Market snaps last two days losses

The key benchmark indices snapped last two days losses on Friday as the recent strong foreign fund inflows kept the sentiment upbeat. The BSE Sensex closed above the psychological 20,000 mark while S&P CNX Nifty crossed 6000 mark. Investors had booked profits in last two days after the recent strong rally which saw market scale their 32 month highs. Global cues lacked clear direction today. US index futures rose. European markets dropped. Asian stocks were mixed. The BSE 30-share Sensex was up 184.17 points or 0.93%, up close to 215 points from the day's low and off close to 25 points from the day's high. FMCG, banking, consumer durables and realty stocks led the surge. Index heavyweight Reliance Industries edged higher in volatile trade.



The market moved between the positive and negative terrain in early trade. It regained strength to hit fresh intraday highs in morning trade as Asian stocks turned positive and as US index futures rose. It pared gains from the day's high in mid-morning trade. It further trimmed gains in early afternoon trade. Market surged to day's high in afternoon trade. It extended gains to hit fresh intraday highs in mid-afternoon trade. The market trimmed gains after hitting fresh intraday highs in late trade.

Investors made a beeline to Asian equities and emerging market bonds in the latest week, sidestepping risks associated with Europe's finances and anticipating the Federal Reserve will provide even more cheap liquidity, EPFR Global said on Friday. Asia ex-Japan equity funds had their best week of inflows in more than 15 months for the week ended 22 September 2010.

Meanwhile, the Supreme Court on Thursday ordered the Allahabad High Court to delay a potentially explosive verdict on whether Hindus or Muslims own land around the demolished Babri mosque in Ayodhya. Hindu mobs demolished the mosque in the town of Ayodhya in 1992, claiming it was built on the birthplace of their god-king Rama. The demolition triggered the worst religious riots since partition in 1947, and some 2,000 people died. The Supreme Court prevented the lower court from delivering the judgement on Friday, 24 September 2010 as originally slated and it is now unclear when the verdict will come. The top court will now hear an appeal for a stay on the verdict on 28 September 2010, filed by a person who said the matter could be settled out of court.

The government on Thursday doubled foreign investment limits in government securities to $10 billion from $5 billion and increased the limit for corporate bonds to $20 billion from $15 billion. It said that it believes the move will help to raise investment in bonds, infrastructure and develop bond markets in India at the same time as balancing its monetary policy.

The Union Cabinet today approved the proposed National Identification Authority of India Bill, 2010, which envisages to make UIDAI a statutory body. The Bill proposes to constitute a statutory authority to be called the National Identification Authority of India and lays down the powers and functions of the Authority, the framework for issuing unique identification numbers (aadhaar numbers), major penalties and other related matters through an Act of Parliament. The Bill will now be introduced in Parliament for approval by the members. The UID project is primarily aimed at ensuing inclusive growth by providing a form of identity to those who do not have any identity. Apart from providing identity, the aadhaar number will enable better delivery of services and effective governance, it said.

European stocks dropped on Friday, as a surprise rise in German business sentiment was not enough to offset unease about the global economy. The key benchmark indices in UK, Germany and France were down by between 0.01% to 0.19%.

The German Ifo business sentiment index rose to 106.8 in September from 106.7 in August, which was a three-year-high.

Asian stock markets were mixed Friday after a jump in U.S. unemployment claims provided more evidence of an anemic recovery in the world's biggest economy. The key benchmark indices in Hong Kong, Singapore, Indonesia and South Korea rose by between 0.31% to 1.81%. But the key benchmark indices in Japan and Taiwan fell 0.99% and 0.44% respectively. Chinese markets were shut today for a holiday.

Japanese stocks, closed the previous day for a holiday, were lower despite an apparent intervention in the currency market by the Bank of Japan to weaken the yen and amid news of Chinese restrictions on exports to Japan of rare earth elements which are used in advanced manufacturing.

Trading in US index futures indicated that the Dow could gain 41 points at the opening bell on Friday, 24 September 2010.

