Realty, metal stocks lead 1.87% Sensex surge

Equities started October 2010 on a buoyant note on Friday, with the two key benchmark indices -- the barometer index BSE Sensex and the 50-unit S&P CNX Nifty, scaling 32-1/2-month highs. Firm global stocks underpinned sentiments. Data showing massive buying by foreign funds on Thursday, 30 September 2010 and robust monthly sales reported by auto firms, also boosted sentiment. Auto, consumer durables, capital goods, metal and realty stocks led the rally.



The market breadth was strong. All the sectoral indices on BSE were in green. Tata Motors, Infosys, State Bank of India and Bajaj Auto scaled lifetime highs. Capital goods giants Bhel and Larsen & Toubro hit 52 week highs. The BSE 30-share Sensex jumped 375.92 points or 1.87%. The market edged higher for the second straight day.

NSE's volatility index, India VIX, a gauge of traders' perception of near-term risks in the market based on options prices, dropped 3.68% to 21.43. The index had risen 0.41% to 22.25 on Thursday, 30 September 2010. The index had risen 4.47% to 22.16 on Wednesday, 29 September 2010. The index had dropped 5.14% to 21.21 on Tuesday, 28 September 2010. The index had risen 2.99% to 22.36 on Monday, 27 September 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.

The market jumped in early trade, tracking firm Asian stocks. Stocks extended gains in morning trade. The market hit a fresh 32-1/2-month high in mid-morning trade. The market remained firm in early afternoon trade. The market pared gains in afternoon trade after hitting a fresh 32-1/2-month. The market extended gains in mid-afternoon trade. The market further extended gains in late trade.

Exports rose for the tenth straight month in August 2010, growing an annual 22.5% to $16.64 billion, government data on Friday showed. Imports for the month rose 32.2% to $29.7 billion, widening the country's trade deficit to $13.04 billion.

Data on Thursday, 30 September 2010, showed that the current account deficit widened in the June 2010-quarter from the previous three months due to a higher merchandise trade gap and lower earnings through services.

The 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.

Foreign funds continue to aggressively mop up Indian shares. Foreign institutional investors (FIIs) bought shares worth staggering Rs 4755.80 crore in a single trading session on Thursday, 30 September 2010, which was a result of gross purchases Rs 10917.80 crore and gross sales Rs 6162 crore. There was an inflow of Rs 4003.90 crore into secondary equity markets on that day, which was a result of gross purchases Rs 10144.50 crore and gross sales Rs 6140.60 crore.

Net equity inflows 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.

But, 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 stocks started the month of October 2010 on a positive note Friday, with Repsol soaring on deal news, and as crude prices and oil stocks moved higher. However, stocks came off the day's highs. The key benchmark indices in UK and Germany were up by 0.13% to 0.67%. But, France's CAC 40 fell 0.18%.

Germany's retail sales dropped 0.2% in August 2010 compared to the preceding month, the Federal Statistical Office reported on Friday.

Asian stocks rose on Friday as stronger-than expected economic data from China and the United States boosted confidence in the global economic recovery. The key benchmark indices in Indonesia, Japan, Taiwan, South Korea and Singapore rose by between 0.08% to 1.31%. Trading was closed for holidays in Shanghai and Hong Kong.

Japan's deflation moderated and the unemployment rate fell, indicating the nation's recovery remains intact as policy makers consider stimulus measures to support the economy against damage from a strengthening yen.

China's manufacturing expanded at the fastest pace in four months in September, adding to signs that economic growth is stabilizing even as the government curbs energy use and tries to cool the property market. The official purchasing managers' index rose to 53.8 from 51.7 in August.

New US claims for jobless benefits fell last week, a sign of an improving labor market, while Midwest business activity grew more than expected in September. Also, US second-quarter growth was revised a touch higher on firmer consumer spending.

Trading in US index futures indicated that the Dow could gain 30 points at the opening bell on Friday, 1 October 2010.

A key data due later in the global day is the Institute for Supply Management (ISM) report on US manufacturing for September 2010. Strong or a better-than-expected set of figures may boost US stocks today, 1 October 2010. Other key US economic data due today includes August personal income and consumer spending, September consumer sentiment, and construction spending for August.

