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Thursday, June 03, 2010
Bulls march on global cues; Sensex above 17000
Today's major news
Godrej Consumer Products on an acquisition spree; the stock rises 1.86%
Food inflation rises to 16.55%
United Phosphorus buys Mancozeb biz from Dupont; the stock closes 1.14% higher.
Click here for more stories
Global signals
European stocks rose to two-week high on Thursday as investors confidence in the global economy improved after strong US data and the Markit Euro zone Services Purchasing Managers' Index showed the services sector was expanding in May and the Final Services Employment Index showed its first jobs growth since June 2008. FTSE 100 was trading at 1.71% higher.
All the major Asian indices closed positive except Shanghai Composite that closed lower by 0.73%. SGX Nifty closed 89 points higher.
The US stock index futures signal strong opening on the Wall Street on Thursday. Investors awaited the monthly ADP employment report, the weekly jobless claims and the factory orders for April as well as the US ISM non-manufacturing index.
Indian indices
Bulls, which gathered strength in last hour of trading in the previous session, carried the same momentum in today’s session. The indices posted gains for the sixth time in seven days. The market surged almost 2% on the back of strong global indices. Positive US housing data for April 2010 and robust services sector data in India for May 2010 enhanced market sentiments.
Following the strong global cues, the Sensex opened 44 points higher at 17786. The indices widened its gain, with the Sensex recapturing its psychological levels of 17000 and the Nifty 5100 levels. European markets were buoyant at the opening, which shrugged off the rising inflation (food inflation rose to 16.55% for week ended May 22, 2010 from 16.23% previous week) worries back home. In afternoon session, the Sensex touched the day’s high of 17073 as strong buying was seen in banking, telecom and oil & gas stocks. The Sensex in a joyful way finished the session above 17000, at 17022, up 280 points. The Nifty also managed to settle above 5100, at 5110, 91 points higher.
Market sentiment
The market breadth was strong as advancing stocks outpaced trailing stocks twice. Of the 2,949 stocks traded on the BSE, 1,905 stocks advanced, whereas 931 stocks declined. Hundred and thirteen stocks remained unchanged.
Sectoral & stock screening
With the bulls charging ahead all along the day, it was all green on the sector indices front. BSE Bankex topped the chart with gains of 1.99% followed by the BSE TECk that rose 1.89% and the BSE Oil & Gas surged 1.71%.
Among 'A' group stocks, Union Bank of India surged the most by 8.49%, followed by Hindustan Construction Company that gained 7.59% and Tech Mahindra that jumped 6.79%. On the losers’ list, Shree Renuka Sugars lost the most, down 2.12%, followed by Jain Irrigation that slid by 2.10% and KSK Energy that fell 1.44%.
Viewing volumes
India's second largest listed cellular services provider by sales - Reliance Communications saw highest trading with over 0.82 crore shares changing hands on the BSE, followed by industrial finance company - IFCI (0.78 crore shares), Anil Dhirubhai Ambani Group firm - Reliance Natural Resources (0.65 crore shares), Birla group firm - Idea Cellular (0.47 crore shares) and wind turbine major-Suzlon Energy (0.46 crore share).
BSE Bulk Deals to Watch - June 3 2010
Deal Date Scrip Code Company Client Name Deal Type * Quantity Price **
3/6/2010 532975 Aishwarya Tele APARNA NARAYAN B 222752 28.42
3/6/2010 532975 Aishwarya Tele SUNKAVALLI GITARANI S 150000 28.52
3/6/2010 531179 Arman Fin Serv AMRITA SINGH B 36495 22.52
3/6/2010 531179 Arman Fin Serv KIRITKUMAR VRAJRATAN PARIKH S 30000 22.66
3/6/2010 531591 Bampsl Sec PRAKASHCHAND GUPTA S 868248 1.36
3/6/2010 533026 Chemcel Bio SUNIL MALOO AND SONS HUF B 186000 8.01
3/6/2010 533026 Chemcel Bio LUCAS MEYER INDUSTRIES PRIVATE LIMITED S 186000 8.03
3/6/2010 530755 Coral News SAROJ DOGRA B 28700 7.80
3/6/2010 530755 Coral News BALWANT SINGH BISHT S 30000 7.80
3/6/2010 512361 Cupid Trades SHAMANJWALI PVT LTD S 15000 54.10
3/6/2010 532768 FIEM Inds PRIMORE SOLUTIONS PVT.LTD B 90100 139.14
3/6/2010 532768 FIEM Inds PRIMORE SOLUTIONS PVT.LTD S 91687 139.17
3/6/2010 532521 Four Soft TRANSGLOBAL SECURITIES LTD. B 210894 27.89
3/6/2010 532521 Four Soft TRANSGLOBAL SECURITIES LTD. S 210894 27.93
3/6/2010 533189 Goenka Diamond SAHAR VYAPAR PRIVATE LIMITED B 625000 102.94
3/6/2010 533189 Goenka Diamond SAHAR VYAPAR PRIVATE LIMITED S 606235 92.66
3/6/2010 533189 Goenka Diamond AJAY AGARWAL S 275000 103.50
3/6/2010 508918 Greycells Edu INDIA MAX INVESTMENT FUND LIMITED S 31713 39.10
3/6/2010 511682 IFL Promoters J A FINANCIAL AND MANAGEMENT CONSULTANTS PVT LTD B 18610 15.90
3/6/2010 509162 Indag Rubber HASINA KASAMBHAI SHEKH B 64521 103.00
3/6/2010 509162 Indag Rubber HASINA KASAMBHAI SHEKH S 64521 107.25
3/6/2010 509162 Indag Rubber KHEMKA AVIATION PVT LTD S 46000 105.28
3/6/2010 530255 KAY Power BAMPSL SECURITIES LTD B 54095 14.78
3/6/2010 530255 KAY Power PRAKASHCHAND GUPTA B 112397 15.26
3/6/2010 530255 KAY Power SUNIL KUMAR GUPTA S 92800 15.15
3/6/2010 531453 Mohit Inds HITESH SHASHIKANT JHAVERI B 37878 37.60
3/6/2010 531453 Mohit Inds GITABHAI NIRANJAN S 25000 37.60
3/6/2010 512097 Oregon Comm AMUL GAGABHAI DESAI B 5132 344.32
3/6/2010 512097 Oregon Comm BHARAT A PANCHAL B 5000 349.49
3/6/2010 512097 Oregon Comm DHIRENKUMAR DHARAMDAS AGARWAL B 5200 349.21
3/6/2010 531118 Pacific Cotspin BHAVIK KOTHARI B 161855 4.11
3/6/2010 531118 Pacific Cotspin PRATAP RAI B KAMDAR HUF S 160000 4.11
3/6/2010 524808 Phyto Chem KIRAN MATTUPALLI B 30000 8.55
3/6/2010 511016 Premier Cap PROMETHEUS E SERVICES PRIVATE LIMITED B 10000 68.47
