Sensex jumps 9% in 8 days; up 10.9% in FY 2011

Celebrations galore as Team India's dazzling victory over the arch rivals Pakistan in a thrilling semi-final on Wednesday to enter the World Cup 2011 finals was followed by a continued rally on the Indian bourses. The key benchmark indices scored strong gains in highly volatile trade to remain unbeaten for eight straight session of trade and settled at 2-1/2 months highs. The BSE 30-share Sensex was up 155.04 points or 0.80% to 19,445.22, up 160.87 points from the day's low and off 129.94 points from the day's high. The market breadth, indicating the health of the market, turned positive in late trade, having swung between positive and negative zone in intraday trade. The Sensex has jumped 1,606.17 points or 9% in eight trading days from its close of 17,839.05 on 21 March 2011, with revival of foreign fund inflows boosting sentiments.



The key benchmark indices saw wild intraday gyrations during the last two hours or so of trade today, 31 March 2011, as traders rolled over positions from the near-month March 2011 contracts to April 2011 contracts ahead of today's (31 March 2011) expiry of the near-month March 2011 contracts. Oil & gas heavyweights -- Reliance Industries (RIL) and ONGC, extended gains in late trade, rising for the third day in a row, after they were awarded oil & gas blocks in the government auction that closed early this week. Infrastructure pivotals were in demand on fresh buying. IT pivotals rose as IT bellwether Infosys is seen giving decent to strong earnings and revenue guidance next month.

Metal stocks edged higher on expectations of increase in demand for metals such as copper and aluminium as Japan begins redevelopment after the devastating earthquake and tsunami on 11 March 2011. Banking pivotals retreated from intraday highs on profit booking after recent sharp rally. Auto stocks were mixed ahead of the release of March 2011 sales figures starting 1 April 2011.

Foreign institutional investors (FIIs) bought shares worth a net Rs 1043.50 crore on Wednesday, 30 March 2011, compared with an inflow of Rs 1500.40 crore on Tuesday, 29 March 2011. FII inflow in March 2011 totaled Rs 6897.80 crore (till 30 March 2011). FIIs had sold equities worth Rs 4585.50 crore in February 2011. FII outflow in the calendar year 2011 totaled Rs 2500.90 crore (till 30 March 2011).

The barometer BSE Sensex and 50-unit S&P CNX Nifty struck 2-1/2-month highs at the onset of the trading session as data showing sustained buying by foreign funds boosted sentiments. A bout of volatility was witnessed in morning trade as the key regained strength soon after coming off 2-1/2-month highs. The market raced to fresh 2-1/2 month high in mid-morning trade as most Asian stocks rose. Buying frenzy in early afternoon trade pushed the market to fresh 2-1/2 month high. The market pared gains in afternoon trade. Wild intraday gyrations were witnessed as the key benchmark indices hit fresh intraday lows in mid-afternoon trade. The market regained strength in late trade after diving to day's low in the negative zone in a highly volatile late trade.

On account of the annual bank closing on Friday, 1 April 2011 and Gudi Padwa festival on Monday, 4 April 2011, multiple settlements have been scheduled on Wednesday, 6 April 2011 and Thursday 7 April 2011. Shares purchased on Thursday, 31 March 2011 should not be sold on Friday, 1 April 2011 and shares purchased on Monday, 4 April 2011 should not be sold on Tuesday 5 April 2011, brokers have advised clients.

The BSE 30-share Sensex was up 155.04 points or 0.80% to 19,445.22, its highest closing since 12 January 2011. The index gained 284.98 points at the day's high of 19,575.16 in early afternoon trade its highest level since 10 January 2011. The index slipped 5.83 points at the day's low of 19,284.35 in late trade.

The S&P CNX Nifty was up 46.10 points or 0.80% to 5,833.75, its highest closing since 12 January 2011. The Nifty a high of 5,872 and low of 5,778.65 during the day.

The BSE Sensex jumped 1,621.82 points or 9.1% to settle at 19,445.22 on 31 March 2011 from its close of 17,823.40 on 28 February 2011. The 50-unit S&P CNX Nifty jumped 500.50 points or 9.38% to 5,833.75 in March 2011. The BSE Mid-Cap index surged 500.17 points or 7.84% to 6,873.40 and the BSE Small-Cap index advanced 358.57 points or 4.58% to 8,175.89 in the month. Both these indices underperformed the Sensex.

The Sensex lost 1,063.87 points or 5.18% in Q4 March 2011. The barometer index jumped 1,917.45 points or 10.9% in the year ended March 2011 (FY 2011). The BSE Small-Cap index dropped 1,494.42 points or 15.45% in Q4 March 2011 and lost 321.54 points or 3.78% in FY 2011. The Mid-Cap index lost 929.31 points or 11.91% in Q4 March 2011 and rose 67.22 points or 0.98% in FY 2011.

Coming back to today's trade, the market breadth indicating the health of the market, turned positive in late trade. On BSE, 1451 shares advanced while 1439 shares declined. A total of 97 shares remained unchanged. The breadth oscillated between positive and negative during the day.

The total turnover on BSE amounted to Rs 3192 crore, higher than Rs 3105 crore on Wednesday.

