji said the company is seeing strong demand environment across industry verticals despite macro challenges. Wipro added the highest number of billable employees ever in Q1 June 2010. For Q2 September 2010, the company expects revenues from its IT services business to be in the range of $1,253 million to $1,277 million, a sequential increase of 4.1% to 6.1%

India's second largest software services exporter Infosys Technologies gained 0.70% after its ADR rose 3.36% on 22 July 2010. India's largest software services exporter TCS slipped 0.43% to Rs 838.90 after a striking day's high of Rs 850

India's largest oil exploration firm by sales Oil & Natural Gas Corporation slipped 1.60% ahead of its Q1 June 2010 earnings on 29 July 2010.

Auto stocks were mixed. India's largest tractor maker by sales Mahindra & Mahindra (M&M) fell 0.92%, halting a two-day 5.02% rally. The company, last week, said its board of directors at its meeting held on 15 July 2010, was briefed about the company's potential bid for Ssangyong Motors Company, South Korea. A decision on the bid would be taken at the company's next board meeting to be held on 28 July 2010. The company would also unveil its Q1 June 2010 earnings on 28 July 2010.

India's top small car maker by sales Maruti Suzuki India gained 0.17% ahead of its Q1 June 2010 earnings on Saturday 24 July 2010. India's largest truck maker by sales Tata Motors slipped 0.19%.

Metal stocks declined in volatile trade. Hindustan Zinc (down 2.28%), JSW Steel (down 0.84%), National Aluminium Company (down 1.08%), Sterlite Industries (down 1.70%), Tata Steel (down 0.95%), Sesa Goa (down 0.67%), declined.

LMEX, a gauge of six metals traded on the London Metal Exchange rose 2.24% in London on Thursday, 22 July 2010.

Realty stocks slipped on profit booking. HDIL (down 3.62%), Ackruti City (down 0.54%), Unitech (down 2.33%), Indiabulls Real Estate (down 1.84%), Parsvnath Developers (down 1.22%), Orbit Corporation (down 2.03%), DLF (down 1.15%), declined.

Sugar stocks gained on reports the government will soon decontrol sugar prices. The sugar sector is tightly controlled in the current scenario.

Bajaj Hindusthan (up 1.14%), Balrampur Chini (up 0.57%), Sakthi Sugar Mills (up 1.61%), Triveni Engineering & Industries (up 3.94%), Oudh Sugar (up 3.02%), Dhampur Sugar Mills (up 1.8%), and Shree Renuka Sugar (up 2.18%), rose.

Riddhi Siddhi Gluco Biols surged 20% after net profit jumped 506.42% to Rs 31.17 crore on 29.74% rise in net sales to Rs 202.08 crore in Q1 June 2010 over Q1 June 2009. The result was announced after market hours on Thursday, 22 July 2010.

Karuturi Global clocked the highest volume of 3.89 crore shares on BSE. FCS Software (3.12 crore shares), Cals Refineries (2.19 crore shares), IFCI (1.506 crore shares) and Shree Ashtavinayak Cine Vision (1.505 crore shares) were the other volume toppers in that order.

BF Utilities clocked the highest turnover of Rs 246.63 crore on BSE. Tata Steel (Rs 122.07 crore), JSW Steel (Rs 116.61 crore), United Breweries (Holdings) (Rs 104.67 crore), and United Breweries (Rs 94.50 crore) were the other turnover toppers in that order.