Nifty settles above 5,500

Sustained buying demand in index pivotals and positive global equities boosted the domestic bourses for the third straight day today, 24 March 2011. The BSE 30-share Sensex was up 144.58 points or 0.79%, up 81.42 points from the day's low and off 23.23 points from the day's high. The 50-unit S&P CNX Nifty attained its highest closing level since mid-March 2011 above the psychological 5,500 level. US index futures and European markets were trading firm after initial hiccup while Asian stocks settled higher. The BSE Sensex has jumped 511.69 points or 2.86% in three trading days from 17,839.05 on 21 March 2011.



Recent bullish comments on India from billionaire legendary investor Warren Buffett and hopes for economic reforms have aided the recent surge with the government tabling two key reforms bills in parliament early this week.

Coming back to today's trade, the market breadth was positive. Eleven out of 13 sectoral indices on BSE rose. Metals stocks advanced as metals prices rose on the London Metal Exchange on Wednesday, 23 March 2011. Banking stocks extended recent gains after the government Tuesday, 22 March 2011, tabled banking sector amendment bill in parliament. Software pivotals edged higher on firm ADRs. Auto stocks were mixed. Shares of debutante Lovable Lingerie attracted 22% premium over the initial public offer price on its debut.

Index heavyweight Reliance Industries (RIL) reversed initial gains. Copper and aluminium maker Hindalco Industries rose over 4% as copper futures for May 2011 delivery rallied nearly 3% to $4.43 a pound in the US on Wednesday, 23 March 2011.

The market opened on a firm note aided by positive Asian equities and a fall in crude oil prices. The 50-unit S&P CNX Nifty moved past the psychological 5,500 mark. A bout of volatility was witnessed as the key benchmark indices recovered after paring gains from one-week highs in mid-morning trade. The market held firm in mid-morning trade. The market recovered after paring gains in early afternoon trade. The market pared gains in afternoon trade as rise in food inflation worried investors. The market soon came off lows.

The BSE 30-share Sensex was up 144.58 points or 0.79% to 18,350.74, its best closing since 16 March 2011. The index rose 63.16 points at the day's low of 18,269.32 in afternoon trade. The Sensex gained 167.81 points at the day's high of 18,373.97 in morning trade.

The S&P CNX Nifty was up 42.15 points or 0.77% to 5,522.40, its best closing since 14 March 2011. The Nifty hit an intraday high of 5,529.

The market breadth, indicating the health of the market, was positive. On BSE, 1616 shares advanced while 1304 shares declined. A total of 121 shares remained unchanged. The breadth was much stronger earlier in the day.

The total turnover on BSE amounted to Rs 3006 crore, lower than Rs 4257 crore on Wednesday, 23 March 2011.

The BSE Mid-Cap index rose 0.78% and the BSE Small-Cap index rose 0.67%. Both these indices underperformed the Sensex.

Eleven out of 13-sectoral indices on the BSE logged gains. The BSE Realty (up 2.83%), the BSE Auto (up 1.40%), and the BSE Capital Goods (up 1.27%), outperformed the Sensex. The BSE Oil & Gas (down 0.25%), the BSE Healthcare (down 0.09%), and the BSE FMCG (up 0.33%), underperformed the Sensex.

Among the 30-member Sensex pack, 24 advanced while the rest of them declined.

Index heavyweight Reliance Industries (RIL) fell 0.11% to Rs 1011.55 after oscillating between Rs 1021.40 and Rs 1003.60 during the day. Reportedly a fluid catalytic cracker (FCC) at RIL's old plant could have started product output from Wednesday, 23 March 2011. The FCC unit of about 200,000 barrels per day (bpd) at RIL's older refinery at Jamnagar was shut for maintenance in early February 2011.

GAIL (India) slipped 1.6%. The company after market hours on Thursday, 24 March 2011, said it has set a target of transmitting 118.2 million metric standard cubic metre per day (mmscmd) of natural gas from domestic sources and through LNG route during the year ending March 2012 (FY 2012) under the annual memorandum of understanding signed with Ministry of Petroleum & Natural Gas for performance targets for FY 2012. The excellence in performance target for gas marketing is 85.5 mmscmd. The company will be targeting production of 422 TMT of polymers (HDPE & LLDPE) and 1,350 TMT of liquid hydrocarbons in FY 2012.