3/6/2010 511016 Premier Cap YUKTI INVESTMENT PRIVATE LIMITED S 10200 68.60
3/6/2010 530047 Rai Saheb Rekh BADJATE STOCK BROKING PVT.LTD. B 29046 92.00
3/6/2010 530047 Rai Saheb Rekh ANUJ SHANTILAL BADJATE S 29046 92.00
3/6/2010 590077 Ranklin Sol BALA RAMA VENKATA SIVA NAGA S S 48147 81.47
3/6/2010 500365 Remi Metals STRESSED ASSETS STABILIZATION FUND B 1000000 21.00
3/6/2010 500365 Remi Metals INTERNATIONAL SYNTHFABS P LTD S 1000000 21.00
3/6/2010 526753 Roselabs Inds YASHMAN VYAPAR PVT LTD B 120000 69.00
3/6/2010 512359 Rotam Comm NILESH RASIKLAL PANDYA B 50000 94.02
3/6/2010 512359 Rotam Comm BHARAT A PANCHAL S 7000 94.09
3/6/2010 512359 Rotam Comm KAPILABEN RASIKLAL PANDYA S 10000 94.01
3/6/2010 512359 Rotam Comm DHIRENKUMAR DHARAMDAS AGARWAL S 7500 94.00
3/6/2010 526843 Seax Global MRUNAL AGENCY & FINANCE PVT. LTD. B 115431 43.95
3/6/2010 526843 Seax Global MRUNAL AGENCY & FINANCE PVT. LTD. S 98394 44.02
3/6/2010 526843 Seax Global SHIRAJ K S 95000 43.96
3/6/2010 531645 Southern Ispat OMPARKASH GUPTA B 70668 16.09
3/6/2010 531645 Southern Ispat KANTA GUPTA B 98289 16.27
3/6/2010 531645 Southern Ispat HANUMAN GUPTA B 75101 16.33
3/6/2010 531645 Southern Ispat KANTA GUPTA S 85990 16.10
3/6/2010 531645 Southern Ispat OMPARKASH GUPTA S 84040 16.23
3/6/2010 531373 Suave Hotels LATIF UMMED ALI KHAN B 87614 36.18
3/6/2010 526133 Supertex Inds SHEETAL DHAVAL SHAH S 500000 2.81
3/6/2010 519457 Virat Crane GIRISH GULATI S 62234 8.48
3/6/2010 531249 Well Pack Papers SANTOSH VISHRAM GHADSHI S 483355 38.74
3/6/2010 531396 Women Networks MODERN FORGE (P) LIMITED B 30000 34.25
3/6/2010 531396 Women Networks RADIANT FINANCIAL SERVICES LIMITED B 31200 32.73
3/6/2010 531396 Women Networks SANJU KABRA B 56065 32.18
3/6/2010 531396 Women Networks SANJU KABRA S 58065 33.44
3/6/2010 531396 Women Networks KANTA CHHAJER S 70000 32.64
2/6/2010 530495 Chhattisgarh Inds GREENEX CHEMICALS PVT LTD S 509400 7.15
* B - Buy, S - Sell
NSE Bulk Deals to Watch - June 3 2010
Date,Symbol,Security Name,Client Name,Buy/Sell,Quantity Traded,Trade Price / Wght. Avg. Price,Remarks
03-JUN-2010,EVERESTIND,Everest Industries Limite,RELIANCE CAP ASSET MGT LTD,BUY,85595,224.88,-
03-JUN-2010,FCH,Future Capital Holdings L,BUSINESSMATCH SERVICES IND PVT,BUY,500000,160.00,-
03-JUN-2010,FIEMIND,Fiem Industries Limited,PRIMORE SOLUTIONS PVT.LTD,BUY,107968,139.16,-
03-JUN-2010,FIEMIND,Fiem Industries Limited,RAJYOG SHARE AND STOCK BROKERS,BUY,66591,141.21,-
03-JUN-2010,FOURSOFT,Four Soft Limited,TRANSGLOBAL SECURITIES LTD.,BUY,217992,27.82,-
03-JUN-2010,TARAPUR,Tarapur Transformers Ltd,RAINDROP FINANCIAL SERVICES PVT LTD,BUY,142544,39.93,-
03-JUN-2010,AFL,Accel Frontline Limited,SAR AUTO PRODUCTS LIMITED,SELL,145000,66.60,-
03-JUN-2010,FCH,Future Capital Holdings L,SAIN SAMEER SUSHIL,SELL,503000,160.00,-
03-JUN-2010,FCSSOFT,FCS Software Solutions Li,KUMAR DALIP,SELL,5000000,3.55,-
03-JUN-2010,FIEMIND,Fiem Industries Limited,PRIMORE SOLUTIONS PVT.LTD,SELL,107718,141.71,-
03-JUN-2010,FIEMIND,Fiem Industries Limited,RAJYOG SHARE AND STOCK BROKERS,SELL,68483,138.61,-
03-JUN-2010,FOURSOFT,Four Soft Limited,TRANSGLOBAL SECURITIES LTD.,SELL,217992,27.79,-
03-JUN-2010,INDOTECH,Indo Tech Transformers Li,KHURANA PRAKASH CHAND,SELL,70109,252.40,-
03-JUN-2010,TARAPUR,Tarapur Transformers Ltd,RAINDROP FINANCIAL SERVICES PVT LTD,SELL,142544,39.78,-
Asian stocks end on firm note
Bearing China, most regional benchmarks record strong gains
Asian stocks added impressive gains today, as upbeat cues from overnight US markets and ideas global economy is still maintaining its recovery helped spurt the sentiments for the regional benchmarks. Commodity prices rallied in the initial trades, with the dollar giving up its gains earlier in the week. Bullish investors took comfort after a report said that pending home sales in the U.S. climbed 6% in April- hitting six-month high and clocking gains well ahead of estimates.
The Dow Jones industrial average put in one of its biggest one-day gains this year in New York, finishing nearly 226 points, or 2.3 percent, higher. Dow Jones Futures are in green, up 18 points, after the index shot up by more than 2% yesterday, indicating a very stubborn support around 10000 levels. Risk taking investors are playing their cards yet gain, with most of the risky asset classes seafaring in the positive territory. The recent housing data provides assurance that the U.S. economy is improving and that's boosting investor sentiment. Apart from the yesterday's upbeat pending home sales data, the markets are also eying fact that the housing starts in US has shot up to the highest level since 2008.
The Australian stock market jumped more than 2 percent on a positive lead from Wall Street. The ASX 200 gained 105 points, or 2.3 percent, to close at 4,486 with the biggest gainers being banks and financials, followed by mining companies.
Japanese markets also put in a very impressive performance. The Nikkei 225 index more than recouped losses from the previous day after the Japanese Prime Minister, Yukio Hatoyama, resigned. The Nikkei had dropped 1.1 percent amid the political mayhem in Tokyo the previous day. Sentiment in Japan was further helped by the fact that the yen continued to weaken; testing its two-week lows against the US dollar.
However, the Chinese shares fell sharply, as profit taking in the late afternoon trading dragged down earlier gains led by software and heathcare shares. The Shanghai Composite Index closed at 2,552.66 points, down 18.77 points, or 0.73 percent from the previous close. Market participants are keenly watching the 2600 point levels to hold for the benchmark index on a closing basis The Shenzhen Component Index ended at 10,118.04 points, down 70.10 points, or 0.69 percent, from the previous close.
