Sensex regains 18,000 as heavyweights rise

The key benchmark indices logged decent gains, extending Tuesday's advance, on firm global cues. Index heavyweights -- ICICI Bank, Reliance Industries, Infosys Technologies and ITC led the rally. The market sentiment was positive after billionaire investor and international investment icon Warren Buffett on Tuesday, 22 March 2011, said he is looking forward to using the enormous cash pile of flagship firm Berkshire Hathaway to acquire companies in India. The sentiment was also boosted by the government tabling two key reforms bills in parliament on Tuesday, 22 March 2011. The BSE 30-share Sensex was up 217.86 points or 1.21% to 18,206.16, up 255.99 points from the day's low and off 12.12 points from the day's high.



All the 13 sectoral indices on the BSE logged gains. The market breadth was positive. Index heavyweight Reliance Industries extended gains in late trade. Power equipment maker Bhel advanced close to 3% after a large order win. Software pivotals saw mixed trend. Banking stocks rose after the government Tuesday, 22 March 2011, tabled banking sector amendment bill in parliament.

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. Infrastructure stocks rose on government's thrust on infrastructure sector in Union Budget 2011-2012, which was passed by the Lok Sabha on Tuesday. Metals stocks rose as metal prices rose on the London Metal Exchange on Tuesday, 22 March 2011. Sugar stocks rose for the second day after the government allowed sugar exports amid a sharp decline in retail prices.

The BSE Sensex regained the psychological 18,000 mark at the onset of the trading session. The market pared gains after hitting a fresh intraday high in mid-morning trade. The market held firm in early afternoon trade as pivotals continued to attract buyers. The key benchmark indices pared gains after hitting fresh intraday high in afternoon trade. The market held steady in mid-afternoon trade. The market surged to fresh intraday high in late trade.

The BSE 30-share Sensex was up 217.86 points or 1.21% to 18,206.16. The index gained 229.98 points at the day's high of 18,218.28 at the fag end of the trading session. The Sensex lost 38.13 points at the day's low of 17,950.17 at the onset of the trading session.

The S&P CNX Nifty was up 66.40 points or 1.23% to 5,480.25 after gyrating between 5,484.95 and 5,401.95 so far during the day.

The market breadth, indicating the health of the market, was positive. On BSE, 1664 shares advanced while 1239 shares declined. A total of 116 shares remained unchanged. The breadth was much stronger earlier in the day.

The total turnover on BSE amounted to Rs 2873 crore, lower than Rs 3204.02 crore on Tuesday, 22 March 2011.

The BSE Mid-Cap index rose 0.92% and the BSE Small-Cap index rose 0.65%. Both these indices underperformed the Sensex.

All the 13-sectoral indices on the BSE logged gains. The BSE Realty (up 1.92%), the Bankex (up 1.85%), and the BSE Healthcare (up 1.51%), outperformed the Sensex. The BSE Consumer Durables (up 0.05%), the BSE Auto (up 0.07%), and the BSE PSU (up 0.51%), underperformed the Sensex.

Among the 30-member Sensex pack, 26 gained while only four of them declined. Cipla (up 4.66%), ITC (up 1.44%), and Bharti Airtel (up 1.21%), edged higher from the Sensex pack.

Index heavyweight Reliance Industries (RIL) rose 1.45% to Rs 1014 after oscillating between Rs 1015 and Rs 995.50 during the day. Reportedly a fluid catalytic cracker (FCC) at RIL's old plant could start 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.

Banking shares gained 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 surged 3.94% to Rs 1042.85.

India's second largest private sector bank by net profit HDFC Bank gained 0.39%. India's largest bank by branch network and net profit State Bank of India advanced 0.99%.

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.

Infrastructure stocks rose on government's thrust on infrastructure sector in Union Budget 2011-2012, which was passed by the Lok Sabha on Tuesday.

India's largest power equipment maker by sales Bharat Heavy Electricals (Bhel) advanced 2.72% after bagging an order worth Rs 1590 crore, in consortium with ABB, from Power Grid Corporation of India for a power transmission link. Bhel together with its partner ABB, Sweden, will execute the project involving system engineering, design, supply and installation of three HVDC converter stations. The first stage of the system is scheduled to be operational in 2014 and the second stage in 2015, Bhel said. In financial terms, this is the largest order finalized in T&D sector any where in the world, the company said.

BEML gained 2.57% after the company said Life Insurance Corporation has hiked its stake in the firm to 10.12% from 9.88%. The company made this announcement during trading hours today, 23 March 2011.

Jaiprakash Associates (up 3.54%), GMR Infrastructure (up 0.54%), Larsen & Toubro (up 1.18%), Reliance Infrastructure (up 1.56%), IVRCL Infrastructure (up 1.44%), and Punj Lloyd (up 1.39%), gained.

Metals stocks rose as LMEX, a gauge of six metals traded on the London Metal Exchange, rose 0.88% on Tuesday, 22 March 2011. Hindalco Industries (up 2.42%), Hindustan Zinc (up 1.09%), Sterlite Industries (India) (up 2.32%), Sail (up 0.93%), Sesa Goa (up 4.38%), Jindal Saw (up 1.09%), and JSW Steel (up 2.60%), edged higher.

India's largest private sector steel maker by sales Tata Steel rose 0.91%. Reportedly the company is in talks to buy coking coal mines in western Canada and has started talks with the government of British Columbia, a Canadian province to acquire coal mines.