Metals stocks rose as LMEX, a gauge of six metals traded on the London Metal Exchange, advanced 2.3% on Wednesday, 23 March 2011. Copper futures for May 2011 delivery rallied nearly 3% to $4.43 a pound in the US on Wednesday, 23 March 2011, copper's highest settlement since 4 March 2011.

India's largest private sector aluminum maker by sales Hindalco Industries jumped 4.38% to Rs 205 and was the top gainer from the Sensex pack.

Sail (up 1.13%), Hindustan Zinc (up 3.51%), Jindal Saw (up 3.30%), and Sterlite Industries (India) (up 1.57%), edged higher. Tata Steel was unchanged at Rs 610.05

Ispat Industries rose 2.52% to Rs 22.35 after JSW Steel hiked the open offer price for Ispat Industries from Rs 20.54 per share to Rs 22.25 per share for the acquisition of 64.72 crore equity shares representing 20% of the fully diluted equity share capital of Ispat Industries. Shares of JSW Steel fell 0.57%.

Banking stocks extended recent gains after the government Tuesday, 22 March 2011, tabled banking sector amendment bill in parliament. India's largest private sector bank by net profit ICICI Bank vaulted 1.20%, extending Wednesday's close to 4% rally after its ADR surged 5.93% on Wednesday, 23 March 2011. India's second largest private sector bank by net profit HDFC Bank gained 1.34%.

India's largest bank by branch network and net profit State Bank of India (SBI) rose 0.05%. The parliament had approved the SBI Amendment Bill on Wednesday, 23 March 2011 which is likely to pave way for the bank to expand its capital base and make the process of merger of the subsidiary banks with itself smoother.

India's largest power equipment maker by sales Bharat Heavy Electricals (Bhel) advanced 2.74%. The stock gained 2.43% on Wednesday, 23 March 2011 after the company during trading hours that day 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.

India's largest power utility firm by capacity NTPC rose 0.29%. The company's unit 6 of 500 megawatt of Farakka Super thermal power station has been commissioned on 23 March 2011. With this, the total capacity of NTPC group has become 33,694 megawatt, NTPC said after trading hours on Wednesday.

India's largest tractor maker by sales Mahindra & Mahindra (M&M) rose 2.98%. 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.

Other auto stocks were mixed. India's largest car maker by sales Maruti Suzuki India lost 0.67% to Rs 1167.80, extending recent fall on concerns the company's imports from Japan may get affected after the devastating earthquake and tsunami hit Japan on 11 March 2011, causing radiation leaks from Japan's Fukushima nuclear power plant. It was the top loser from the Sensex pack.

India's top truck maker by sales Tata Motors rose 1.65% after its ADR jumped 2.36% on Wednesday, 23 March 2011. India's largest bike maker by sales Hero Honda Motors rose 1.88% while India's second largest bike maker by sales Bajaj Auto slipped 0.30%.

Software pivotals edged higher on firm ADRs. India's second largest software exporter by sales Infosys Technologies rose 0.38% after its ADR advanced 2.54% on Wednesday, 23 March 2011. India's third largest software exporter by sales Wipro gained 0.68% after its ADR rose 2.04% on Wednesday, 23 March 2011. India's largest software exporter by sales TCS surged 2.62%

Interest rate sensitive realty shares gained for the second day after State Bank of India (SBI) chairman OP Bhatt reportedly ruled out any hike by the bank in short term interest rates recently. Majority of property and auto deals are driven by finance. HDIL (up 2.47%), Orbit Corporation (up 4.14%), Indiabulls Real Estate (up 4.06%), Parsvnath Developers (up 6.22%), and DB Realty (up 1.88) edged higher. DLF slipped 0.28%.

Realty firm Unitech jumped 9.07% after the company said on Wednesday it has sold over 300 units worth Rs 200 crore in its mid-income housing project Unitech South Park project in Gurgaon which was launched last week.

Crest Animation Studios jumped 13.54% after the company said its first computer generated imagery animated 3D stereoscopic film -- Alpha & Omega has crossed gross collections of $50 million.

Shares of Lovable Lingerie settled at Rs 249.20 on BSE, a 21.56% premium over the initial public offer price of 205. The stock debuted at Rs 261.50, a 27.56% premium over the initial public offer (IPO) price. The stock hit a high of Rs 278.95 and low of Rs 241.40 during the day.