In other markets, Straits Times index in Singapore added 2.42% while the Hang Seng index in Hong Kong rose 1.62% and the Taiex in Taiwan jumped 2.30%.
In Mumbai, buoyed by a strong close on Wall Street overnight on the back of encouraging data on housing and services sector growth, stocks traded firm right through the and recorded its sixth gain in seven trading sessions. The Sensex ended the day at 17,022.33 with a strong gain of 280.49 points or 1.68%.
In commodities, crude oil rose feverishly, testing highs above $74 as markets eyed the drop in US crude inventories and the strong demand outlook for near term as US summer driving season enters into its peak.
Sensex vaults 6.2% in 7 days as world stocks rise
The key benchmark index surged as strong US housing data and positive services sector data in India for May 2010 boosted risk appetite. The barometer index BSE Sensex reclaimed the psychological 17,000 level as the market gained for the sixth time in seven days. The BSE 30-share Sensex rose 280.40 points or 1.68%, off close to 50 points from the day's high and up close to 235 points from the day's low.
The Sensex has jumped 999.85 points or 6.2% from recent low of 16,022.48 on 25 May 2010. It is off 5.2% from a recent peak of 17,970.02 on 7 April 2010. The barometer index has lost 2.5% in calendar 2010 so far after jumping 81% in 2009.
Coming back to today's trade, shares of India's second largest listed cellular services provider by sales Reliance Communications (RCom) surged for the second day in a row on reports the company was considering a merger with South Africa's MTN or roping in a strategic foreign investor to fund its foray into 3G services. Realty, banking, IT, auto and metal stocks rose. All the sectoral indices on BSE were in positive zone. The market breadth was strong.
NSE's volatility index India VIX, a gauge of traders' perception of near-term risks in the market based on options prices, dropped 8.9% to 25.29. The index had declined 4.54% to 27.76 on Wednesday, 2 June 2010, a day after surging 9.16% to 29.08 on Tuesday, 1 June 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 opened on a firm note tracking gains in Asian stocks. The Sensex moved past the psychological 17,000 level in morning trade. The market extended gains later. The market pared gains after hitting fresh intraday highs in early afternoon trade. The market once again pared gains in mid-afternoon trade after hitting a fresh intraday high. The market moved in a range during the last one hour of trade.
Business activity remained strong for India's vast services sector in May 2010, with a key gauge growing for a 13th consecutive month, though some momentum was lost over the previous month. The HSBC-Markit Business Activity Index stood at 58.2 in May 2010 from a 21-month high of 62.1 in April 2010. A reading above 50 indicates expansion. Services make up about 55% of India's $1.2 trillion economy.
Another data showed that the food articles index rose 16.55% in the year to 22 May 2010, accelerating from previous week's rise of 16.23%. The primary articles index, which also includes food articles, rose 16.89%, higher than previous week's 15.90% rise. The fuel price index increased to 14.14 % versus 12.08% rise in the previous week.
European stocks rose to fresh two week highs as investor confidence in the global economy improved after strong US data. Key indices in UK, France and Germany rose by 1.72% to 2.25%.
Asian stock markets chalked up healthy gains on Thursday, following a rally on Wall Street which saw the Dow surge more than 200 points on Wednesday. The key benchmark indices in Hong Kong, Indonesia, Japan, South Korea, Singapore and Taiwan rose by between 1.62% to 3.24%. But, China's Shanghai Composite fell 0.73%.
Trading in US index futures indicated that the Dow could gain 30 points at the opening bell on Thursday, 3 June 2010.
US stocks rallied on Wednesday as investors rushed back into beaten-down shares, led by energy, which bore the brunt of the sell-off a day earlier. The Dow Jones Industrial Average gained 225.52 points, or 2.25% to 10,249.54. The Standard & Poor's 500 Index rose 27.67 points, or 2.58% to 1,098.38. The Nasdaq Composite Index climbed 58.74 points or 2.64% to 2,281.07.
Investors were encouraged by data showing pending sales of previously owned homes increased to a six-month high in April 2010.
Back home, Prime Minister Manmohan Singh highlighted 12 major areas of his intended priority on Tuesday, 1 June 2010, while releasing the first anniversary report of the UPA-II government at a function in New Delhi. These include relations with neighbours, economic resurgence, internal security, education, health, child rights, food security, empowerment of women, weaker sections and minorities and rural renewal. He added that the economy is expected to grow at 8.5% in the current financial year ending March 2011.
The Prime Minister identified price rise as one of the major problems faced by his government but assured to monitor the situation and take necessary corrective measures to rein in inflation. Singh said India must withdraw fiscal stimulus to boost economic growth and reduce deficit in a calibrated manner.
The Reserve Bank of India on Tuesday said inflation remained higher than its comfort level, signalling that the bank could raise interest rates further.
HSBC Markit Purchasing Managers' Index (PMI), based on a survey of 500 Indian firms, surged to a 27-month high of 59 in May 2010 from 57.2 in April 2010, bolstered by steady growth in output, new orders and employment. The rate of growth had slowed in March 2010 and April 2010.
India's economy grew at 8.6% in the March 2010 quarter driven by robust manufacturing sector on the back of government and consumer spending, data released by the government on Monday, 31 May 2010, showed. The growth was significantly higher than the revised 6.5% expansion in Q3 December 2009 and a 5.8% growth in Q4 March 2009. The manufacturing sector grew 16.3%, farm output rose 0.7%, mining sector expanded 14% and services increased by 8.4% in January-March 2010 quarter from a year earlier.
For the full year to March 2010, the economy expanded 7.4%, above a government forecast of 7.2%. Economic growth had slowed down to 6.7% in year ended March 2009.
The RBI expects India's economy to expand 8% in the year ending March 2011 (FY 2011) with an upward bias, assuming a normal monsoon this year and sustenance of good performance of the industrial and services sectors on the back of rising domestic and external demand. The RBI at its annual policy review on 20 April 2010 said it will continue to monitor macroeconomic conditions, particularly the price situation closely and take further action as warranted.
China, India, Brazil and Russia are powering ahead, the Organisation for Economic Cooperation and Development (OECD) said on 26 May 2010, revising upwards its growth outlook for all four largest emerging economies. The OECD revised India's GDP growth forecast for 2010 to 8.2% from its earlier estimate of 7.3%. It also raised the growth forecast for 2011 to 8.5% from its earlier estimate of 7.6%. The OECD also said that underlying inflationary pressures are likely to persist given the strong outlook for demand.
In its World Economic Outlook in April 2010, the International Monetary Fund (IMF) pegged India's GDP growth forecast at 8.75% in calendar 2010 and 8.5% in calendar 2011. IMF's optimism was based on expectations of strengthening of domestic demand as the labour market improves. Expectations of increase in investment on the back of strong corporate profitability, rising business confidence and favourable financing conditions, were other factors cited by IMF for its prediction of strong growth in India's economy.
Meanwhile, a revenue bounty for the government from the sale of telecom spectrum would help bring down fiscal deficit in the current financial year.
