Sensex, Nifty rally for sixth straight session; settle at two-month highs

The key benchmark indices logged decent gains, extending rally into the sixth day, as inflation worries eased along with a decline in crude oil prices and as data showing stepping up of buying by foreign funds recently boosted sentiment. Hopes for easing of tension between India and Pakistan aided gains after Pakistan agreed to allow an official team from India to travel to Pakistan to probe the 2008 Mumbai terrorist attacks. The BSE Sensex and the 50-unit S&P CNX Nifty settled at two-month highs. The Sensex shut shop with gain of 177.60 points or 0.94% to 19,121.01, off 105.20 points from the day's high and up 176.19 points from the day's low.



All the 13-sectoral indices on BSE were in positive zone. Index heavyweight Reliance Industries was volatile in late trade. IT pivotals rose on upbeat economic data in the US, the key market for Indian software exporters. Telecom stocks were in demand on reports the government is helping the firms secure loans after the controversial 2G spectrum allocation virtually blocked flow of funds. Auto stocks rose ahead of the release of March 2011 sales figures starting Friday, 1 April 2011.

State-run public sector oil marketing companies (PSU OMCs) rose after crude oil futures fell on hopes that Libyan oil may be back to the pipelines sooner than anticipated. Most banking pivotals extended recent gains after the government last week tabled the banking sector amendment bill in parliament. Metal stocks gained on renewed buying. The market breadth was weak, having reversed direction from a strong breadth earlier in the day, as investors squared up positions in small-cap and mid-cap shares due to year-end considerations.

The barometer index BSE Sensex has jumped 1,281.75 points or 7.18% in six trading days from its close of 17,839.05 on 21 March 2011.

The market struck a two-month high in opening trade buoyed by data showing recent heavy buying by foreign funds. The key benchmark indices came off after hitting fresh two month highs in morning trade. The market hovered near two-month high in mid-morning trade. The Sensex struck a fresh two-month high in early afternoon trade. The market hit a fresh two-moth high in afternoon trade. The market pared gains later. The Sensex regained strength in mid-afternoon trade. The market once again came off highs later.

Foreign institutional investors (FIIs) bought shares worth a net Rs 481.70 crore on Monday, 28 March 2011, compared with an inflow of Rs 1518 crore on Friday, 25 March 2011. FII inflow in March 2011 totaled Rs 4353.90 crore (till 28 March 2011). FIIs had sold equities worth Rs 4585.50 crore in February 2011. FII outflow in the calendar year 2011 totaled Rs 5044.80 crore (till 28 March 2011).

Oil extended recent losses after Libyan rebels advanced against Muammar Qaddafi's troops, bolstering speculation the conflict in Africa's third- largest crude producer may be resolved soon. US crude futures were down 99 cents a barrel or 0.95% to $102.99 a barrel. India imports majority of its crude oil requirements and a surge in crude oil prices to 2-1/2-year highs recently had sparked inflation and interest rates worries.

The BSE 30-share Sensex jumped 177.60 points or 0.94% to 19,120.80, its highest closing since 24 January 2011. The Sensex gained 283.07 points at the day's high of 19,226.21 in late trade. The index rose 1.68 points at the day's low of 18,944.82 in early trade.

The S&P CNX Nifty was up 49.10 points or 0.86% to 5,736.35, its highest closing since 24 January 2011. The Nifty a high of 5,770.35 in intraday trade.

The market breadth, indicating the health of the market, was negative. On BSE, 1864 shares declined while 1151 shares advanced. A total of 85 shares remained unchanged. The breadth was strong earlier in the day.

The total turnover on BSE amounted to Rs 3704 crore, higher than Monday's turnover of Rs 3219 crore.

The BSE Mid-Cap index rose 0.03% and the BSE Small-Cap index slipped 0.36%. Both these indices underperformed the Sensex.

All the 13-sectoral indices on the BSE logged gains. The BSE Auto (up 1.53%), the BSE TecK (up 1.35%), and the BSE Metal (up 1.08%), outperformed the Sensex. The BSE Capital Goods (up 0.11%), the BSE FMCG (up 0.30%), and the BSE Oil & Gas (up 0.40%), underperformed the Sensex.

Among the 30-member Sensex pack, 27 gained while only three of them declined.

Telecom stocks were in demand on reports Communications and IT Minister Kapil Sibal on Monday met Prime Minister Manmohan Singh and Finance Minister Pranab Mukherjee to seek their intervention for the loans to telecom companies as the controversial 2G spectrum allocation virtually blocked flow of funds to the telecom companies. India's second largest listed cellular services provider by sales Reliance Communications jumped 4.04% to Rs 109.45 and was the top gainer from the Sensex pack.

India's largest listed cellular services provider by sales Bharti Airtel surged 2.93%. The stock extended five-day 9.59% rally 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.

Idea Cellular rose 0.92%, extending Monday's over 2% gains after the company launched third-generation (3G) mobile services in three of the 11 zones it holds 3G licences. Idea Cellular said it will expand the services to 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.

IT pivotals rose on upbeat economic data in the US, the key market for Indian software exporters. India's largest software services exporter Tata Consultancy Services gained 1.59% after the company signed a contract with Credit Union Australia to implement core banking solution. The contract augurs well for TCS to scale its revenue from the banking, financial services & insurance (BFSI) vertical, which currently contributes 44.6% to its revenue. The company announced the new order win after market hours on Monday, 28 March 2011.

India's second largest software services exporter Infosys rose 0.98% and India's third largest software services exporter Wipro rose 0.43%

Select banking pivotals 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 0.65%. 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 second largest private sector bank by net profit HDFC Bank rose 0.16%, extending three-day gains. India's largest private sector bank by net profit ICICI Bank was down 0.03%, halting four-day gains.