Lovable Lingerie was the top traded counter on the BSE with turnover of Rs 447.50 crore followed by Fineotex Chemicals (Rs 235.74 crore), Acropetal Technologies (Rs 85.81 crore), Unitech (Rs 55.37 crore), and State Bank of India (Rs 51.27 crore) were the other turnover toppers in that order.

Cals Refineries clocked highest volume of 2.61 crore shares on BSE. Lovable Lingerie (1.72 crore shares), Unitech (1.39 shares), Fineotex Chemicals (1.06 crore shares) and Acropetal Technologies (1 crore shares), were the other volume toppers in that order.

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 legendary investor would be meeting Prime Minister Manmohan Singh and insurance sector regulator Irda's Chairman J Harinarayan among others later this week.

The near term major trigger for the market is Q4 March 2011 results. Advance tax payments made by top 100 firms based in the country's financial capital --Mumbai reportedly rose by 25% in the Q4 March 2011 over Q4 March 2010, hinting robust earnings. Companies pay advance tax every quarter based on their projected income for the year.

The government introduced a long-awaited pension bill in parliament on Thursday 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, 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.

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.

The Lok Sabha on Tuesday, 22 March 2011, passed the Finance Bill 2011. A boycott by the Bharatiya Janata Party (BJP)-led National Democratic Alliance (NDA) on Tuesday helped the United Progressive Alliance (UPA) government pass the Finance Bill quickly in the Lok Sabha.

Inflation pressures in India still persist, the deputy governor of the Reserve Bank of India, Subir Gokarn, told a television channel in an interview on Thursday.

Food price index rose 10.05% and the fuel price index climbed 12.79% in the year to 12 March 2011, government data on Thursday showed. In the previous week, annual food and fuel inflation stood at 9.42% and 12.79% respectively. The primary articles price index was up 13.53%, compared with an annual rise of 12.31% a week earlier.

US crude futures were up 51 cents a barrel or 0.48% to $106.26 a barrel. Oil prices have surged in recent months amid ongoing turmoil in Libya and other parts of the Middle East. High global crude oil price is a cause of concern for India which imports 70% of its oil requirements. Surging oil prices have stoked concerns about higher inflation and interest rates.

European markets advanced on Thursday, 24 March 2011, as retail, resource and chemical stocks gained on upbeat corporate news. The key benchmark indices in UK, Germany and France were up by between rose 0.61% to 0.84%.

Portugal's parliament late Wednesday rejected Prime Minister Jose Socrates's plan to impose further austerity on the debt-laden country. The plan included additional spending cuts and tax hikes aimed at avoiding a European Union bailout. Socrates resigned after the vote.

Asian markets were trading firm on Thursday, 24 March 2011, with investors tracking cues from overnight gains on Wall Street. The gains were also supported by higher commodity prices. The key benchmark indices in Singapore, South Korea, Taiwan, Indonesia and Hong Kong rose by between 0.37% and 1.36%. Japan's Nikkei 225 slipped 0.15% and China's Shanghai Composite slipped 0.06%.

US stocks rose in relatively light volume Wednesday, 23 March 2011, led by materials companies, though a bank-dividend disappointment and worries over several overseas trouble spots kept investor sentiment in check. The Dow Jones Industrial Average rose 67.39 points, or 0.56%, to 12086.02. The Standard & Poor's 500-stock index rose 3.77 points, or 0.29%, to 1297.54 and the Nasdaq Composite rose 14.43 points, or 0.54%, to 2698.30.

New US single-family home sales fell to a record low in February and prices were the lowest since December 2003. Sales tumbled 16.9% to a seasonally adjusted 250,000 unit annual rate, the lowest since records began in 1963, after an upwardly revised 301,000-unit pace in January.

Trading in US index futures indicated that the Dow could rise 44 points at the opening bell on Thursday, 24 March 2011.

Back home, the Reserve Bank of India (RBI) raised key interest rates at a mid-quarter policy review on Thursday, 17 March 2011 and the central bank said it will continue with its anti-inflationary stance. The central bank also warned that continuing uncertainty about energy and commodity prices may vitiate the investment climate, posing a threat to the current economic growth trajectory