Market spurts on FII buying

Stocks surged last week as a better-than-expected US job data for August 2010 eased concerns about global economy. Sustained buying by foreign funds and good monsoon rains also boosted sentiments. Good rains in the current monsoon season will raise farm output, boost rural incomes and lower food inflation.



Foreign institutional investors (FIIs) are in a buying spree in India. Foreign funds have bought shares worth a net Rs 1,932.75 crore in the first few days in September 2010, as per data from the stock exchanges. The inflow has reached Rs 21,427.85 crore in calendar 2010.

The industrial expansion is likely to slow down in coming months, though farm growth would pick up in the second half of the year, Montek Singh Ahluwalia, deputy chairman of the Planning Commission, said on Thursday.

Food inflation accelerated in late August 2010, even as inflation in the Non-Food space declined and remained steady in the Fuel & Power group, data released by the Government showed today, 9 September 2010. Year-on-year inflation in the Food Articles group rose to 11.47% in the year through 28 August 2010, up from 10.86% in the previous week, the Commerce & Industry Ministry said today.

Inflation in the Primary Articles group, too, rose to 15.40% from 15.19% in the week ended 21 August 2010. But, inflation in the Non-Food group fell to 20.43% from 21.29%. Annual inflation in the Fuel & Power group and the Minerals group stood unchanged at 12.71% and 47.79%, respectively.

Good rains in August 2010 and in the first week of September 2010 has strengthened the optimism about a record kharif harvest this season. Further, the weather office's prediction that the monsoon will not start withdrawing before mid-September 2010 has boosted the outlook for the next rabi as well.

The monsoon rains were 26% above normal in the week to 8 September 2010, the weather office said today, 9 September 2010. The weekly reading reflects above-average showers over most parts of the country, except in the eastern region. Total rainfall since 1 June 2010 was 1% above normal.

The stock market remains shut on Friday, 10 September 2010, on account of Ramzan Id.

The BSE Sensex rose 578.23 points or 3.17% to 18,799.66, in the week ended Thursday, 9 September 2010. The 50-unit S&P CNX Nifty rose 160.65 points or 2.93% to 5,640.05.

The BSE Small-Cap index outperformed the Sensex, galloping 3.39% to 10,249.25 in the week. The BSE Mid-Cap index underperformed the Sensex, with a 2.43% gain at 8,050.73.

The key indices scaled 31-month highs on Monday, 6 September 2010, on signs the global economic recovery is on track. Stocks rose across the globe as better-than-expected US payrolls data eased market anxiety over chances of a double-dip recession in the world's biggest economy. Besides strong global cues, good monsoon this season and sustained buying by foreign funds, boosted domestic investor sentiment. The BSE 30-share Sensex jumped 338.62 points or 1.86% to 18,560.05. The S&P CNX Nifty rose 97.55 points or 1.78% at 5,576.95.

The key benchmark indices extended gains for the second consecutive trading session on Tuesday, 7 September 2010, with good monsoon rains supporting stock prices. But, trading was marked with immense volatility throughout the trading session. The BSE 30-share Sensex rose 85.01 points or 0.46% to 18,645.06. The S&P CNX Nifty rose 27.05 points or 0.49% at 5,604.

The key benchmark indices managed to end in positive terrain on Wednesday, 8 September 2010, gaining for the third day in a row, as good monsoon rains this year will raise farm output, boost rural incomes and lower food inflation. The two key benchmark indices -- the barometer index BSE Sensex and the 50-unit S&P CNX Nifty attained their highest closing levels in more than 31 months. The BSE 30-share Sensex rose 21.65 points or 0.12% to 18,666.71. The S&P CNX Nifty rose 3.85 points or 0.07% at 5,607.85.

The key benchmark indices hit fresh 31-month highs on Thursday, 9 September 2010, with bank shares leading the rally. The BSE 30-share Sensex rose 132.95 points or 0.71% to 18,799.66. The S&P CNX Nifty rose 32.20 points or 0.57% at 5,640.05.

Among 30 Sensex shares, 25 stocks rose, four fell and one was unchanged.

India's largest steel maker by sales Tata Steel was the top gainer in the Sensex. The stock rose 9.86% to Rs 593.2 last week. The company is reportedly in talks with banks to raise up to $5.5 billion loan to refinance debt at its European unit Corus. Another trigger for the upmove in the Tata Steel counter was a price hike. Tata Steel has reportedly raised flat product prices by about Rs 1,000/tonne with effect from 3 September 2010 on account of a pick-up in demand.

Cement maker ACC was the second biggest Sensex gainer. It rose 9.65% to Rs 980.15. Cement stocks saw an across the board surge last week on reports cement makers have raised prices in South India. Cement prices in Chennai have gone by Rs 40 per 50 kg bag to Rs 230 per bag. Cement prices in Hyderabad have been hiked from Rs 130 per bag to Rs 175 per bag.

India's largest commercial bank by branch network State Bank of India was the third biggest gainer, jumping 7.54% to Rs 2982.5.

Hindalco Industries (up 6.81% to Rs 182), Jaiprakash Associates (up 5.71% to Rs 119.4), ICICI Bank (up 5.11% to Rs 1050.75), Jindal Steel & Power (up 4.53% to Rs 714.2) and Sterlite Industries (up 4.38% to Rs 165.5), were the other major Sensex gainers.

Reliance Infrastructure was the biggest loser last week. It fell 1.99% to Rs 1009.90.

Cigarette maker ITC was the second biggest loser last week. It declined 1% to Rs 162.6.

Drug maker Cipla was the third biggest loser, declining 0.26% to Rs 306.45.

India's largest motorcycle maker Hero Honda Motors fell 0.21% to Rs 1732.55.

Mortgage lender Housing Development Finance Corporation (HDFC) was unchanged at Rs 630.60.

Index heavyweight Reliance Industries (RIL) rose 3.50% to Rs 957.95. RIL said on 1 September 2010, it bought additional 26.7 lakh shares or about 0.68% stake in EIH, raising its stake in the hotel chain to 14.8%. RIL had early last week bought a 14.12% stake in EIH from EIH promoters in an off-market deal valued at Rs 1,021 crore, or an average price of Rs 184 a share.