Market rebounds from 3-week low

The market surged last week as investors bought shares after a recent sell-off that was triggered by negative global news like high crude oil prices and Japan crisis. Data showing buying by foreign funds also perked up sentiments. Indian stocks rose in four out of five trading session in the week ended 25 March 2011 with bullish comments on India from billionaire legendary investor Warren Buffett and on hopes for economic reforms, aiding the rally. The government tabled some key reforms bills in parliament. All the 30 Sensex shares rose last week.



The BSE Sensex surged 936.83 points or 5.24% to 18,815.64 in the week ended Friday, 25 March 2011. The S&P CNX Nifty spurted 280.55 points or 5.22% to 5,654.25. The BSE Mid-Cap index rose 3.25% and the BSE Small-Cap index advanced 2.61%. Both these indices underperformed the Sensex.

Foreign funds bought shares worth a net Rs 2008.70 crore in March 2011 (till 23 March 2011). FII outflow in the calendar year 2011 totaled Rs 7389.90 crore (till 23 March 2011).

Billionaire investor and international investment icon Warren Buffett who is in his maiden visit to India said on Tuesday, 22 March 2011, that he hopes to spend some money in India. His firm Berkshire Hathaway is looking to park funds in large investment destinations and India fits the bill perfectly, he said. India, according to him, is not an emerging market but a very big country with a large number of significant businesses. He said that Berkshire Hathaway would look at possible acquisitions in India as and when there were opportunities.

The government introduced a long-awaited pension bill in parliament on Thursday, 24 March 2011, that would pave the way for private players in the sector and help cut government spending. The Pension Regulatory and Development Authority (PFRDA) bill, which would allow part investment of the corpus in the stock market, will take time for parliamentary approval as the current session of parliament ends this week.

The government on Tuesday, 22 March 2011, introduced in parliament the Constitution Amendment Bill to facilitate implementation of Goods and Services Tax (GST). The Bill is likely to be referred to the Parliamentary Standing Committee for scrutiny. The GST seeks to replace multiple indirect taxes, such as the central excise duty and services tax, and state taxes including value added tax, entry tax and purchase tax, with a neat single levy.

Trading for the week began on a weak note. The key benchmark indices settled at 3-week closing low on Monday, 21 March 2011 as higher crude oil prices stoked inflation worries. The BSE 30-share Sensex was down 39.76 points or 0.22% to 17,839.05. The S&P CNX Nifty was down 8.95 points or 0.17% to 5,364.75.

Bargain hunting in index pivotals after three straight days of slide and fall in crude oil prices drove the key benchmark indices higher on Tuesday, 22 March 2011. The government's move to table the banking sector amendment bill and the Constitution Amendment Bill to facilitate implementation of Goods and Services Tax (GST) -- a major indirect tax reform, also aided recovery. The BSE 30-share Sensex was up 149.25 points or 0.84% to 17,988.30. The S&P CNX Nifty was up 49.10 points or 0.92% to 5,413.85.

The key benchmark indices logged decent gains on Wednesday, 23 March 2011, extending Tuesday's advance, on firm global cues. The market sentiment was positive after billionaire investor and international investment icon Warren Buffett on Tuesday, 22 March 2011, said he is looking forward to using the enormous cash pile of flagship firm Berkshire Hathaway to acquire companies in India. The sentiment was also boosted by the government tabling two key reforms bills in parliament on Tuesday, 22 March 2011. The BSE 30-share Sensex was up 217.86 points or 1.21% to 18,206.16. The S&P CNX Nifty was up 66.40 points or 1.23% to 5,480.25.

Sustained buying demand in index pivotals and positive global equities boosted the domestic bourses for the third straight day on Thursday, 24 March 2011. The BSE 30-share Sensex was up 144.58 points or 0.79% to 18,350.74. The S&P CNX Nifty was up 42.15 points or 0.77% to 5,522.40.

Higher world stocks and data showing third day of buying by foreign funds on Thursday, 24 March 2011, perked up sentiments as the key benchmark indices hit 2-month highs on Friday, 25 March 2011. The BSE 30-share Sensex was up 464.90 points or 2.53% to 18,815.64. The S&P CNX Nifty rose 131.85 points or 2.39% to 5,654.25.

India's largest real estate developer by market capitalisation DLF surged 13.15% to Rs 248.60. It was the top Sensex gainer. Realty shares bounced back after a recent sharp correction. DLF had underperformed the market in past one quarter till 24 March 2011, falling 17.39% as against 8.58% decline in the Sensex.

Infrastructure developer Jaiprakash Associates was the second biggest Sensex gainer. The stock galloped 9.78% to Rs 90.35 on government's thrust on infrastructure sector in Union Budget 2011-2012.

India's largest private sector bank by market capitalisation ICICI Bank jumped 8.67% to Rs 1090.85. It was the third biggest Sensex gainer. Banking stocks rose after the government Tuesday, 22 March 2011, sought parliamentary approval to amend a banking law for allowing investors in private banks to have voting rights proportional to their shareholdings, a long-awaited move to help grow the sector. Currently, the voting right of a single individual or entity in private banks is limited to 10%, irrespective of their shareholding. The bill, introduced by Finance Minister Pranab Mukherjee, also sought to raise the cap on investor voting rights in state-run banks to 10% from 1%, and lift the cap on state-run banks' authorised capital.

India's largest power equipment maker by sales Bharat Heavy Electricals (Bhel) advanced 8.51% to Rs 2089.55 after the company during trading hours on Wednesday, 23 March 2011 said it won an order in a consortium with ABB from Indian state-run Power Grid for a power transmission link. The order value for Bhel is Rs 1590 crore, making it the largest order for the company in the power transmission and distribution sector.

Infosys Technologies (up 7.49%), Tata Power Company (up 7%), HDFC (up 6.76%), Bharti Airtel (up 6.67%) and Sterlite Industries (up 6.54%), were the other leading Sensex gainers.

India's largest tractor maker by sales Mahindra & Mahindra (M&M) rose 6.29% to Rs 672.75. After market hours on Wednesday, 23 March 2011, M&M said it will set up a tractor manufacturing unit at its existing facility at Zaheerabad in Medak district of Andhra Pradesh. The company will invest over Rs 300 crore in the plant, which will be spread across 100 acres. The plant will have an installed capacity of 100,000 tractors a year, which can be scaled up to meet additional demand, M&M said in a press release. Production from the unit will begin in 2012.

Index heavyweight Reliance Industries (RIL) advanced 3.31% to Rs 1026.05 as higher crude oil prices will help boost refining margins.