Sensex, Nifty attain two-month closing highs as crude drops

The key benchmark indices extended gains for the fifth straight session of trade to settle at two-month closing highs as inflation worries eased, with a fall in crude oil prices. Latest data showing that foreign institutional investors had stepped up buying of Indian stocks late last week also boosted sentiment. But, the barometer index BSE Sensex was unable to maintain the psychological 19,000 mark after topping past that level in intraday trade. The Sensex shut shop with a gain of 127.50 points or 0.68%, up 143.47 points from the day's low and off 81.04 points from the day's high.



The barometer index has jumped 1104.09 points or 6.18% in five trading days from its close of 17,839.05 on 21 March 2011. Resumption of buying by foreign funds, bullish comments on India from billionaire legendary investor Warren Buffett and hopes for economic reforms have boosted the bourses as the government tabled some key reforms bill in parliament last week.

Foreign institutional investors (FIIs) bought shares worth a net Rs 1518 crore on Friday, 25 March 2011, substantially higher than an inflow of Rs 345.50 crore on Thursday, 24 March 2011. FII inflow in March 2011 totaled Rs 3872.20 crore (till 25 March 2011). FIIs had sold equities worth Rs 4585.50 crore in February 2011. FII outflow in the calendar year 2011 totaled Rs 5526.50 crore (till 25 March 2011).

Coming back to today's trade, index heavyweight Reliance Industries (RIL), edged lower in volatile trade. Other oil and gas firms saw mixed trend. Auto stocks were in demand ahead of the release of March 2011 sales figures starting Friday, 1 April 2011. Banking stocks extended recent gains after the government last week tabled the banking sector amendment bill in parliament. Metal stocks declined as copper prices fell in London. Telecom pivotals saw divergent trend. The market breadth was weak, reversing from strong breadth earlier in the day.

US crude futures were down 56 cents a barrel or 0.53% to $104.84 a barrel after Libyan rebels regained control of the towns of Brega and Ras Lanuf where strategic oil facilities are located. The rebels' rapid advance over the weekend helped to reassure the market that key Libyan oil infrastructure remains largely intact, and crude exports may be able to restart quickly if the ruling regime of Col. Moammar Gadhafi collapses.

Oil prices have surged in recent months amid ongoing turmoil in oil rich Middle East and North Africa regions. 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.

Indian stocks were choppy right from the onset of the trading session as traders rolled over positions in the derivatives segment from the near-month March 2011 contracts to April 2011 contracts ahead of the expiry of the near-month March 2011 contracts on Thursday, 31 March 2011. Year-end reshuffling of positions by traders also added to volatility.

The key benchmark indices pared gains soon after hitting 2-month highs. The market surged in morning trade as data showing stepping up of buying by foreign funds late last week boosted sentiment. The market once again pared gains in mid-morning trade as profit booking emerged after a four-day rally. The market regained strength in early afternoon trade. The market once again pared gains later. Stocks surged again in afternoon trade. The market pared gains after hitting a fresh two-month high in mid-afternoon trade. Volatility continued in late trade.

The BSE 30-share Sensex was up 127.50 points or 0.68% to 18,943.14, its highest closing since 25 January 2011. The Sensex gained 208.54 points at the day's high of 19,024.18 in mid-afternoon trade. The index declined 16.07 points at the day's low of 18,799.57 in morning trade.

The S&P CNX Nifty was up 33 points or 0.58% to 5,687.25, its highest closing since 25 January 2011. The Nifty hit an intraday high of 5,709.10.

The market breadth, indicating the health of the market, was weak. On BSE, 1753 shares declined while 1262 shares advanced. A total of 84 shares remained unchanged. The breadth was strong earlier in the day.

The total turnover on BSE amounted to Rs 3195 crore, lower than Friday's Rs 3,290.68 crore.

The BSE Mid-Cap index rose 0.42% and the BSE Small-Cap index rose 0.12%. Both these indices underperformed the Sensex.

Sectoral indices on the BSE displayed mixed trend. The BSE Auto (up 1.52%), the BSE Capital Goods (up 1.27%), and the Bankex (up 1.21%), outperformed the Sensex. The BSE Metal (down 1.17%), the BSE Realty (down 0.56%), and the BSE Healthcare (down 0.29%), underperformed the Sensex.

Among the 30-member Sensex pack, 20 gained while the rest declined.