The advance of the south west monsoon rains has been temporarily halted by a cyclonic depression in the Arabian Sea. Monsoon has covered Kerala and Tamil Nadu, but not moved beyond due to a cyclonic depression, according to agency reports. The weather office expects monsoon rains to advance to Karnataka later this weekend, by when the cyclone would weaken. The June-September monsoon rains hit Kerala on 31 May 2010, a day ahead of schedule. The south-west monsoon usually covers the entire country by mid-July.
The weather office late April 2010 said rainfall is likely to be 98% of the long-term average. Good monsoon rains would help raise farm output, boost rural incomes and lower food inflation.
Last month, Australia's weather bureau said the El Nino weather pattern was over. El Nino is caused by an abnormal warming of the eastern Pacific Ocean and can play havoc with weather patterns across the Asia-Pacific region.
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 quantum of rainfall in the crucial sowing month of July and distribution of rainfall during the monsoon season also holds key.
On the corporate front, the combined net profit of a total of 3,467 companies rose 14.20% to Rs 87,255 crore on 24.70% rise in sales to Rs 9,26,465 crore in the quarter ended March 2010 over the quarter ended March 2009.
The BSE 30-share Sensex rose 280.40 points or 1.68% to 17,022.33. The Sensex rose 330.79 points at the day's high of 17,072.63 in mid-afternoon trade. It rose 44.44 points at the day's low of 16,786.28 in early trade.
The S&P CNX Nifty gained 90.65 points or 1.81% to 5,110.50.
The BSE Mid-Cap index rose 1.1% and the BSE Small-Cap index rose 1.15%. Both these indices underperformed the Sensex.
All the sectoral indices on the BSE rose. Banking sector index Bankex (up 1.99%), Teck index (up 1.89%), Oil & Gas index (up 1.71%) and IT index (up 1.69%) outperformed the Sensex. BSE Healthcare index (up 0.17%), Consumer Durables index (up 0.47%), PSU index (up 1.25%), Metal index (up 1.34%), Realty index (up 1.38%), Power index (up 1.38%), FMCG index (up 1.42%), Auto index (up 1.51%) and Capital Goods index (up 1.6%) underperformed the Sensex.
The market breadth, indicating the overall health of the market, was strong. On BSE, 1907 shares advanced as compared with 950 that declined. A total of 94 shares were unchanged.
The BSE clocked turnover of Rs 3737 crore, a tad higher than Rs 3728.13 crore on Wednesday, 2 June 2010.
All the shares from the 30 shares Sensex pack rose.
Index heavyweight Reliance Industries (RIL) rose 1.9% to Rs 1031.15. The stock came off the day's high of Rs 1038.40. RIL is reportedly likely to make its first big-ticket investment in coal-fired power plants after getting freed recently from its non-compete agreement with the Anil Dhirubhai Ambani Group (ADAG) that barred it from investing in high-growth sectors.
Shares of oil exploration firms rose as oil prices firmed after data showed pending US home sales rose, boosting optimism about recovery in the world's biggest economy. India's biggest state-run oil exploration firm by revenue Oil & Natural Gas Corporation (ONGC) rose 2.4%. Cairn India rose 0.36%. India's second biggest oil and gas exploration firm by revenue, Oil India, rose 2.9%. Rise in crude oil prices would result in higher realizations from crude sales for oil exploration firms.
Shares of India's second largest listed cellular services provider by sales Reliance Communications (RCom) rose 6.37% on reports the company was considering a merger with South Africa's MTN group or roping in a strategic foreign investor to fund its foray into 3G services. The stock was the top gainer from the Sensex pack.
The stock had jumped 11.02% on Wednesday on reports United Arab Emirates-based Emirates Telecommunications Corporation (Etisalat) is in advanced talks to buy a 25% stake in Reliance Communications (RCom) for Rs 18,000 crore.
RCom later clarified on Wednesday that it has been receiving various proposals from time to time from reputed international telecom companies expressing interest in acquiring a strategic equity stake in RCom. The company evaluates such proposals in line with the company's policy to constantly endeavor to enhance overall shareholder value, RCom said. The company will comply with all its obligations including timely disclosures at the appropriate time, RCom added.
India's largest listed cellular services provider by sales Bharti Airtel rose 1.22%, extending Wednesday's 5.16% gains. India's third largest listed cellular services provider by sales Idea Cellular Services gained 4.49%, extending Wednesday's 8.97% jump.
Realty stocks gained on fresh buying. Unitech, Ackruti City, DLF, HDIL, Ackruti City, Indiabulls Real Estate, Phoenix Mills rose by between 0.13% to 3.37%.
Metal shares rose on bargain hunting after recent steep slide. Hindustan Zinc, Hindalco Industries, Steel Authority of India, JSW Steel, Tata Steel, Jindal Saw and Sesa Goa rose by between 0.35% to 3.3%.
Sterlite Industries rose 2.51% after its ADR gained 6.02% on Wednesday, 2 June 2010.
Banking stocks rose on pick up in credit offtake. Bank credit to businesses and individuals has seen a pick-up of around Rs 5,600 crore while deposits with banks have fallen by nearly Rs 5,000 crore during the fortnight ended 21 May 2010. India's largest bank in terms of branch network State Bank of India rose 1.22%, with the stock gaining for the second straight day. India's largest private sector bank by sales ICICI Bank rose 1.14% to Rs 852.75, with the stock gaining for the second straight day. But, the stock came off the day's high of Rs 858.90. Its ADR rose 3.72% on Wednesday, 2 June 2010.
India's second largest private sector bank by sales HDFC Bank rose 2.76%. Its ADR rose 3.48% on Wednesday, 2 June 2010.
Bank of Baroda jumped 3.52% to Rs 737.60. The stock hit a record high of Rs 748. Punbaj National Bank and Bank of India rose by 1.65% and 1.37% respectively.
IT stocks rose on positive economic data in the US, which is the biggest market for Indian IT firms. India's second largest software services exporter by sales Infosys rose 2%, with the stock gaining for the second straight day. Its ADR rose 3.36% on Wednesday, 2 June 2010. India's largest software services exporter by sales TCS rose 1.16%, with the stock gaining for the second straight day. India's third largest software services exporter by sales Wipro rose 0.84%. Its ADR rose 2.61% on Wednesday, 2 June 2010.
Auto stocks extended recent gains triggered by strong sales in May 2010. India's largest tractor maker by sales Mahindra & Mahindra (M&M) gained 1.49%, with the stock surging for the second straight day as auto sales rose 69% to 28,486 units in May 2010 over May 2009.
India's largest small car maker by sales Maruti Suzuki India rose 1.5%, with the stock gaining for the third straight day after total sales rose 27.90% to 1,02,175 units in May 2010 over May 2009. The company's domestic sales rose 27.2% to 90,041 units in May 2010 over May 2009. This is highest ever monthly domestic sales. Exports increased 33.5% to 12,134 units in May 2010 over May 2009. The company announced the sales figures during trading hours on 1 June 2010.
