ICICI Bank strikes 52-week high

Profit profit at higher level wiped off most of the strong initial gains as the key benchmark indices ended just a tad higher. Weakness in European stocks and US index futures, triggered profit taking. Nine out of 13 sectoral indices on BSE were in positive zone. Healthcare stocks were in demand while FMCG and IT stocks fell. The market breadth turned negative, in contrast with a strong breadth in early trade. The BSE 30-share Sensex rose 30.69 points or 0.15%, off close to 231 points from the day's high.



The market surged in early trade, tracking gains in Asian stocks. The market held firm in morning trade. Stocks pared gains in mid-morning trade as profit taking emerged after recent strong gains. The market came off lower level in early afternoon trade. The key benchmark indices came off lower level soon after hitting fresh intraday lows in afternoon trade. However, the intraday recovery proved short-lived. The market once again came off the day's high in mid-afternoon trade. The Sensex slipped into the red at the fag end of the trading session.

NSE's volatility index, India VIX, a gauge of traders' perception of near-term risks in the market based on options prices, gained 6.39% to 22.80. The index had dropped 3.68% to 21.43 on Friday, 1 October 2010. 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.

Planning Commission deputy chairman Montek Singh Ahluwalia on Monday said there no signs of overheating in the Indian economy and the government can easily finance a widening current account deficit. He said that the widening current account deficit was, in fact, a sign of strong recovery.

There is no need to intervene in the forex markets or cap foreign portfolio inflows, which have pushed the rupee to more than five-and-half-month highs, the finance minister said on Monday. "The Reserve Bank is monitoring it and I don't think just now there is any cause for intervention," Pranab Mukherjee told a television channel. "As and when intervention is called for, the Reserve Bank will be there." Asked if the time was not yet right to cap foreign inflows, Mukherjee said: "I think so."

Foreign funds continue to aggressively mop up Indian shares. Net equity inflow in 2010 now stands at a record $19.43 billion, above last year's $17.45 billion, as per data from the Securities & Exchange Board of India. The Sebi data includes FII inflow through primary and secondary market route.

The country requires sustained foreign investment to plug its widening current account deficit, which has been worsened by a yawning trade deficit.

Coming back to stocks, a section of the market is concerned that the large initial public offer (IPO) of state-run Coal India in mid-October 2010 would soak liquidity from the secondary equity markets. The government plans to raise about Rs 15000 crore to Rs 16000 crore from divestment of 10% stake in Coal India. The IPO is billed as the country's largest issue ever.

European shares moved lower on Monday, 4 October 2010, with deal news again grabbing the headlines as Sanofi-Aventis launched a hostile bid for Genzyme. The key benchmark indices in UK, Germany and France declined by between 0.46% to 1.10%.

The United States on Sunday, 3 October 2010, warned of the potential for terrorist attacks in Europe and urged travelers to be vigilant, while Britain upgraded its assessment of terror threats in Germany and France. The alert issued by the State Department urged US citizens traveling in Europe to "take every precaution to be aware of their surroundings and to adopt appropriate safety measures to protect themselves when traveling."

Asian stock markets rose on Monday, 4 October 2010, a day ahead of central bank decisions in Japan and Australia. Wall Street's higher finish before the weekend also bolstered sentiment. The key benchmark indices in Indonesia, Singapore, Taiwan, Hong Kong and South Korea rose by between 0.02% to 1.17%. The Chinese markets were closed on account of holidays. Japan's Nikkei Average fell 0.25%, reversing initial gains.

Trading in US index futures indicated that the Dow could fall 46 points at the opening bell on Monday, 4 October 2010.

Closer home, India's manufacturing sector continued to expand although at a considerably slower pace than in preceding months, predominantly weighed down by a fall in new orders and output. The HSBC Markit Purchasing Managers' Index, based on a survey of 500 companies, slid to 55.1 in September 2010, which marks the lowest reading since November last year, from 57.2 in the August 2010 survey. Though the key index for manufacturing in Asia's third largest economy has slipped, this was the 18th consecutive month it has remained above the 50 mark that divides growth from contraction.

Bond yields edged higher for the second day in a row as food inflation surged in mid-September 2010. The yield on the benchmark 10-year bond was hovering at 7.94%, compared with Friday's (1 October 2010) close of 7.91%. The yield on the second most traded 8.13% 2,022 bond was hovering at 8.09%, compared with Friday's (1 October 2010) close of 8.05%.

The food price index rose 16.44% while the fuel price index climbed 10.73% in the year to 18 September 2010, government data released on Thursday, 30 September 2010, showed. In the prior week, annual food and fuel inflation stood at 15.46% and 11.48% respectively. The primary articles index was up 18.31% in the latest week compared with an annual rise of 16.80% in the previous week, both under 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 2010.

The BSE 30-share Sensex rose 30.69 points or 0.15% to 20,475.73, its highest closing since 14 January 2008. The index fell 7.68 points at the day's low of 20,437.36 at the fag end of the trading session. The Sensex surged 261.60 points at the day's high of 20,706.74 in early trade.

The S&P CNX Nifty was up 16.05 points or 0.26% at 6,159.45, its highest closing since 14 January 2008. It hit high of 6,222.10 in morning trade.

The BSE Mid-Cap index rose 0.69% and the BSE Small-Cap index rose 0.33%. Both these indices outperformed the Sensex.