Punjab National Bank gained 1.79% after the bank said it has raised Rs 184 crore by issuing 15.09 lakh shares of Rs 10 each at a premium of Rs 1208.82 per share to the Government of India on preferential basis. The bank made this announcement after market hours on Monday, 28 March 2011.

Corporation Bank flared up 5.76% after the bank said it has raised Rs 308.99 crore by issuing 46.92 lakh shares of Rs 10 each at a premium of Rs 648.49 per share to the Government of India on preferential basis. The bank made this announcement during trading hours today, 29 March 2011.

Most metal stocks gained on fresh buying. Hindalco Industries (up 0.97%), Hindustan Zinc (up 3.14%), Sterlite Industries (India) (up 2.18%), Sesa Goa (up 4.48%), Nalco (up 0.10%), Jindal Saw (up 2.76%), edged higher. Tata Steel was unchanged at Rs 613.35.

Oil & gas stocks rose after the ninth round of oil and gas block auctions closed on Monday. India's largest oil exploration firm ONGC advanced 1.36% on reports a consortia led by ONGC won 10 blocks in the latest round of bidding for oil & gas blocks in India.

Index heavyweight Reliance Industries (RIL) rose 0.16% to Rs 1025 on reports the firm was awarded two blocks in the latest round of bidding for oil & gas blocks in India. The stock oscillated in a band of Rs 1031.50 and Rs 1019.05 during the day.

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.

State-run public sector oil marketing companies (PSU OMCs) rose after crude oil futures fell on hopes that Libyan oil may be back to the pipelines sooner than anticipated. Bharat Petroleum Corporation (up 2.57%), Hindustan Petroleum Corporation (up 2.23%) and Indian Oil Corporation (up 3.44%), rose.

Lower crude oil prices will decrease under-recoveries of state-run oil marketing companies on domestic sale of diesel, LPG and kerosene at controlled prices. The government has already freed pricing of petrol.

India's largest two-wheeler maker by sales Hero Honda Motors jumped 2.40% after the Cabinet Committee on Economic Affairs, headed by Prime Minister Manmohan Singh, 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.

Other auto stocks were also in demand ahead of the release of March 2011 sales figures starting 1 April 2011. India's top truck maker by sales Tata Motors rose 1.70% and India's largest tractor maker by sales Mahindra & Mahindra (M&M) rose 1.45%.

India's largest car maker by sales Maruti Suzuki India rose 3.59% while India's second largest bike maker by sales Bajaj Auto gained 0.51%.

India's largest engineering & construction firm Larsen & Tourbo (L&T) rose 0.38%, extending Monday's close to 2% rise, on a media report the company may sell its entire stake in joint ventures in which it is not a majority shareholder.

Anil Ambani-led power generation major Reliance Infrastructure advanced 1.81%. Reliance Infrastructure has 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.

ACC rose 0.18%. The stock turned ex-dividend today, 29 March 2011, for a final dividend of Rs 13 per share and one time special dividend Rs 7.50 per share.

D B Realty spurted 19.66% to Rs 99.80 on bargain hunting after the stock slumped 23.94% in the past one month, 57.37% in the past three months and 81.55% in the past one year till 28 March 2011.

Tata Coffee was the top traded counter on BSE with turnover of Rs 182.87 crore followed by State Bank of India (Rs 92.63 crore), LIC Housing Finance (Rs 81.38 crore), Fineotex Chemicals (Rs 80.64 crore), and BF Utilities (Rs 70 crore).

Cals Refineries clocked highest volume of 2.41 crore shares on BSE. NHPC (1.70 crore shares), Unitech (85.85 lakh shares), Sarang Chemicals (79.17 lakh shares) and Himachal Futuristic Communications (78.33 lakh shares), were the other volume toppers in that order.

Volatility may remain high on the bourses in the near term ahead of the expiry of derivative contracts for the near-month March 2011 series on Thursday, 31 March 2011.

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

European shares reversed initial small gains with UBI Banca SpA dragging the Italian bank sector south after it announced plans to raise capital, while BP PLC added pressure to the downside after a broker downgrade. The key benchmark indices in Germany, France and UK were down by between 0.26% to 0.69%.

Asian stocks pared declines as better-than-estimated earnings in China and Hong Kong offset concerns economic growth in Japan will falter as the nation struggled to contain a partial meltdown at a nuclear plant. The key benchmark indices in China, Hong Kong, Singapore, Japan and Indonesia were down by between 0.03% to 0.86%. The key benchmark indices in Taiwan and South Korea rose 0.51% and 0.77%, respectively.

US stocks edged lower on Monday, 28 March 2011, after a late tumble undercut advances from earlier in the day, and as investors cautiously retreated ahead of key data reports later this week. The Dow Jones Industrial Average closed down 22.71 points, or 0.2%, at 12197.88. The Nasdaq Composite fell 12.38, or 0.5%, to 2730.68 and the Standard & Poor's 500-stock index shed 3.61, or 0.3%, to 1310.19.

In economic news, the National Association of Realtors said its Pending Home Sales Index, based on contracts signed in February 2011, increased 2.1% to 90.8. The index had declined 2.8% in January 2011.

Trading in US index futures indicated that the Dow could rise 10 points at the opening bell on Tuesday, 29 March 2011.

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.

Indian business tycoons Ratan Tata and Anil Ambani will appear before a parliamentary committee that is probing a multi-billion-dollar telecoms licencing scandal. The parliament's Public Accounts Committee (PAC) is investigating alleged corruption in the sale of 2G telecoms licences in 2007-08, which a state auditor said cost the government up to $39 billion in lost revenue, and led to the sacking of a former telecoms minister.