India's top truck maker by sales Tata Motors advanced 3.06%, with the stock gaining for the second straight day after reporting 41% growth in vehicle sales in May 2010 over May 2009. Its ADR gained 4.67% on Wednesday, 2 June 2010. The company sold 56,779 units in May 2010 as against 40,196 units sold in May 2009. The company unveiled the monthly sales data after trading hours on Tuesday, 1 June 2010.
India's largest bike maker by sales Hero Honda Motors rose 0.32% after gaining 3.28% on Wednesday on reports the company has raised prices of its products by up to Rs 1,000 with immediate effect due to rising input costs.
Shares of auto part makers jumped after auto sales zoomed in May 2010. Bharat Forge, Bharat Seats, Clutch Auto, Exide Industries, Sona Koyo Steering rose by between 0.92% to 3.89%.
Auto companies reported strong sales in May 2010 and the industry expects consumer demand to sustain following the overall economic expansion.
Cement stocks rose after logging healthy monthly sales growth in May 2010. Jaiprakash Associates rose 1.84% after gaining 2.09% on Wednesday. Cement dispatches jumped 63% to 1.3 million tonnes in May 2010 over May 2009.
ACC rose 1.98%, extending near 1% gains on Wednesday. The company recently said it is setting up a mega cement project of 3 million tonnes per annum at Ghughus in the Chandrapur district of Maharashtra at a cost of about Rs 1500 crore.
UltraTech Cement rose 0.78% after gaining 3.52% on Wednesday. Aditya Birla Group's cement shipments rose 5.5% to 3.3 million tonnes in May 2010 over May 2009. Production rose 5.6% to 3.4 million tonnes. The group has decided to combine its cement operations under UltraTech Cement. The process is expected to be completed by July 2010.
Ambuja Cements advanced 3.86% after gaining 2.99% on Wednesday as cement shipments rose 13.7% to 1.86 million tonnes in May 2010 over May 2009.
Infrastructure stocks gained on fresh buying. Larsen & Toubro, Nagarjuna Construction Company, Hindustan Construction Company and IVRCL Infrastructure rose by between 1.9% to 7.59%.
India's largest power utility firm Reliance Infrastructure rose 1.39%, after gaining 4.03% on Wednesday on reports the company has bagged a project worth Rs 2,960 crore for six-laning the Delhi-Agra highway from the National Highways Authority of India.
FMCG stocks rose on bargain hunting. United Spirits, Dabur India, ITC, Hindustan Unilever rose by between 0.13% to 4.02%.
India's largest power producer by sales, NTPC, rose 2.08% on reports the company is set to acquire controlling interest in a 720-million-tonne coal field in Australia in a deal valued at $1-1.5 billion, which will enable it to fire about 3,500 megawatts (mw) of power capacity.
Cals Refineries clocked the highest volume of 3.44 crore shares on BSE. FCS Software (1.54 crore shares), Reliance Communications (82.40 lakh shares), IFCI (78.39 lakh shares) and Reliance Natural Resources (65.54 lakh shares) were the other volume toppers in that order.
Sesa Goa clocked the highest turnover of Rs 142.49 crore on BSE. Reliance Communications (Rs 135.50 crore), Tata Steel (Rs 119.01 crore), Havells India (Rs 98.38 crore) and State Bank of India (Rs 83.70 crore) were the other turnover toppers in that order.
Grey Market Premiums - June 3 2010
| Company Name | Offer Price (Rs.) | Premium (Rs.) |
| Standard Chartered PLC | 104 | Discount |
| Fatpipe Networks India Ltd. | 82 to 85 | 2.50 to 3 |
Crude gains marginally
Strong housing data improves sentiment
Crude oil prices ended higher at Nymex on Wednesday, 02 June 2010. Strong US economic data and higher US stocks helped dissipate demand concerns for the time being and pushed prices higher. The weekly inventory report by energy department is scheduled to be reported tomorrow, a day later, due to Memorial Day Holiday on last Monday.
On Wednesday, crude-oil futures for light sweet crude for July delivery closed at $72.86/barrel (higher by $0.28 or 0.4%). Last week, crude gained 5.6%.
For the month of May, crude shed 14%. It was the biggest monthly drop for crude since December 2008. For the month of April, crude rose 2.8%. For the first quarter of this year, crude rose by 5.5%. Year to date, crude is higher by 3.5%.
In the currency market on Wednesday, the dollar stayed relatively strong for almost the entire day but the dollar index ended the day with a 0.2% loss.
Among economic reports for the day, the National Association of Realtors reported that pending home sales index rose 6% in April after an upwardly revised 7.1% increase in March. The pending sales index is at the highest level since October, just before a previous tax credit expired. The index is up 22% compared with April 2009. Buyers rushed to sign sales contracts on previously owned homes in US in April before a tax subsidy expired. The report gave US equities a major boost today.
Among other energy products on Wednesday, gasoline for July delivery added 4 cents, or 2.2%, to $2.02 per gallon.
Natural gas for July delivery added 18 cents, or 4.1%, to settle at $4.42 per million British thermal units.
Crude ended FY 2009 higher by 78%, the highest yearly gain since 1999. It reached a high of $82 earlier in October 2009 and hit a low of $33.98 on 12 February 2009. Crude prices had ended FY 2008 lower by 54%, the largest yearly loss since trading began at Nymex.
At the MCX, crude oil for June delivery closed lower by Rs 31 (0.89%) at Rs 3,456/barrel. Natural gas for June delivery closed at Rs 206.6, higher by Rs 4.3 (2.1%).
Precious metals turn pale
Strong dollar and higher US stocks pushed bullion metal prices lower
Precious metal prices ended substantially lower on Wednesday, 02 June 2010 at Comex. Stronger dollar and higher US stocks pushed back bullion metal prices.
Generally, a stronger dollar pressures demand for dollar-denominated commodities, such as crude oil and gold, which become more expensive for holders of other currencies and also vice versa.
On Wednesday, gold for August delivery ended at $1,222.6 an ounce, lower by $4.3 (0.4%) an ounce on the New York Mercantile Exchange. Prices dropped by almost 1% during intra day trading. Prices had touched an all time high of $1,249.7 on 14 May 2010. Gold for June delivery had settled above $1,200 in early December 2009, only to pull back to $1,172 area and dip as much as the $1,050 vicinity in early February 2010.
Last week, gold ended higher by 3.3%. Gold ended May higher by 3%. For the month of April, gold ended higher by 6%. For the first quarter of this year, gold rose by 1.7%, its sixth quarterly rise. On a year to date basis, gold is higher by 11.3%.
On Wednesday, July Comex silver futures ended lower by 23.6 cents (1.3%) at $18.315 an ounce. Last week, silver ended higher by 4.3%. For May, silver shed 1.1%. For the month of April, silver ended higher by 4.1%. For the first quarter of this year, silver rose by 3%. On a year to date basis, silver is higher by 5.4%.
In the currency market on Wednesday, the dollar stayed relatively strong for almost the entire day but the dollar index ended the day with a 0.2% loss.
Among economic reports for the day, the National Association of Realtors reported that pending home sales index rose 6% in April after an upwardly revised 7.1% increase in March. The pending sales index is at the highest level since October, just before a previous tax credit expired. The index is up 22% compared with April 2009. Buyers rushed to sign sales contracts on previously owned homes in US in April before a tax subsidy expired. The report gave US equities a major boost today.
