Realty, banking shares lead rebound

Expectations of decent to strong Q4 March 2011 earnings triggered a recovery on the domestic bourses after Tuesday's (15 March 2011) 1.47% slide, following reports companies across sectors have paid significantly higher tax in Q4 March 2011 compared with the year-ago period. But, the market came off the day's high as European markets reversed initial gains. The BSE 30-share Sensex was up 191.05 points or 1.05% to 18,358.69, off 85.78 points from the day's high and up 95.01 points from the day's low. Indian stocks have risen in two out of the last three trading sessions. Asian shares rose today, 16 March 2011, led by recovery in battered Japanese stocks.



The market breadth was strong as side counters rallied. All the 13 sectoral indices on BSE logging gains. Interest rate sensitive banking and realty stocks rose as fears of aggressive monetary tightening by the central bank eased a day ahead of a mid-quarter monetary policy review by the central bank of India. Auto and software stocks were in demand on fresh buying after recent fall. Reliance Anil Dhirubhai Ambani (ADA) group rose on renewed buying. Index heavyweight Reliance Industries (RIL) gained on reports of higher advance tax payment in Q4 March 2011 whereas FMCG giant Hindustan Lever fell on lower advance tax payment. Cement stocks rose on reports that the rebuilding of Japan will require large amounts of basic materials such as cement.

The market opened on a firm note on reports companies across sectors have paid significantly higher tax in Q4 March 2011 compared with the year-ago period. The market extended gains in morning trade. The Sensex came off highs later. Firmness prevailed in mid-morning trade. The market struck a fresh intraday high in early afternoon trade. The market hovered near the day's high in afternoon trade. The market pared gains in choppy mid-afternoon trade.

The BSE 30-share Sensex was up 191.05 points or 1.05% to 18,358.69. The Sensex rose 276.83 points to 18,444.47 in mid-afternoon trade. The Sensex rose 96.04 points at the day's low of 18,263.68 in early trade.

The S&P CNX Nifty was up 61.50 points or 1.13% to 5,511.15 after gyrating between 5,535.10 and 5,475.95 so far during the day.

The market breadth, indicating the health of the market, was strong. On BSE, 1821 shares advanced while 1106 shares declined. A total of 95 shares remained unchanged.

The total turnover on BSE amounted to Rs 3328 crore, lower than Tuesday's Rs 3658 crore.

The BSE Mid-Cap index rose 1.37% and the BSE Small-Cap index gained 1.26%. Both the indices outperformed the Sensex.

All the 13 sectoral indices on the BSE logged gains. The BSE Realty (up 2.47%), the Bankex (up 2.15%), and the BSE Consumer Durables (up 1.90%), outperformed the Sensex. The BSE Oil & Gas (up 0.67%), the BSE FMCG (up 0.21%), and the BSE Metal (up 0.75%), underperformed the Sensex.

Among the 30-member Sensex pack, 24 gained while the rest of them declined. Hindalco (down 0.51%), Cipla (down 0.37%), and Hero Honda Motors (down 0.37%), edged lower from the Sensex pack.

Index heavyweight Reliance Industries (RIL) rose 0.79% to Rs 1044.50. The stock came off day's the day's high of Rs 1054.50. The company reportedly paid 37% higher tax at Rs 1054 crore in Q4 March 2011 over Q4 March 2010.

Anil Dhirubhai Ambani (ADA) group shares rose on renewed buying. Reliance Capital was up 1.33%, extending two-day 10.72% surge. The company during trading hours on Monday, 14 March 2011 said Nippon Life Insurance has signed a pact to acquire a 26% stake in its life insurance venture -- Reliance Life Insurance (RLIL). Nippon Life Insurance will invest an aggregate value of Rs 3062 crore ($680 million) to acquire a 26% strategic stake in Reliance Life Insurance (RLIL). This transaction pegs the total valuation of RLIL at approximately Rs 11500 crore ($2.6 billion).

India's second largest listed cellular services provider by sales Reliance Communications rose 1.68%, extending two-day 4.82% gain. RCom last week said it will save over Rs 500 crore in annual interest cost after securing aggregate financing of Rs 8700 crore from a Chinese bank.

Power utility major Reliance Infrastructure surged 4.82% to Rs 643.20 and was the top gainer from the Sensex pack.

Cement stocks rose on reports that the rebuilding of quake-hit Japan will require large amounts of basic materials such as cement. ACC (up 1.55%), Ambuja Cements (up 3.63%), UltraTech Cememt (up 0.64%), India Cement (up 2.28%), J K Lakshmi Cement (up 2.14%), Mysore Cement (up 7.56%), and Shree Cement (up 1.27%), edged higher.