Mahindra & Mahindra lost 1.13% to Rs 645 and Tata Motors was unchanged at Rs 1136 following reports the Delhi state government has imposed an additional tax of 25% on the existing tax rates for all diesel-propelled vehicles sold in Delhi. The overall net impact will be that tax will increase by 1%. Vehicle cost will increase in the range of Rs 4000-5000 for low end models and the impact will be more for high end models.

India's largest car maker by sales Maruti Suzuki India rose 0.35%, extending Wednesday's over 4% rally after the company's chairman told the media that production at the company's units is continuing normally after last week's major quake in Japan.

Shares of Maruti Suzuki had lost 10.85% in seven trading sessions to Rs 1131.35 on 21 March 2011 from a recent high of Rs 1269.10 on 10 March 2011 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.

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. Majority of property and auto deals are driven by finance. DLF (up 3.29%), HDIL (up 2.44%), Orbit Corporation (up 1.75%), Indiabulls Real Estate (up 4.95%), and Unitech (up 1.37%), edged higher from the real estate sector.

Software pivotals saw mixed trend. India's second largest software exporter by sales Infosys Technologies rose 1.75% and India's third largest software exporter by sales Wipro rose 0.81%. India's largest software exporter by sales TCS fell 0.46%

Sugar stocks rose for the second day after the government allowed sugar exports amid a sharp decline in retail prices. Balrampur Chini Mills (up 0.91%), Bajaj Hindusthan (up 1.92%), Shree Renuka Sugars (up 1.18%), Sakthi Sugar (up 3.29%), and Ugar Sugar (up 0.32%), edged higher.

As per latest announcement of Indian government, sugar millers are allowed to export around 5 lakh tonnes of sugar exports under unrestricted sales. Moreover, the government has also hiked the sugar stock holding limit to 500 tonnes per trader from 200 tonnes.

Pantaloon Retail (India) jumped 5.86% after the finance minister on Tuesday, 22 March 2011, raised the rate of abatement on some branded garments and textile made-ups.

Glenmark Pharmaceuticals spurted 3.18% after the company said its step down subsidiary received a final approval from the US drug regulator to market an oral contraceptive drug in the US market. The company made this announcement during trading hours today, 23 March 2011.

Aurobindo Pharma gained 1.48% after the company said it has secured a final approval from US Food and Drug Administration to market Famciclovir tablets in multiple strengths in the United States. The company made this announcement during trading hours today, 23 March 2011.

Fineotex Chemicals was the top traded counter on the BSE with turnover of Rs 152.36 crore followed by ICICI Bank (Rs 98.49 crore), Acropetal Technologies (Rs 96.72 crore), State Bank of India (Rs 92.51 crore), and Reliance Capital (Rs 62.53 crore) were the other turnover toppers in that order.

Cals Refineries clocked highest volume of 1.09 crore shares on BSE. Acropetal Technologies (97.10 lakh shares), Fineotex Chemicals (79.96 lakh shares), Shree Ashtavinayak Cine Vision (61.21 lakh shares) and Splash Media Works (53.61 lakh 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 large market.

Meanwhile, 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.

Meanwhile, the Maharashtra state government in its Budget 2011-12 presented today proposed to simplify the levy of stamp duty in respect of share market transaction. It proposed uniform stamp duty rate of 0.005% on all sale-purchase transactions in the stock market.

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.

Finance Minister Pranab Mukherjee on Tuesday made some crucial changes including, reducing dividend distribution tax (DDT) threshold for foreign companies to 26%. He announced withdrawal of 5% service tax on air-conditioned hospitals with more than 25 beds and on diagnostic services. Mukherjee also announced that 10% excise duty would be levied on 45% of the price instead of the earlier proposed levy of 10% excise duty on 60% of the price of the branded apparel. The ministry also cut import duty on raw silk to 5% from 30% to push imports, however, adding that the duty could be changed as and when needed.

The FM also announced a cut in excise duty for completely knocked down (CKD) automobile kits to 30% from the proposed 60%. Further, the FM also said that seven computer parts would be exempted from customs duty and imported coking coal from excise duty.

US crude futures were up 52 cents a barrel or 0.50% to $105.49 a barrel, off the day's low. Oil prices have surged in recent months amid ongoing turmoil in Libya and other parts of the Middle East. Unrest in Yemen and Syria has also added to geopolitical worries. 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 shares were trading firm, on Wednesday, 23 March 2011, with miners edging higher as the price of copper and other metals rose. The key benchmark indices in UK, Germany and France were up by between 0.21% to 0.56%.

Portugal's minority government faces a crucial vote Wednesday on its proposed austerity package.

Japanese shares dropped on Wednesday, surrendering a portion of Tuesday's large gains, on reports Tokyo's government is advising families not to let infants drink tap water after higher-than-allowed levels of radioactive iodine were found in the city's water. The Nikkei 225 average ended 1.65% lower. But, most other Asian shares rose. The key benchmark indices in Singapore, Taiwan, Indonesia and China rose by between 0.44% and 1.03%. The key benchmark indices in Hong Kong declined 0.14% and South Korea fell 0.07%.

US stocks registered slight losses on Tuesday amid concerns about violence in Libya after a US fighter plane crashed there. The Dow Jones industrial average closed at 12,018.63, down 17.90 points or 0.2%. The broader S&P 500 closed at 1293.77, down 4.61 points or 0.4%.

Trading in US index futures indicated that the Dow could rise 28 points at the opening bell on Wednesday, 23 March 2011. US index futures reversed initial losses.

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.

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.