Index heavyweight Reliance Industries (RIL) fell 0.19% to Rs 1024.10, off day's high of Rs 1036.90 and also off the day's low of Rs 1011. India's upstream regulator S.K. Srivastava said today, 28 March 2011, the company may not touch peak output of 80 million cubic metre a day (mmscmd) of gas from its east coast deep water block by April 2012. The block is currently producing 52-53 mmscmd of gas.

RIL on Sunday, 27 March 2011, agreed to establish a joint venture (JV) with D.E. Shaw Group to build a leading financial services business in India. The JV will incorporate the D. E. Shaw group's investment and technology expertise with RIL's operational knowledge and extensive presence across India to offer a comprehensive array of financial services to the Indian market place, the two companies said in a joint press release.

Lou Salkind, a member of the D. E. Shaw Group's executive committee said the JV venture allows the D. E. Shaw Group to apply to the Indian markets the group's historical success in investment management and market making.

Separately, RIL after market hours on Friday, 25 March 2011, said that the planned maintenance and inspection (M&I) shutdown that had earlier been taken for the Fluidised Catalytic Cracking Unit (FCCU) of the DTA Refinery at Jamnagar, Gujarat has been completed and the init has now been successfully started after the shutdown. Further, RIL said a number of initiatives implemented during the above shutdown would lead to significant improvement in reliability and overall performance of the unit including product yields.

Other oil & gas stocks saw mixed trend. ONGC (up 1.05%), Indian Oil Corporation (up 0.98%), rose. GAIL India (down 2.33%), HPCL (down 0.53%), and BPCL (down 0.21%), declined.

Reports quoting the oil secretary indicated India has received 74 bids for 33 oil and gas exploration blocks in the ninth licensing round. The blocks are being offered under India's New Exploration and Licensing Policy (NELP) which was launched in 1999 offering more attractive terms to boost higher investment in the oil and gas sector of Asia's third-largest oil consumer. Results of the auctions will be announced later on Monday. The country expects investments of $14 billion in its ninth licensing round which includes eight deepwater blocks, seven shallow water and 19 onshore.

India's top truck maker by sales Tata Motors jumped 3.28% to Rs 1223 after its ADR gained 1.35% on Friday, 25 March 2011. It was the top gainer from the Sensex pack.

Other auto stocks were also in demand ahead of the release of March 2011 sales figures starting 1 April 2011. India's largest tractor maker by sales Mahindra & Mahindra (M&M) rose 0.79%. M&M last week 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.

India's largest car maker by sales Maruti Suzuki India rose 1.95%. India's largest bike maker by sales Hero Honda Motors rose 0.70% while India's second largest bike maker by sales Bajaj Auto gained 1.67%.

Anil Ambani-controlled infrastructure developer Reliance Infrastructure rose 1.44% after the company said it has withdrawn a proposal involving internal reorganization of some of its businesses and its 100% owned subsidiaries which was pending for implementation.

State-run NTPC rose 1.54% on reports the company plans to add 4320 megawatts power generation capacity on its own and from joint-venture projects in the next fiscal year beginning in April 2011.

India's largest engineering & construction firm Larsen & Tourbo (L&T) jumped 1.92% on a media report that the company may sell its entire stake in joint ventures in which it is not a majority shareholder. According to report, L&T right now is working out the exit details in two joint ventures (JV). L&T is reportedly in talks with CNH, a US-based agriculture and construction equipment company, with which it has a 13-year-old 50:50 JV -- L&T Case Equipment (L&T CE). L&T CE manufactures loader backhoes, vibratory compactors and other earth moving equipment, the report said. L&T is likely to ask for Rs 200 crore plus for its 50% stake in L&T CE.

L&T is also reviewing its 50:50 joint venture with Japanese company Komatsu for hydraulic excavators and components, reports suggest.

India's top dam builder by sales Jaiprakash Associates lost 2.21% to Rs 88.35 on profit booking after a 9.78% rally in the previous five trading sessions. It was the top loser from the Sensex pack.

Banking stocks extended recent gains after the government last week tabled banking sector amendment bill in parliament. India's largest bank by net profit and branch network State Bank of India rose 1.31%. Reportedly, the bank will launch its Rs 20000 crore rights issue after the first quarter of the fiscal year beginning in April 2011. The issue will raise half the amount needed to sustain the bank's growth over the next five years.

India's largest private sector bank by net profit ICICI Bank shot up 0.64%, extending three-day gains. India's second largest private sector bank by net profit HDFC Bank gained 1.33%, extending three-day gains.