India's largest listed telecom operator by sales Bharti Airtel surged 2.26%. The company on Monday, 14 March 2011, announced the launch of its 'airtel broadband TV', which will allow its broadband users to watch live TV on their computers for a monthly rental of Rs 99.

Software shares firmed on renewed buying. India's largest software services firm TCS rose 3.02%. The company during market hours on Tuesday, 15 March 2011, said it has bagged a multi-million dollar IT infrastructure deal from Dutch technical consultancy firm Royal Haskoning.

India's third largest software services firm Wipro advanced 1.18%. India's second largest software services firm Infosys was unchanged at Rs 3030.

Interest rate sensitive banking stocks rose as fears of aggressive monetary tightening by the central bank eased, with crude trading off recent 29-month highs. India's largest private sector bank by net profit ICICI Bank shot up 3.34% after advance tax payment reportedly rose 35% to Rs 475 crore in Q4 March 2011 over Q4 March 2010.

India's largest bank by net profit and branch network State Bank of India advanced 3.49%. SBI's advance tax payment reportedly dropped to Rs 1500 crore in in Q4 March 2011 from Rs 1900 crore in Q4 March 2010.

India's second largest private sector bank by net profit HDFC Bank was unchanged at Rs 2185.50 after reporting 80% surge in advance tax payment to Rs 540 crore in Q4 March 2011 over Q4 March 2010.

India's largest mortgage lender by total income HDFC was down 0.22%. Reportedly the firm has paid higher advance tax at Rs 340 crore in Q4 March 2011 as against Rs 280 crore in Q4 March 2010.

Canara Bank vaulted 3.85% to Rs 683 after the state-run bank raised Rs 1933.20 crore by allotting 3.3 crore equity shares to qualified institutional buyers at Rs 604 per share.

Central Bank of India spurted 7.81% ahead of the record date for the proposed rights issue which is priced at Rs 103 per share, a 39.81% discount to the ruling market price.

India's largest private sector steel maker by sales Tata Steel rose 0.64% after the company reportedly paid 92% higher tax at Rs 987 crore in Q4 March 2011 over Q4 March 2010.

Auto stocks were in demand on fresh buying after recent fall. India's top truck maker by sales Tata Motors rose 1.88% despite the company's advance tax outgo reportedly declining to Rs 50 crore in Q4 March 2011 from Rs 115 crore in Q4 March 2010. The company's global vehicle sales rose 14% to 1.02 lakh units in February 2011 over February 2010. Sales of Tata Motors' British brands Jaguar and Land Rover rose 26% to 21,653 units in February 2011 over February 2010, driven by a 33% rise in Land Rover sales.

India's largest carmaker by sales Maruti Suzuki India rose 1.11%, with the stock recovering from Tuesday's 3.55% decline triggered by concerns nuclear accident in Japan that followed a powerful earthquake and tsunami may hurt Maruti's imports from Japan. Maruti Suzuki has substantial imports of raw materials from its Japanese parent Suzuki Motor.

India's second largest bike maker by sales Bajaj Auto rose 0.57% after advance tax payment reportedly surged 43% to Rs 250 crore.

India's largest tractor and utility vehicles maker by sales Mahindra & Mahindra (M&M) edged up 2.55% after advance tax payout rose 30% to Rs 307 crore. On Tuesday, 15 February 2011, M&M recently announced completion of all formalities related to the acquisition of a majority stake in South Korea's SsangYong Motor Company (SYMC).

Interest rate sensitive realty stocks rose as fears of aggressive monetary tightening by the central bank eased, with crude trading off recent 29-month highs. D B Realty (up 1.40%), HDIL (up 1.94%), Ackruti City (up 1.84%), Indiabulls Real Estate (up 1.69%), and Unitech (up 4.07%), gained.

Parsvnath Developers spurted 7.22%, extending Tuesday's 10.41% surge, on reports the company is close to selling stake in its Parsvnath City project in Sonepat at Haryana for Rs 100-150 crore.

India's largest real estate developer by sales DLF gained 2.67% after Tuesday's 3.15% decline.

India's top FMCG firm by sales Hindustan Unilever fell 1.33% to Rs 270.85 after the company reportedly paid lower tax at Rs 150 crore in Q4 March 2011 as against Rs 170 in crore Q4 March 2010. It was the top loser from the Sensex pack.