Gold had ended FY 2009 higher by 24%. Silver futures had ended 2009 up 50%. The dollar index had lost 4.2% against its counterparts last year.
Last year, after hitting a low at $807.30 per ounce on 15 January 2009, gold futures rallied almost 51% to hit an all-time high at $1217.40 per ounce during early December of 2009 but fell from those levels at the end. Silver futures had hit a low at $10.42 on 15 January 2009 and hit a high at $19.30 per ounce on 2 December 2009. Like gold, silver also ended lower than its all time high level.
At the MCX, gold prices for August delivery closed lower by Rs 79 (0.42%) at Rs 18,637 per ten grams. Prices rose to a high of Rs 18,850 per 10 grams and fell to a low of Rs 18,610 per 10 grams during the day's trading.
At the MCX, silver prices for July delivery closed Rs 372 (1.25%) lower at Rs 29,231/Kg. Prices opened at Rs 29,597/kg and fell to a low of Rs 29,083/Kg during the day's trading.
Daily News Roundup - June 3 2010
RCOM to give up strategic stake to fund 3G foray. (ET)
NTPC is set to acquire controlling interest in a 720mn tone coal field in Australia in a deal valued at US$1-1.5bn, which will enable it to fire about 3,500MW of power capacity. (ET)
RIL revives plan to build a multi-billion-dollar chemical plant. (ET)
Sun Pharma rejects Guggenheim Partners’ US$215mn offer for Taro stake. (ET)
SASOL, the largest producer of motor fuel made from coal, plans to spend US$10bn in India in partnership with Tata Group on a block awarded last year. (ET)
RIL’s hunt for more hydrocarbons on India's East coast could slow as the company's drilling programme in the region is facing delays due to ‘unresolved mechanical' issue in the rig hired from Transocean. (BL)
Tata Motors inaugurated its Nano manufacturing plant at Sanand in Gujarat. (BS)
Ranbaxy is recalling all unused stock of one batch of its drug Gabapentin from the UK. (ET)
THE oil & gas sector regulator has asked Gail Gas to refrain from setting-up gas filling stations at places it has not yet approved. (ET)
MMTC, National Fertilisers and RCF are the latest companies to join the Government divestment list. (ET)
GMR Energy has raised Rs3.5bn from IDFC Group for a minority stake. (ET)
The Hinduja Group plans to raise nearly US$1bn by an IPO of its lubricant arm Petromin in Saudi Arabia this year. (ET)
JSW Steel to raise about Rs21bn through an issue of warrants to promoters on a preferential basis to help cut debt. (ET)
Aditya Birla Minacs, the BPO arm of the Aditya Birla Group, has acquired the US-based Bureau of Collections Recovery. (ET)
FMCG major Godrej Consumer Products has acquired Argentinian hair care company Argencos. (ET)
CERC has approved PowerGrid Corporation’s plan to set up nine High Capacity Power Transmission Corridors costing Rs581bn. (BS)
GTL is believed to be in talks with Reliance Infratel, the telecom tower arm of RCom, for a strategic partnership. (BS)
Ashok Leyland and Nissan, who have joined hands for manufacturing light commercial vehicles (LCV), are planning to roll out their first product by mid-2011. (BS)
Punjab Tractors is increasing production capacity of its ‘Swaraj' brand of tractors by 30% this fiscal. (BL)
Shree Renuka Sugars is negotiating a 25-28% reduction in the acquisition price for its proposed Equipav buyout. (ET)
Infotech Enterprises has signed a long-term master service agreement with Norway’s drilling and well services company Seawell AS to provide engineering support services. (BS)
The pan-India bid for Broadband Wireless Access (BWA) spectrum touched Rs 86bn on Wednesday translating into revenues of Rs258bn for Government from the sale of three slots. (ET)
The Union Finance Ministry plans to define any equity placement prior to an IPO as promoter shareholding for the purpose of calculating minimum public float. (BS)
According to chief Statistician Pronab Sen, India’s economy might accelerate to 9% in Q1 on strong consumer demand. (BS)
According to data released by the RBI, bank credit went up by Rs24bn to Rs 32,302bn at the end of May 14, a yoy increase of 18%. (BS)
India’s food processing sector, which was growing at about 6% four years ago, is now expanding at nearly 15% annually, as per the Union Minister of State for food processing industries. (ET)
India’s fifth ultra mega power plant will be set up at Chhattisgarh. (ET)
Technology research firm Forrester has raised the growth forecast for Global IT Spend to an extremely healthy 9.3%. (BS)
Think global, act local!
Let bravery be thy choice, but not bravado. – Menander.
The global cues this morning suggest more green on your screen. With the US market rallying and Asian markets on a firm footing, the good times should last at least for the day. Wild intra-day gyrations are a given; we do not rule out a trend reversal if there is fresh bad news from overseas markets. Stay light and nimble so that you are ready to respond to any change in sentiment.
To say that we live in volatile and uncertain times would be an understatement. And, this applies to most asset classes, except may be for gold, dollar and bonds. After a freak fall on Tuesday, we managed to bounce back, thanks to a late bull charge. The NSE Nifty ended above 200 DMA and also surpassed the 5000 mark.
For the long-term India bulls, any fall is a good chance to buy in limited quantity. Fundamentals remain healthy. Fund flows though erratic may well improve in the coming months. In the near-term, monsoon may have some bearing on sentiment though India's GDP grew pretty well in FY10 despite bad rains. Overall trend will hinge more on external developments.
The Nifty is likely to face resistance at 5080-5100 and even beyond these levels. A sustain stay above 5100 could see it touching 5200 and even 5300, provided global cues remain supportive and monsoon starts off well. Talking of rains, the west coast is staring at a cyclonic storm 'Phet' and may cause some disruption in the monsoon current. Some days back, we had a storm on the east cost. For the record, monsoon has already reached Kerala. We have to see how it develops and progresses to other parts of the country in the next few days and weeks. All we can do right now is to keep our fingers crossed.
Globally, the immediate event to watch out for is Friday's monthly jobs report in the US. Overall, data points coming from the world's largest economy suggest continuing recovery which should stand the world markets in good stead in the future. However, the euro-zone debt crisis, a softening Chinese economy and political instability in Japan are some of the factors that could keep a lid on stock market gains. One also has to keep a constant eye on the euro-dollar rate as it has assumed significant importance due to the euro-zone's fiscal stress.
FIIs were net sellers of Rs1.66bn in the cash segment on Wednesday on a provisional basis, according to the NSE data. The local institutions were net buyers at Rs1.65bn on the same day. In the F&O segment, the foreign funds were net buyers of Rs12.33bn. On Tuesday, FIIs were net sellers at Rs4.73bn in the cash segment, as per SEBI data. Mutual Funds were net sellers at Rs133mn on the same day.
US stocks ended higher on Wednesday, as the energy sector recovered from the previous day's heavy losses and investors welcomed reports on housing and auto sectors.