Back home, bond yields edged higher as food inflation rose. The yield on the benchmark 10-year bond was hovering at 7.91%, compared with Wednesday's (29 September 2010) close of 7.85%. The yield on the second most traded 8.13% 2,022 bond was hovering at 8.05%, compared with Wednesday's (29 September 2010) close of 7.99%. The bond market was closed on Thursday, 30 September 2010, for half-yearly closing of accounts of banks.

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 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 growth of core infrastructure industries slowed to 3.7% in August 2010, as compared to 6.4% in the same month last year, according to data released by the government. These six segments account for 26.7% of the country's total industrial output.

Meanwhile, the Lucknow bench of the Allahabad high court on Thursday, 30 September 2010, ruled that the disputed land in Ayodhya where the Babri Masjid stood for 500 years until it was demolished in 1992 shall be divided into three parts. A two-thirds portion is to be shared by two Hindu plaintiffs and one-third will be given to the Sunni Muslim Waqf Board.

By a 2-1 majority verdict, plaintiffs representing Lord Ram, the Nirmohi Akhara and the Waqf Board were declared joint title-holders of the property. The Bench asserted that the portion under the central dome of the demolished three-dome structure where the idol of Ram Lalla had been kept in a makeshift temple was the birthplace of Lord Rama "as per faith and belief of the Hindus."

The Bench of Justice S.U. Khan, Justice Sudhir Agarwal and Justice D.V. Sharma dismissed the suit filed by the Sunni Waqf Board for possession of the Babri Masjid because it was time-barred. It cited faith as the basis to declare the site the janmasthan of Lord Ram, but ordered a three-way partition on the basis of historical use of the site by Muslims and Hindus.

The Waqf Board said it would file an appeal in the Supreme Court against the judgment. Waqf Board counsel Zafaryab Jilani told a media conference that the All India Muslim Personal Law Board would decide when to file it. The Bench clarified that even though all the three parties are declared to have a one-third share each in the property, minor adjustments could be made -- for which the adversely affected party would be compensated from the adjoining land acquired by the Central Government.

The BSE 30-share Sensex was up 375.92 points or 1.87% to 20,445.04, its highest closing level since 14 January 2008. The Sensex rose 406.35 points at the day's high of 20,475.47 in late trade. The index rose 24.98 points at the day's low of 20094.10 in early trade.

The S&P CNX Nifty was up 113.45 points or 1.88% at 6,143.40, its highest closing level since 14 January 2008. It hit high of 6,153.10 in late trade.

The BSE Mid-Cap index rose 1.6% and the BSE Small-Cap index rose 1.54%. Both these indices underperformed the Sensex.

All the 13 sectoral indices on BSE rose. The BSE Realty index (up 4.03%), Metal index (up 3.87%), Capital Goods index (up 2.69%), IT index (up 2.57%), Auto index (up 2.41%), Consumer Durables index (up 2.25%), and Power index (up 2%), outperformed the Sensex. The Healthcare index jumped 1.87%, matching the Sensex's gains. The BSE PSU index (up 1.86%), banking sector index Bankex (up 1.62%), Oil & Gas index (up 1.5%) and FMCG index (up 0.65%), underperformed the Sensex.

The market breadth was strong. On BSE, 2005 shares advanced while 994 shares declined. A total of 99 shares remained unchanged.

From the 30 share Sensex pack, 27 rose and the rest fell.

The BSE clocked turnover of Rs 5601 crore, higher than Rs 4598.65 crore on Thursday, 30 September 2010.

Index heavyweight Reliance Industries (RIL) rose 2.04%. 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.

Auto stocks were in demand. Commercial vehicle maker Tata Motors jumped 1.96%. The stock hit a record high of Rs 1155.75 today. The company will launch Aria, the first cross-over between a multi-utility and sports utility vehicle of the company on 11 October 2010. It will be made available across all major cities and towns of the country.

The company said on Friday it will raise prices on some passenger and all commercial vehicles from Monday, 4 October 2010, due to rise in input costs. The price increase in passenger cars is on the Tata Indica and the Tata Indigo models in the range of Rs 4,500 to Rs 14,000. The price rise in commercial vehicle is in the range of Rs 5,000 and Rs 40,000.

Tata Motors' total sales, excluding those of the luxury Jaguar, Land Rover brands, increased 23% in September 2010.

Bajaj Auto rose 4.9% as the stock entered the 50-unit S&P CNX Nifty index starting today, 1 October 2010. The stock hit all time high of Rs 1,550 today.