The BSE Mid-Cap index rose 0.29% and the BSE Small-Cap index rose 0.21%. Both these indices underperformed the Sensex.

Sectoral indices on BSE displayed mixed trend. The BSE IT (up 1.92%), the BSE FMCG (up 1.67%), and the BSE Oil & Gas (up 1.44%), outperformed the Sensex. The BSE Bankex (down 0.70%), the BSE Healthcare (down 0.35%), and the BSE Consumer Durables (down 0.22%), underperformed the Sensex.

Among the 30-member Sensex pack, 21 gained while the rest of them declined.

Index heavyweight Reliance Industries (RIL) spurted in late trade. The stock advanced 1.74% to Rs 1050.90 after gyrating between Rs 1052.50 and Rs 1034.90 during the day. Reportedly, RIL was awarded two blocks in the ninth round of oil and gas block auctions closed on Monday, 28 March 2011.

India's largest oil exploration firm ONGC surged 2.37%, extending early gains, on recent reports a consortia led by ONGC won 10 blocks in the ninth round of oil and gas block auctions closed on Monday.

Airline shares declined on fears that the state-run oil marketing companies would increase aviation turbine fuel price following a jump in crude oil prices. Kingfisher Airlines (down 1.59%), SpiceJet (down 4.73%) and Jet Airways India (down 4.82%) edged lower.

Jet fuel constitutes more than 50% of operating cost for airliners. Prices of jet fuel are linked to crude oil prices.

Anil Ambani-led power generation major Reliance Infrastructure shot up 3.16% to Rs 698 and was the top gainer from the Sensex pack. After market hours on Tuesday, 29 March 2011, Reliance Infrastructure announced an up to Rs 1000-crore share buy-back offer to buy up to 8.34% shares from public shareholders. The company has set maximum buyback price at Rs 725 a piece. The buyback opens on 5 April 2011 and closes on 13 February 2012.

Power generation major Tata Power rose 0.17% after the company during market hours today, 31 March 2011, said it has commissioned 120 megawatt unit 5 at the Jojobera Thermal Power Station in Jamshedpur.

India's largest engineering and construction firm by sales Larsen & Toubro (L&T) rose 0.20% after the company during market hours today, 31 March 2011, said it has sold its entire stake in L&T-CASE Equipment to its joint venture partner CNH Global NV.

India's top power equipment maker by sales Bharat Heavy Electricals (Bhel) slipped 0.15%. During trading hours on Wednesday, 30 March 2011, Bhel said it has secured a contract worth Rs 5450 crore from Lalitpur Power Generation Company, a Bajaj Group, for setting up a super critical power project.

India's second largest software services exporter Infosys surged 2.29%. Given underlying strong demand for offshore outsourcing, IT bellwether Infosys is seen giving a decent to strong guidance on revenue and earnings front for the year ending March 2012 when the software major announces Q4 and year ended March 2011 results next month.

India's largest software services exporter TCS soared 2.58% to Rs 1181 after the company inaugurated its first learning and development centre for campus trainees in Hyderabad on Tuesday, 29 March 2011. The facility is equipped to train 6,000 professionals in a year. India's third largest software services exporter Wipro rose 0.50%

Smartlink Network Systems dived 11.88% in volatile trade after the company's announcement of sale of its digilink business to Schneider Electric India for a consideration of Rs 503 crore payable in cash. In early trade today, 31 March 2011, shares of Smartlink Network Systems jumped as much as 20% Rs 93.95 after the company made the announcement during trading hours. At the day's low of Rs 65.15, the stock tumbled 16.79%.

Auto stocks were mixed ahead of the release of March 2011 sales figures starting 1 April 2011. India's largest two-wheeler maker by sales Hero Honda Motors spurted 3.03% after the Cabinet Committee on Economic Affairs, headed by Prime Minister Manmohan Singh early this week approved Hero Investment's proposal to receive foreign direct investment (FDI) of Rs 4500 crore. Earlier this month, Hero Investments agreed to buy Honda Motors' 26% stake in Hero Honda Motors for around $851 million, with the Japanese automaker exiting its joint venture in India after more than 26 years.

India's top truck maker by sales Tata Motors fell 0.57% on profit booking after advancing 11.54% in previous eight trading sessions. India's largest car maker by sales Maruti Suzuki India shed 0.68% while India's second largest bike maker by sales Bajaj Auto gained 3.06%. India's largest tractor maker by sales Mahindra & Mahindra (M&M) lost 1.70% to Rs 693.90, halting five-day 9.95% gains.

Banking pivotals were off day's highs in volatile trade. India's largest private sector bank by net profit ICICI Bank rose 0.34% to Rs 1111, off day's high of Rs 1126. India's second largest private sector bank by net profit HDFC Bank rose 0.69% to Rs 2354 after striking a day's high of Rs 2390.

India's largest bank by net profit and branch network State Bank of India (SBI) slumped 3.41% to Rs 2761.80, retreating sharply from day's high of Rs 2888. The stock slipped on profit booking after a seven-day 10.70% rally. Reportedly, SBI is likely to continue with its special home loans beyond March 2011. The scheme is scheduled to end today, 31 March 2011. It was the top loser from the Sensex pack.