After losing 234.97 points, or 2.3%, during the past two trading days, the Dow Jones Industrial Average rose 225.5 points, or 2.3%, to end at 10,249.54. The S&P 500 index added 28 points, or 2.6%, to close at 2,281.07 and the Nasdaq Composite rallied 59 points, or 2.6%, to finish at 1,098.38.
More than five stocks gained for each issue on the decline on the New York Stock Exchange.
The euro rose against the dollar to $1.2241, bouncing back from the four-year low touched the day before. The dollar edged lower against the British pound and rose more than 1% versus the Japanese yen.
US light crude oil for July delivery turned higher, climbing 28 cents to settle at $72.86 a barrel.
COMEX gold's August contract dropped $4.30 to settle at $1,222.60 per ounce.
Treasury prices were lower, pushing the benchmark 10-year note's up to 3.34% from 3.26% late on Tuesday.
Energy was the best performer among the 10 industry groups in the S&P 500, as shares of companies involved in the BP spill in the Gulf of Mexico reversed course after a rout the prior day. After a double-digit drop on Tuesday, shares of Halliburton Co., which provided oil-field services to BP, closed up 12%.
All of the Oil and Natural Gas Index's 24 components posted gains, while the Amex Oil Index added 3%, with all 12 of its components also rising.
On Tuesday, energy shares had declined - with BP plunging 15% - after the company's latest attempt to plug the oil spill in the Gulf of Mexico failed and Attorney General Eric Holder said there would be a criminal investigation of the spill.
Transocean, the operator of the Deepwater Horizon rig that exploded in the Gulf, was an exception, falling more than 3% after dropping 12% on Tuesday.
Technology shares also advanced on Wednesday.
In the day's economic news, the National Association of Realtors said that its pending home sales index, a measure of sales contracts for existing homes, rose 6% in April after climbing 5.3% in March. The jump beat the 4.3% increase economists had expected.
Outplacement firm Challenger, Gray and Christmas said that American employers announced plans to cut 38,810 jobs in May, a 1.3% rise from April's four-year low. However, job cuts were 65% lower than the same month in 2009.
Detroit automobile makers reported a jump in US sales in May. Ford Motor Co., General Motors (GM) and Chrysler all reported double-digit sales rises versus the same month last year. GM reported a 32% gain in sales and Ford reported a 23% increase. Toyota Motor's sales rose 7%.
Ford shares rose about 4% while Toyota slipped nearly 1%.
The Financial Crisis Inquiry Commission held the latest in a series of hearings on the role of ratings agencies in the market collapse of 2008-09. Legendary investor and CEO of Berkshire Hathaway Warren Buffett was among the witnesses. Several representatives of ratings agency Moody's were also present.
Across the Atlantic, European shares ended more or less flat as losses in the commodity space eased in the wake of stronger-than-expected US housing data. The Stoxx Europe 600 index finished virtually unchanged at 245.40 after having tallied mild gains on both Monday and Tuesday.
London's commodity-heavy FTSE 100 index fell 0.2% to close at 5,151.32. Meanwhile, the French CAC-40 index shed 1.58 points to close at 3,501.50 and the German DAX index also ended static, at 5,981.20.
Shares of BP, which had fallen more than 2% at one point, ended the day just 0.1% lower after a steep plunge on Tuesday.
Shares of Prudential Plc fell 2.5%. The company said it was withdrawing from an agreement to acquire AIA Group, the Asian life insurance unit of American International Group (AIG). Backing away will cost Prudential about 450 million pounds, the UK insurer said.
Shares of Portugal Telecom rose 1.5% to 8.59 euros. Telefonica, which saw its shares rise 0.8%, has lifted its bid for 50% of the shares in joint venture Brasilcel, the Brazilian wireless carrier known as Vivo, that it doesn't own by 14%, to a total of 6.5 billion euros ($8 billion), according to shareholder Portugal Telecom. That price would nearly equate to Portugal Telecom's market capitalization: 7.7 billion euros.
After losing over a ton on Tuesday, mostly due to a freak trade in Reliance Industries, the bulls found some relief towards the fag end of the trading session.
The NSE Nifty struggled for direction and was stuck in a narrow trading band of 4980-5000 throughout the day. However, the bulls took control of the situation in late afternoon, with the Nifty managing to surge past its 200 DMA.
Better than expected monthly sales figures kept the auto stocks buzzing. Telecom stocks too were ringing aloud as heavyweights like Bharti Airtel and Reliance Communications bounced back sharply.
The BSE 30-share Sensex surged 170 points to end at 16,741 and the NSE Nifty advanced 50 points to close at 5,019.
Markets in Asia ended in mixed; the Nikkei in Japan fell by 1.2%, Australia's S&P/ASX slipped by 0.7% and while the Hang Seng index in Hong Kong edged lower by 0.2%.
European indices recouped from day’s low, however continue to trade with losses. The DAX in Germany was down 0.8%, the CAC 40 index in France was down 1.2% and the FTSE in the UK was down 1%.
All the BSE sectoral indices ended in the positive terrain, BSE Teck index was the top gainer, the index was up 2%, followed by BSE Auto index was up 1.8% and BSE Realty index was up 1.4%. Even the BSE Mid-Cap index ended higher by 0.8% and the Small-Cap index edged higher by 0.8%.
Outside the frontline indices, the big gainers in the broader market were Pantaloon, Fortis, Tech M and Renuka Sugars. On the other hand, losers included REI Agro, Cadila Health, Indian Hotels and Tata Chemicals.
Gap-up opening seen; Inflation nos eyed
Headlines for the day:
GTL eyes RCom in tower tango
Renuka Sugars seals revised Equipav deal, for lower price
Sun Pharmaceutical turns down Taro's offer
Events for the day:
Major corporate action
Weekly inflation to be announced today
Ex-date for dividend of Indiabulls Financial and Indiabulls Securities
For more events, log on to Sharekhan.com
Pre-market report
Global signals
The European stock markets bounced back from early lows Wednesday following a strong showing on Wall Street where investors cheered upbeat US housing data.
The US stocks rallied on Wednesday as investors rushed back into beaten-down shares, led by energy, which bore the brunt of the sell-off a day earlier.
In today's trade, the Asian markets were trading higher, except Shanghai Composite that was trading lower by 0.22%. SGX Nifty was trading 56 points higher.
Indian Indices
After a strong comeback yesterday where the Nifty closed above its significant level of 5000, today the domestic markets are expected to open strong with a positive bias following its global peers (with Europe being an exception). The US stocks recorded heavy gains yesterday with all the major indices clocking gains of over 2.5% each. After a day of heavy sell-off on Tuesday, the investors in the US responded to the better-than-expected economic data, which increased investors confidence and rebounce in the energy stocks. However, going into the session, the inflation announcement may keep the market volatile.
Talking about the foreign institutional investors (FIIs), they have been the net buyers over the last few days in the Indian equities as the data that were announced recently about the upbeat gross domestic product (GDP), strong auto sales numbers and cement despatches for the month of May and signs of cooling of the fiscal deficit front were quite encouraging. Secondly, the emerging markets threw better growth opportunities and with the sustained tensions in the developed economies of the Europe and the US, investment in the emerging economies were more attractive for the FIIs over a longer period. Though concerns over the Euro zone causing the risk aversion for the global investors and weakening the sentiments, may continue playing a spoil sport for the markets for a while.