Dena Bank surged 3.38% after the state-run bank said it has raised Rs 538.99 crore by issuing 4.65 crore shares of Rs 10 each at a premium of Rs 105.75 per share to the Government of India on preferential basis. The bank made this announcement before trading hours today, 28 March 2011.

The government last week 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.

LIC Housing Finance surged 6.93% following reports that LIC Housing Finance Asset Management Company, a unit of the company, is planning to start a Rs 500-750 crore real estate fund.

Most metal stocks declined as copper prices fell in London. Hindalco Industries (down 0.48%), Hindustan Zinc (down 0.83%), Sterlite Industries (India) (down 0.98%), Sesa Goa (down 1.72%), Tata Steel (down 0.37%), Nalco (down 2.23%), Jindal Saw (down 1.68%), edged lower. Sail gained 0.83%.

India's second largest software services exporter Infosys lost 0.65% on profit booking after an 8.2% rally in previous four trading days.

India's largest software services provider Tata Consultancy Services (TCS) rose 0.61%. After market hours on Monday, 28 March 2011, TCS said CUA, Australia's largest customer-owned financial institution has selected its world-leading TCS BαNCS banking platform to deliver CUA's new core banking system.

Telecom pivotals saw divergent trend. India's largest listed cellular services provider by sales Bharti Airtel gained 2.60%. The stock extended four-day 6.85% advance after a report showed the company has acquired up to 6-lakh 3G subscribers since the launch of the next generation telephony service in end-January 2011.

India's second largest listed cellular services provider by sales Reliance Communications dropped 1.83%, halting a four-day 3.79% gains.

Idea Cellular gained 2.35%. The company today, 28 March 2011, said it has launched third-generation (3G) mobile services in three of the 11 zones it holds 3G licences for and will expand the services to more towns. Idea said in a statement its 3G services would be available in 200 towns by mid-April, and in 750 towns by mid-2011. The company said it would cover 4,000 towns by end-March 2012.

Idea said it was finalising agreements with other operators to offer 3G services beyond its 11 zones. The high-speed services allow users faster internet browsing on mobile phones and services such as video calls.

Tata Communications jumped 4.69%. Last week the company had clarified that media reports suggesting the government's plan to sell the surplus land in custody of the company is speculative in nature. On Wednesday, 23 March 2011, shares of Tata Communications had surged 11.90% to Rs 245.95 on buzz that a demerger of the surplus land will pave the way for raising non-debt funding for the company's expansion.

Dr Reddy's Laboratories rose 0.03% after the company during market hours today, 28 March 2011, said it has launched Levocetirizine tablets in US.

LIC Housing Finance was the top traded counter on BSE with turnover of Rs 129.77 crore followed by State Bank of India (Rs 114.84 crore), Lovable Lingerie (Rs 83.57 crore), ICICI Bank (Rs 77.09 crore), and Larsen & Toubro (Rs 70.06 crore).

Cals Refineries clocked highest volume of 4.26 crore shares on BSE. Shree Ashtavinayak Cine Vision (1.06 crore shares), Parsvnath Developers (75.91 lakh shares), IFCI (65.33 lakh shares) and LIC Housing Finance (59.92 lakh shares), were the other volume toppers in that order.

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.

The near term major trigger for the market is Q4 March 2011 results. The Q4 results will start trickling in from about mid-April 2011.

European markets were mixed on Monday, 28 March 2011. The key benchmark indices in UK and France were up 0.08% and 0.19%. Germany's DAX fell 0.18%.

Asian stocks dropped on Monday, 28 March 2011, as radiation hampered efforts to cool crippled nuclear reactors in Japan, and as company earnings missed analyst estimates. The key benchmark indices in Singapore, Japan, Indonesia, Taiwan and Hong Kong fell by between 0.12% to 0.67%. The key benchmark indices in South Korea and China were up 0.11% and 0.21%, respectively.

US stocks rose on Friday, 25 March 2011, after upbeat results from technology giant Oracle Corp. and on data showing the economy grew more than previously estimated at the end of 2010. The Dow Jones Industrial Average finished up 50.03 points, or 0.41%, at 12220.59. The Standard & Poor's 500-stock index closed 4.14 points higher, or 0.32%, at 1313.80, and the Nasdaq Composite added 6.64 points, or 0.24%, to 2743.06.

US real gross domestic product grew at a 3.1% annualized rate in the fourth quarter, revised up from the 2.8% pace reported one month ago, according to the Commerce Department.

Trading in US index futures indicated that the Dow could rise 12 points at the opening bell on Monday, 28 March 2011.