Coal India rose 1.25% on reports the company may increase coal prices again by August 2011. Coal India had hiked coal prices from the midnight of 27 February 2011. The company, however, did not disclose the quantum of coal price hike but said the price hike will boost company's revenue by about Rs 650 crore for the year ending March 2011 (FY 2011). The hike would boost Coal India's revenue by about Rs 6,200 crore for the year ending March 2012, it had said.

EIH jumped 7.01% on reports cigarette maker ITC and Mukesh Ambani-controlled Reliance Group have subscribed to the entire entitlement of EIH's rights issue, which was concluded on Tuesday, 15 March 2011.

Voltas surged 4.22% after the company said it plans to penetrate the market with a varied set of 70 air conditioners this season. The company made this announcement after market hours on Tuesday, 15 March 2011.

Tata Coffee was the top traded counter on the BSE with turnover of Rs 181.42 crore followed by Fineotex Chemicals (Rs 179.01 crore), VIP Industries (Rs 123.99 crore), BF Utilities (Rs 108.08 crore), and State Bank of India (Rs 101.63 crore).

Cals Refineries clocked highest volume of 1.87 crore shares on BSE. Fineotex Chemical (1.06 crore shares), Sudar Garments (81.18 lakh shares), Acropetal Technologies (58.52 lakh shares) and Nandan Exim (53.02 lakh shares), were the other volume toppers in that order.

As per reports, advance tax payments made by top 100 firms based in the country's financial capital 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. Higher advance tax collections reflect more income for firms indicating that companies' sales are growing to meet rising demand.

European stock markets erased gains on Wednesday, 16 March 2011, led by losses for banking stocks. The key benchmark indices in UK, France and Germany were down by between 0.15% to 1%

Global ratings firm Moody's late Tuesday cut Portugal's long-term government bond rating by two notches, to A3, saying the country will continue to face low growth and funding pressure for years, even if it taps the European Union bailout fund.

Japanese shares surged on Wednesday, 16 March 2011, recouping some of the hefty losses suffered in the previous two sessions triggered by nuclear crisis that followed a massive earthquake and tsunami on Friday, 11 March 2011, also drawing some support from the Bank of Japan's efforts to infuse a large dose of liquidity into the markets. The Nikkei 225 average rose 5.68%. Other Asian stocks rose. The key benchmark indices in China, South Korea, Indonesia, Hong Kong, Singapore and Taiwan were up by between 0.10% to 1.77%.

Meanwhile, global ratings agency Standard & Poor's said on Wednesday Asian economies will continue to grow strongly this year even as Japan struggles with the aftermath of a devastating earthquake and tsunami.

Trading in US index futures indicated that the Dow could fall 33 points at the opening bell on Wednesday, 16 March 2011.

US stocks sank Tuesday as worries deepened over the specter of a nuclear crisis and economic slowdown in Japan, but encouraging comments from the Federal Reserve kept the losses in check. The Dow Jones Industrial Average fell 137.74 points, or 1.15%, to 11855.42. The Standard & Poor's 500-stock index slid 14.52, or 1.12%, to 1281.87 and the Nasdaq Composite fell 33.64, or 1.25%, to 2667.33.

The US central bank voted unanimously to keep in place its government-bond purchase plan and to maintain a pledge that short-term interest rates will stay close to zero for an "extended period." In a statement following its policy meeting, the central bank noted improvements in consumer spending and a brighter jobs picture. Fed officials also said the strong rise in international commodity prices was putting upward pressure on prices, though they expected the effects of higher oil prices to be transitory.

US crude futures were up $1.49 a barrel or 1.49% to $98.63 a barrel. Oil prices have come off 29-month highs after a sharp recent rally triggered by unrest in oil rich Middle East and North Africa regions.

The wholesale price index (WPI) rose an annual 8.31% in February 2011 on higher fuel and manufactured product prices, government data showed on Monday, 14 March 2011. The figure was above market expectations and it was also higher than the annual rise of 8.23% in January 2011. The annual reading for December 2010 was revised upwards to 9.41% from 8.43%.

The Reserve Bank of India (RBI) undertakes a mid-quarter policy review on Thursday, 17 March 2011. Twelve out of 16 economists polled by Capital Market expect 25 basis points increase in repo rate and reverse repo rate each from the Reserve Bank of India (RBI) on 17 March 2011. The rest 4 economists expect no change in policy rates.

The Union Cabinet on Tuesday, 15 March 2011, approved a bill to usher in a national goods and services tax (GST), the final step in the country's most ambitious tax reform before introducing it in parliament. The GST will cut business costs and boost government tax revenue, but will likely miss its April 2012 deadline for implementation due to resistance from several states and the Bharatiya Janata Party.