With the governments review of the oil prices round the corner, the oil and gas stocks will be in the focus over the next few sessions.
Commodity cues
In the commodity space, the crude oil prices erased losses Wednesday as stocks turned higher, led by a jump in energy shares, with the Nymex light crude oil for the July series rose by $0.28 per barrel, whereas in the metals space, the Comex Gold for the July series down by $4.20 to a troy ounce and the Comex Silver for the July series was declined by $0.24 to a troy ounce.
Daily trend of FII/MF investment in equities
On June 02, 2010, the FIIs were the net sellers of the Indian stocks to the tune of Rs472.80 crore, whereas the domestic mutual funds, on June 01, 2010, were the net sellers of the stocks to the tune of Rs13.30 crore.
Market may surge on strong global cues; food inflation data eyed
The market may extend Wednesday (2 June 2010)'s 1% gains on strong global cues. Trading in S&P CNX Nifty index futures on the Singapore stock exchange indicated that the Nifty could rise 53 points at the opening bell. The government will unveil data on some wholesale price indices for the year through 22 May 2010 viz. the food price index, the primary articles index and the fuel price index at about 12:00 IST today.
In a stock specific news, India's largest power producer by sales NTPC, is reportedly set to acquire controlling interest in a 720-million-tonne coal field in Australia in a deal valued at $1-1.5 billion, which will enable it to fire about 3,500 megawatts (mw) of power capacity.
Asian stock markets chalked up healthy gains on Thursday, following a rally on Wall Street which saw the Dow surge more than 200 points on Wednesday. The key benchmark indices in Hong Kong, Indonesia, Japan, South Korea, Singapore and Taiwan rose by between 1.31% to 2.63%. But, China's Shanghai Composite fell 0.11%.
US stocks rallied on Wednesday as investors rushed back into beaten-down shares, led by energy, which bore the brunt of the sell-off a day earlier. The Dow Jones Industrial Average gained 225.52 points, or 2.25% to 10,249.54. The Standard & Poor's 500 Index rose 27.67 points, or 2.58% to 1,098.38. The Nasdaq Composite Index climbed 58.74 points or 2.64% to 2,281.07.
Investors also were encouraged by data showing pending sales of previously owned homes increased to a six-month high in April 2010.
Back home, Prime Minister Manmohan Singh highlighted 12 major areas of his intended priority on Tuesday, 1 June 2010, while releasing the first anniversary report of the UPA-II government at a function in New Delhi. These include relations with neighbours, economic resurgence, internal security, education, health, child rights, food security, empowerment of women, weaker sections and minorities and rural renewal. He added that the economy is expected to grow at 8.5% in the current financial year ending March 2011.
The Prime Minister identified price rise as one of the major problems faced by his government but assured to monitor the situation and take necessary corrective measures to rein in inflation. Singh said India must withdraw fiscal stimulus to boost economic growth and reduce deficit in a calibrated manner.
The Reserve Bank of India on Tuesday said inflation remained higher than its comfort level, signalling that the bank could raise interest rates further.
HSBC Markit Purchasing Managers' Index (PMI), based on a survey of 500 Indian firms, surged to a 27-month high of 59 in May 2010 from 57.2 in April 2010, bolstered by steady growth in output, new orders and employment. The rate of growth had slowed in March 2010 and April 2010.
India's economy grew at 8.6% in the March 2010 quarter driven by robust manufacturing sector on the back of government and consumer spending, data released by the government on Monday, 31 May 2010, showed. The growth was significantly higher than the revised 6.5% expansion in Q3 December 2009 and a 5.8% growth in Q4 March 2009. The manufacturing sector grew 16.3%, farm output rose 0.7%, mining sector expanded 14% and services increased by 8.4% in January-March 2010 quarter from a year earlier.
For the full year to March 2010, the economy expanded 7.4%, above a government forecast of 7.2%. Economic growth had slowed down to 6.7% in year ended March 2009.
The RBI expects India's economy to expand 8% in the year ending March 2011 (FY 2011) with an upward bias, assuming a normal monsoon this year and sustenance of good performance of the industrial and services sectors on the back of rising domestic and external demand. The RBI at its annual policy review on 20 April 2010 said it will continue to monitor macroeconomic conditions, particularly the price situation closely and take further action as warranted.
China, India, Brazil and Russia are powering ahead, the Organisation for Economic Cooperation and Development (OECD) said on 26 May 2010, revising upwards its growth outlook for all four largest emerging economies. The OECD revised India's GDP growth forecast for 2010 to 8.2% from its earlier estimate of 7.3%. It also raised the growth forecast for 2011 to 8.5% from its earlier estimate of 7.6%. The OECD also said that underlying inflationary pressures are likely to persist given the strong outlook for demand.
In its World Economic Outlook in April 2010, the International Monetary Fund (IMF) pegged India's GDP growth forecast at 8.75% in calendar 2010 and 8.5% in calendar 2011. IMF's optimism was based on expectations of strengthening of domestic demand as the labour market improves. Expectations of increase in investment on the back of strong corporate profitability, rising business confidence and favourable financing conditions, were other factors cited by IMF for its prediction of strong growth in India's economy.
Meanwhile, a revenue bounty for the government from the sale of telecom spectrum would help bring down fiscal deficit in the current financial year.
The advance of the south west monsoon rains has been temporarily halted by a cyclonic depression in the Arabian Sea. Monsoon has covered Kerala and Tamil Nadu, but not moved beyond due to a cyclonic depression, according to agency reports. The weather office expects monsoon rains to advance to Karnataka later this weekend, by when the cyclone would weaken. The June-September monsoon rains hit Kerala on 31 May 2010, a day ahead of schedule. The south-west monsoon usually covers the entire country by mid-July.
The weather office late April 2010 said rainfall is likely to be 98% of the long-term average. Good monsoon rains would help raise farm output, boost rural incomes and lower food inflation.
Last month, Australia's weather bureau said the El Nino weather pattern was over. El Nino is caused by an abnormal warming of the eastern Pacific Ocean and can play havoc with weather patterns across the Asia-Pacific region.
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 quantum of rainfall in the crucial sowing month of July and distribution of rainfall during the monsoon season also holds key.
On the corporate front, the combined net profit of a total of 3,454 companies rose 14.20% to Rs 87,247 crore on 24.70% rise in sales to Rs 9,26,193 crore in the quarter ended March 2010 over the quarter ended March 2009.
Healthy auto and cement sales in May 2010 and buzz of strategic stake sale in Reliance Communications (RCom) helped domestic bourses shrug off weak global stocks on Wednesday, 2 June 2010. The BSE 30-share Sensex rose 169.81 points or 1.02% to 16,741.84 on Wednesday.
As per provisional figures on NSE, foreign funds sold shares worth Rs 166.50 crore and domestic funds bought shares worth Rs 165.16 crore on Wednesday.
Foreign funds sold shares worth a net Rs 692.99 crore in the first two trading sessions this month, as per data from the stock exchanges. Domestic funds have bought stocks worth a net Rs 375.78 crore in the first two days this month.
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