TVS Motor Company surged 2.86%, after the company's total vehicle sales grew 31% to 1,88,005 units in September 2010 over September 2009.

India's largest tractor and utility vehicles maker Mahindra & Mahindra (M&M) rose 2.91% after company on Thursday entered the motorcycle segment with the launch of two models, Stallio and Mojo. The company said on Friday it sold 35,177 vehicles in September 2010, nearly 24% more from a year earlier.

India's top car maker, Maruti Suzuki rose 2.89%. The company said during market hours today that its total vehicle sales rose 29.6% to 1,08,006 units in September 2010 over September 2009. It is a record monthly sale from the car major.

But, India's leading bike maker by sales Hero Honda Motors fell 0.43%.

Realty stocks rose on expectations of pick up in housing sales during the upcoming festive season. Omaxe, HDIL DLF, Ackruti City, Unitech and Indabulls Real Estate rose by between 0.18% to 7.03%.

Metal stocks rose after strong economic data in US and China boosted confidence in the global economic recovery. National Aluminum Company, JSW Steel, Jindal Steel & Power, Hindustan Zinc, Steel Authority of India, Jindal Saw and Sesa Goa rose by between 1.5% to 8.95%.

Copper maker Sterlite Industries jumped 5.13% on reports that the Supreme Court has stayed a lower court order to close Sterlite Industries' copper smelter in south India. The stay order came after the Madras High Court earlier this week ordered the copper smelter to close on safety and worker-health concerns. The stay order is applicable till 18 October 2010. The stock was the top gainer from the Sensex pack.

Consumer durables stocks also rose on expectations of pick up in demand during upcoming festive season. Rajesh Exports, Titan Industries, Blue Star, Gitanjali Gems and Videocon Industries rose by between 1.13% to 5.18%.

India's largest engineering and construction firm by sales Larsen & Toubro rose 2.65%, with the stock gaining for the second straight day. The stock hit 52 week high of Rs 2103.15. The company announced during market hours on Thursday that it won orders worth Rs 700 crore from water & material handling sectors.

India's largest electric equipment maker by sales Bharat Heavy Electricals jumped 4.29%. The stock hit 52 week high of Rs 2603 today.

Among other capital good stocks, ABB, BEML, Punj Lloyd, SKF India, Usha Martin and Praj Industries rose by between 0.51% to 4.6%.

FMCG stocks rose on expectations of pick up in rural demand after bountiful rains this year. ITC, Hindustan Unilever, United Spirits and Marico rose by between 0.42% to 2.3%.

Healthcare stocks also participated in the broad based rally. Sun Pharmaceutical Industries, Cipla, Lupin, Ranbaxy Laboratories and Dr Reddy Laboratories rose by between 0.52% to 2.5%.

IT stocks rose after technology outsourcing and consulting firm Accenture Plc raised its earnings outlook for the new fiscal year and boosted its dividend, defying concerns that a sluggish global economy could hurt sales. India's largest IT exporter by sales Tata Consultancy Services rose 4.08%. 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 rose 2.05%. The stock hit record high of Rs 3109.80 today. India's third largest software services exporter by sales Wipro rose 2.81%.

Banking stocks rose on pick-up in credit offtake in a fast recovering Indian economy. India's largest private sector bank by net profit ICICI Bank rose 2.23%. India's second largest private sector bank by net profit HDFC Bank rose 0.75%.

India's largest commercial bank by net profit and branch network State Bank of India (SBI) rose 0.87%. The stock hit a record high of Rs 3272 today.

Bank of India, Bank of Baroda and Punjab National Bank rose by between 1.22% to 1.58%.

Tirupati Inks settled at Rs 36.65 on BSE, a 14.76% discount to the public offer price of Rs 43 per share. The stock debuted at Rs 53.95 on BSE, a 25.46% premium over the issue price.

Tirupati Inks clocked the highest volume of 6.94 crore shares on BSE. Cals Refineries (2.69 crore shares), IFCI (2.11 crore shares), Edelweiss Capital (2.05 crore shares) and Mahindra Satyam (1.17 crore shares) were the other volume toppers in that order.

Orchid Chemicals clocked the highest turnover of Rs 266.86 crore on BSE. Tirupati Inks (Rs 254.63 crore), IFCI (Rs 140.68 crore), State Bank of India (Rs 130.07 crore) and Tata Motors (Rs 123.14 crore) were the other turnover toppers in that order.