U.S. stocks fell on Thursday after a weak reading on the labor market dropped stocks through a key technical level. The Dow Jones industrial average ended down 76.89 points, or 0.72% at 10,662.42. The Standard & Poor's 500 Index finished down 9.45 points, or 0.83% at 1,124.83. The Nasdaq Composite Index fell 7.47 points, or 0.32% at 2,327.08. Jobless claims unexpectedly rose in the latest week, a sign the labor market still faces headwinds. Existing-home sales rose in August, but from depressed levels.

Back home, the food price index rose 15.46% while the fuel price index climbed 11.48% in the year to 11 September 2010, government data on Thursday showed. In the prior week, annual food and fuel inflation stood at 15.10% and 11.48% respectively.

The primary articles index was up 16.80% in the latest week compared with an annual rise of 16.22% in the previous week, which was the first reading of a new series of data with a different base year of 2004-05, new components and weightings. The wholesale price index the most widely watched gauge of prices in India rose 8.5% in August.

Foreign institutional investors (FIIs) are in a buying spree in India. As per provisional figures, foreign institutional investors (FIIs) bought shares worth a net Rs 534.45 crore on Thursday, 23 September 2010. Domestic institutional investors dumped shares worth Rs 645.69 crore on that day.

FII inflow in September 2010 totaled Rs 17,499.43 crore (till 23 September 2010). FIIs had bought equities worth Rs 11687.50 crore in August 2010. FII inflow in the calendar year 2010 totaled Rs 36994.53 crore (till 23 September 2010).

At a mid-term policy review on Thursday, 16 September 2010, the Reserve Bank of India (RBI) signaled that it may be nearing a pause in its current tightening cycle. The central bank said its rate and liquidity actions since October 2009 have been driven by two considerations -- normalisation of the monetary policy stance as the crisis abated and inflation management. The Reserve Bank of India believes that the tightening that has been carried out over this period has taken the monetary situation close to normal, it said. Consequently, the role of normalisation as a motivation for further actions is likely to be less important, the RBI said.

The RBI on Thursday, 16 September 2010 raised its repo rate, or benchmark lending rate, by a quarter point to 6%, at a mid-term monetary policy review. The central bank also hiked the reverse repo rate, or the rate at which it borrows funds, by half a point to 5%. Both these changes will take place with immediate effect.

Cumulative rainfall in the country during 1 June to 22 September was 4% above normal, IMD data showed. 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. 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 BSE 30-share Sensex was up 184.17 points or 0.93% to 20045.18. The Sensex gained 210.74 points at the day's high of 20071.75 in late trade. The index lost 27.49 points at the day's low of 19,833.52 in early trade.

The S&P CNX Nifty was up 58.75 points or 0.99% to 6018.30.

The market breadth, indicating the health of the market, was strong. On BSE, 1848 shares advanced while 1149 shares declined. A total of 88 shares remained unchanged.

Among the 30-share Sensex pack, 25 advanced while the rest declined.

The BSE Mid-Cap index rose 1.04% and the BSE Small-Cap index rose 1.05%. Both the indices outperformed the Sensex.

The BSE Realty index (up 2.78%), BSE FMCG index (up 1.79%), BSE Consumer Durables index (up 1.67%), BSE Banking index Bankex (up 0.98%), BSE Auto index (up 0.94%), outperformed the Sensex.

BSE Metal index (up 0.3%), BSE IT index (up 0.51%), BSE PSU index (up 0.54%), BSE Oil & Gas index (up 0.55%), BSE Power index (up 0.64%), BSE Capital goods index (up 0.68%) and BSE Healthcare index (up 0.86%) and underperformed the Sensex.

The BSE clocked turnover of Rs 5589 crore higher than Rs 4596.61 crore on Thursday, 23 September 2010.

Index heavyweight Reliance Industries (RIL) rose 0.4% to Rs 1001.65, reversing a three-day 4.03% slide on bargain hunting. The stock moved between the day's high of Rs 1008.70 and low of Rs 987. Reports last week indicated RIL is in advanced talks with US-based Chesapeake Energy to buy a stake in Eagle Ford shale gas project in the US.

Banking stocks reversed initial losses on expectations of pick up in credit offtake. India's largest bank by net profit and branch network State Bank of India (SBI) rose 0.12%. India's second largest private sector bank by net profit HDFC Bank rose 1.3%. India's largest private sector bank by net profit ICICI Bank rose 1.18%.