The market breadth turned negative in contrast with a strong breadth in early trade. On BSE, 1541 shares declined while 1429 shares advanced. A total of 124 shares remained unchanged.

BSE clocked turnover of Rs 5416 crore, lower than Rs 5980.28 crore on Friday, 1 October 2010.

The BSE Healthcare index (up 1.69%), Consumer Durables index (up 1.47%), banking sector index Bankex (up 0.79%), Auto index (up 0.63%), Metal index (up 0.61%), Oil & Gas index (up 0.55%), PSU index (up 0.52%), Realty index (up 0.45%) and Power index (up 0.24%), outperformed the Sensex.

Capital Goods index (down 0.26%), IT index (down 0.37%) and FMCG index (down 0.71%), underperformed the Sensex.

From the 30 share Sensex pack, 16 fell and rest rose.

Index heavyweight Reliance Industries (RIL) rose 1.14% to Rs 1017.90, with the stock gaining for the second straight day. But, the stock came off the day's high of Rs 1025. RIL has reportedly revived plans to build a cracker and downstream facilities in Jamnagar. Plans for the petrochemical complex, which is located in a special economic zone, were put on ice in the wake of the global financial downturn. The new complex will complement the site's second refinery, reports suggest.

Reliance Communications jumped 2.38% to Rs 172.25, on reports the firm is likely to get additional spectrum following the telecom ministry's move to prioritize operators.

IT stocks reversed initial gains. India's largest IT exporter by sales Tata Consultancy Services (TCS) fell 0.24%. The company recently won a $50 million infrastructure management contract from AGL Energy, a leading renewable energy company in Australia.

India's second largest software services exporter by sales Infosys fell 0.86%. The stock hit record high of Rs 3162 today.

India's third largest software services exporter by sales Wipro rose 0.98% at Rs 465.45 after the company's American depository receipt, or ADR jumped 8.16% to $15.64 in the New York Stock Exchange on Friday, 1 October 2010. The stock hit 52-week high of Rs 471.75 today.

Banking stocks were mixed. India's largest private sector bank by net profit ICICI Bank rose 2%, with the stock gaining for the third straight day. The stock hit 52 week high of Rs 1169.75 today.

India's second largest private sector bank by net profit HDFC Bank fell 0.23%, reversing initial gains.

India's largest commercial bank by net profit and branch network State Bank of India (SBI) fell 0.15%, reversing initial gains. The stock hit a record high of Rs 3299 today.

India's largest engineering and construction firm by sales Larsen & Toubro fell 1.54% to Rs 2066.55, reversing initial gains. The stock hit 52-week high of Rs 2117 today.

Among other capital goods stocks, Lakshmi Machine Works, Usha Martin, Jyoti Structures, Gammon India, SKF India, Areva T&D and Thermax fell by between 0.21% to 1.32%.

Auto stocks were mixed. Bajaj Auto fell 0.6%, reversing initial gains. The stock hit all-time high of Rs 1,589.90 today. Total sales rose 26% to 3,52,769 units in September 2010 over September 2009.

TVS Motor Company fell 0.2%. Total vehicle sales grew 31% to 1,88,005 units in September 2010 over September 2009.

Commercial vehicle maker Tata Motors rose 1.85%. The stock hit a record high of Rs 1155.75 on Friday, 1 October 2010. The company said it has acquired 80% stake in Italian design and engineering firm Trilix SRL, for 1.85 million euros. The acquisition will help enhance the company's styling and design capabilities to global standards, Tata Motors said in a statement.

Meanwhile, the company announced during market hours today it has increased the total size of ordinary and 'A' ordinary shares placement to $750 million from a base amount of $525 million following strong investor response. The company said the size of the 'A' ordinary shares issue has been raised to $550 million from $400 million.

Tata Motors' total sales, excluding those of the luxury Jaguar, Land Rover brands, increased 23% to 64,668 units in September 2010 over September 2009.

India's largest tractor and utility vehicles maker Mahindra & Mahindra (M&M) rose 2.51%, after gaining 2.91% on Friday, 1 October 2010. The company said on Friday, 1 October 2010, it sold 35,177 vehicles in September 2010, nearly 24% more from a year earlier.

India's top car maker, Maruti Suzuki fell 0.15%. Total vehicle sales rose 29.6% to 1,08,006 units in September 2010 over September 2009. This is a record monthly sale from the car major.

India's leading bike maker by sales Hero Honda Motors fell 1.85%, reversing initial gains. Sales rose 8.1% to 4.33 lakh units in September 2010 over September 2009.

FMCG stocks fell on profit taking. Godrej Consumer Product, ITC, Nestle India, Britannia Industries and Hindustan Unilever fell by between 0.34% to 3.19%.

VIP Industries reported a highest turnover of Rs 298.58 crore on BSE. Orchid Chemicals & Pharmaceuticals (Rs 175.88 crore), Bhushan Steel (Rs 148.55 crore), Koutons Retail India (Rs 142.24 crore) and IFCI (Rs 103.65 crore), were the turnover toppers on BSE in that order.

Cals Refineries clocked a highest volume of 3.18 crore shares on BSE. IFCI (1.52 crore shares), Birla Power Solutions (1.32 crore shares), Suzlon Energy (1.28 crore shares) and Koutons Retail India (93.15 lakh shares), were the volume toppers on BSE in that order.