Metal stocks edged higher on expectations of increase in demand for metals such as copper and aluminium as Japan begins redevelopment after the devastating earthquake and tsunami on 11 March 2011. Sterlite Industries (India) (up 1.02%), Jindal Steel and Power (up 0.99%), Tata Steel (up 0.91%), Sesa Goa (up 0.66%), Hindalco Industries (up 2.19%), and Sail (up 2.19%), edged higher.

Welspun Corp rose 4.14% after the company secured pipe orders aggregating Rs 1182 crore largely from international clients. The company announced the new orders before trading hours today, 31 March 2011. With these new orders, the current order book of the company stands at Rs 6153 crore without excluding the orders being executed in Q4 March 2011.

Paper shares saw an across the board rally for the second day after International Paper, a US-based paper and packaging giant, on Tuesday, 29 March 2011, agreed to buy the entire promoter stake in Andhra Pradesh Paper Mills at a significant premium to the ruling market price. Andhra Pradesh Paper Mills was frozen at 20% upper circuit at Rs 283.35.

JK Paper (up 1.56%), Rama Newsprint (up 4.61%), Malu Paper Mills (up 20%) surged.

International Paper Co. has agreed to acquire L. N. Bangur Group's entire 53.46% stake in Andhra Pradesh Paper Mills for about $257 million. The company also has agreed to a $62 million non-compete payment to the sellers. International Paper also will launch a tender offer to acquire up to an additional 21.5% of Andhra Pradesh Paper Mills for about $104 million.

State Bank of India was the top traded counter on BSE with turnover of Rs 143.54 crore followed by Titan Industries (Rs 83.48 crore), Reliance Industries (Rs 83.11 crore), Larsen & Toubro (Rs 70.19 crore), and DB Realty (Rs 55.98 crore).

K Sera Sera clocked highest volume of 2.18 crore shares on BSE. Acropetal Technologies (78.30 lakh shares), Cals Refineries (64.87 lakh shares), Smartlink Network Systems (64.38 lakh shares) and Unitech (54.40 lakh shares), were the other volume toppers in that order.

The near term major trigger for the market is Q4 March 2011 results which will start trickling in from about mid-April 2011. Investors will also scrutinize post-result management commentary to gauge outlook on earnings at a time when rising salaries, raw materials prices and interest rates are pressurizing profit margins of India Inc.

Food price index rose 9.50% and the fuel price index climbed 13.13% in the year to 19 March 2011, government data on Thursday showed. In the previous week, annual food and fuel inflation stood at 10.05% and 12.79% respectively. Inflation in the Primary Articles group fell to 12.98% in the week under review from 13.53% in the week ended 12 March 2011, according to the Commerce Ministry statement.

The government today eased rules on foreign investments. Foreign companies operating in India won't need prior approval from their existing joint-venture partners to operate separately in same business segments. Reports added that this measure will promote the competitiveness of India as an investment destination and it will be instrumental in attracting higher levels of FDI (foreign direct investment) and technology inflows into the country.

The government also has liberalized the rules to allow conversion of non-cash items like import of capital goods, machinery and pre-operative or pre-incorporation expenses into equity with approval from the government. Earlier only external commercial borrowing, lump-sum fee and royalty were allowed to convert into equity. The government has also permitted foreign direct investments in the development and production of seeds and planting materials, without the clause of doing so under "controlled conditions."

Billionaire investor and international investment icon Warren Buffett who was in his maiden visit to India last week said 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.

US crude futures were up $1.16 a barrel or 1.11% to $105.43 a barrel as concern the Libyan conflict will prolong production cuts countered signs of rising supplies in the US, the world's largest crude consumer. India imports majority of its crude oil requirements and a surge in crude oil prices to 2-1/2-year highs recently has sparked inflation and interest rates worries. High oil prices have also raised concerns about higher oil subsidy bill for the government and its negative impact on the government's fiscal position.

European stocks fell as investors and traders await Friday's crucial US employment report. Key benchmark indices in UK, Germany and France were down by 0.06% to 0.39%.

Asian markets rose on Thursday as a jobs report boosted optimism in the US economy and Chinese companies posted earnings that beat analyst estimates. The key benchmark indices in Taiwan, Japan, Hong Kong, South Korea, Singapore and Indonesia were up by between 0.32% to 1.04%. China's Shanghai Composite slipped 0.88%.

Telecommunications stocks led US stocks higher Wednesday, as optimism over deal activity added to confidence that jobs data would continue pointing toward a strengthening labor market. The Dow Jones Industrial Average gained 71.60 points, or 0.58%, to finish at 12350.61. The Standard & Poor's 500-stock index closed 8.82 higher, or 0.67%, at 1328.26 and the Nasdaq Composite gained 19.90, or 0.72%, to 2776.79.

The ADP Employer Services report on Wednesday showed companies hired 201,000 workers in March, marking the third time in four months that the nation added more than 200,000 jobs.

Trading in US index futures indicated that the Dow could rise 10 points at the opening bell on Thursday, 31 March 2011.