Interest rate sensitive realty stocks rose on renewed buying. HDIL, Ansal Properties, Peninsula Land, Ackruti City, Indiabulls Real Estate and Unitech rose by between 0.82% to 3.14%.

Realty major DLF jumped 5.18% and was the top gainer from the Sensex pack.

Consumer durables stocks rose on expectations of good demand in festive season. Blue Star, Videocon Industries, Rajesh Exports and Titan Industries rose by between 0.6% to 4.43%.

FMCG stocks were in demand in anticipation of surge in sales due to the ongoing festive season. Also reports of price hike and above-normal monsoon boosting rural sales aided the surge.

India's largest FMCG firm by sales Hindustan Unilever jumped 3.93% to Rs 314.65 after hitting a 52-week high of Rs 317.25 today.

India's largest cigarette maker by sales ITC rose 1.25% to Rs 178.80 after striking a record high of Rs 180.70 today.

Telecom pivotals staged a comeback after the recent slide. India's largest listed cellular services provider by sales Bharti Airtel gained 3.56%. India's second largest listed cellular services provider by sales Reliance Communications rose 1.1%. Idea Cellular rose 1.18%.

India's largest engineering and construction firm by sales Larsen & Toubro rose 0.91%. The company during market hours on Thursday announced its collaboration with Befula Investments (South Africa) for power transmission & distribution opportunities in South Africa.

Among other capital goods stocks, Bharat Heavy Electricals, Thermax, Siemens, ABB and Crompton Greaves rose by between 0.01% to 0.86%.

India's largest oil & gas exploration firm by sales Oil and Natural Gas Corporation rose 1.12% extending Thursday's 1.49% gains. The company announced after market hours today that the two exploration discoveries have been notified to Directorate General of Hydrocarbons. It also said that company began first shale gas exploration in Ichapur village in Burdwan district in West Bengal.

Sun Pharmaceutical Industries rose 1.71% after company announced during market hours today its board of directors has approved 5 for 1 stock split.

Steel stocks rose on reports steel companies are mulling a fresh round of steel price hike after a 3-4% steel price hike in the month of September. Steel Authority of India, Tata Steel, JSW Steel rose by between 0.64% to 1.72%.

Other metal stocks rose as LMEX, a gauge of six metals traded on the London Metal Exchange rose 1.26% on Thursday, 23 September 2010. National Aluminum Company, Hindustan Zinc and Hindalco Industries rose by between 0.01% to 0.95%.

Auto stocks were mixed. India's top truck maker by sales Tata Motors fell 0.17%. Tata Motor's Nano, the world's cheapest car, which comes with a 600-cc petrol engine, is reportedly set to roll out in a diesel avatar apart from new petrol variants. The new engines will have capacities of 1,000 cc and above.

India's largest tractor and utility vehicles maker Mahindra & Mahindra (M&M) fell 0.05%.

India's top small car maker by sales Maruti Suzuki India rose 1.48%. Reportedly, the company is planning to roll out a multi utility vehicle at the start of 2012.

India's leading bike maker by sales Hero Honda Motors rose 3.85%. Recent reports indicated Honda Motor Co of Japan is looking to end its joint venture with the Munjal family – the promoters of Hero Honda Motors. Both own 26% each in the bike maker.

A recent Society of Indian Automobile Manufacturers data showed domestic automobile sales rose 25.24% to a record 12.63 lakh units in August 2010 in over August 2009, boosted by rising incomes, new models and lower borrowing costs. Exports climbed 28% to 191,033 units.

Birla Power Solutions clocked highest volume of 2.97 crore shares on BSE. Cals Refineries (2.62 crore shares), Mahindra Satyam (1.67 crore shares), Ispat Industries (1.29 crore shares) and South Indian Bank (1.03 crore shares) were the other volume toppers in that order.

Jindal Poly Film clocked highest turnover of Rs 174.47 crore on BSE. Mahindra Satyam (Rs 167.46 crore), Bajaj Finserv (Rs 144.15 crore), State Bank of India (Rs 120.83 crore) and Bajaj Electricals (Rs 103.02 crore) were among the other turnover toppers in that order.