Market ekes out small gains

The key benchmark indices eked out small gains in a volatile week as higher auto, cement sales in March 2011, strong macroeconomic data and expectations of normal monsoon were offset by rise in crude oil prices to 2-1/2 year high. Small and mid-cap stocks were the flavor of the week. The market logged gains for the third straight week on sustained buying by foreign funds.

The BSE 30-share Sensex rose 31.06 points or 0.16% to 19,451.45 in the week ended Friday, 8 April 2011. The S&P CNX Nifty was up 15.95 points or 0.27% to 5,842. The BSE Mid-Cap index advanced 2.73% and the BSE Small-Cap index surged 4.96%. Both these indices outperformed the Sensex.

Trading for the week began on an upbeat note as higher auto and cement sales in March 2011, recent strong macroeconomic data and expectations of a normal monsoon this year triggered a rally on Monday, 4 April 2011. The BSE 30-share Sensex was up 281.34 points or 1.45% to 19,701.73 and the S&P CNX Nifty was up 82.40 points or 1.41% to 5,908.45.

The key benchmark indices took a breather on Tuesday, 5 April 2011 after Monday's (4 April 2011)'s rally amid a divergent trend in pivotals. The BSE 30-share Sensex was down 14.91 points or 0.08% to 19,686.82 and the S&P CNX Nifty was up 1.60 points or 0.03% to 5,910.05.

The key benchmark indices dropped in volatile trade on Wednesday, 6 April 2011, as crude oil prices near 2-1/2-year highs triggered profit taking after the market scaled 3-month high at the onset of the trading session. The BSE 30-share Sensex was down 74.62 points or 0.38% to 19,612.20 and the S&P CNX Nifty was down 18.30 points or 0.31% to 5,891.75.

The key benchmark indices edged lower on Thursday, 7 April 2011 as oil prices hovering near 2-1/2-year highs sparked inflation and interest rates worries. The BSE 30-share Sensex was down 21.02 points or 0.11% to 19,591.18 and the S&P CNX Nifty was down 6.05 points or 0.1% to 5,885.70

The market extended losses on Friday, 8 April 2011, on worries over corporate earnings growth. A rally in crude oil prices to 2-1/2-year highs also raised macroeconomic worries as Indian stocks defied higher world stocks. The BSE 30-share Sensex was down 139.73 points or 0.71% to 19,451.45 and the S&P CNX Nifty was down 43.70 points or 0.74% to 5,842.

Among the 30-share Sensex pack, 15 rose while the rest declined during the week.

Index heavyweight Reliance Industries (RIL) declined 1.07% to Rs 1024.25 in the week ended 8 April 2011. RIL was awarded two blocks in the ninth round of oil and gas block auctions held by the government in late March 2011.

India's largest power equipment maker by sales Bhel surged 4.11% to Rs 2200.75 and was the top weekly gainer from the Sensex pack. Bhel expects new order inflows to rise by 10% in the year ending March 2012 from Rs 60507 crore in the year ended March 2011 (FY 2011). Bhel's order book registered a muted growth of 2.48% to Rs 60507 crore in FY 2011 over the year ended March 2010 (FY 2010).

India's largest bike maker by sales Hero Honda Motors gained 3.80%. Hero Honda's total sales rose 24.4% to 5.15 lakh units in March 2011 over March 2010. The monthly sales in March 2011 were record monthly sales.

India's top tractor and utility vehicles maker by sales Mahindra & Mahindra rose 2.49%. The company has reportedly raised prices on most of its models by 1.5% to 2% to offset higher commodity prices.

India's top listed cellular services provider by sales Bharti Airtel advanced 1.89%. The company reached 2 million customers on its third-generation (3G) mobile network. Bharti had launched its India 3G network in January 2011.

India's largest state run bank by net profit and branch network State Bank of India (SBI) rose 2.19%. Pratip Chaudhuri has taken over as the new chairman of State Bank of India the state-run bank said late on 7 April 2011. Chaudhuri, 57, has been working with State Bank for 37 years and takes over from O.P. Bhatt. Before taking up the top role, Chaudhuri was deputy managing director in the international banking division of the bank.

India's largest steel maker by sales Tata Steel rose 0.65%. The company said on 8 April 2011 sales from its Indian operations rose 4% to 6.41 million tonnes in the year ended March 2011 (FY 2011) over the year ended March 2010 (FY 2010). Indian operations account for about a quarter of the group's total annual global capacity of about 30 million tonnes, which includes unit Corus, Europe's second-largest steelmaker. The company's crude steel production in India stood at 6.86 million tonnes for the FY 2011 up 4.4% over FY 2010, Tata Steel said.

India's largest realty firm by sales DLF lost 4.37% to Rs 259.45 on profit taking and was the top weekly loser from the Sensex pack.

India's largest thermal power generator by sales NTPC fell 2.78%. Provisional net profit rose 24.17% to Rs 2505.42 crore on 17.74% rise in net sales to Rs 14488 crore in Q4 March 2011 over Q4 March 2010.

India's merchandise exports rose 49.7% to $23.5 billion in February 2011 from February 2010, according to provisional data issued on 1 April 2011 by the Ministry of Commerce. The government didn't give any reasons for the growth in exports. Imports rose 21.2% to $31.7 billion, largely due to a rise in non-oil imports, which were up 31% from a year earlier to $23.4 billion. Oil imports in February fell 0.3% to $8.21 billion. India's February trade deficit narrowed to $8.1 billion from $10.4 billion a year earlier, the data showed. Oil imports during April to February, the first 11 months of the just-ended fiscal year 2011, rose 12.4% to $88.1 billion, while non-oil imports rose 20.4% to $217.1 billion.

A survey showed on 1 April 2011 that the strong pace of expansion in India's manufacturing sector steadied in March 2011, helped by sustained new orders and output, while input prices were at their highest in at least six years, signalling further inflationary pressures. The HSBC Markit Purchasing Managers' Index, based on a survey of around 500 companies, was unchanged at 57.9 in March 2011 from February 2011, the highest since November 2010.

The food price index rose 9.18% and the fuel price index climbed 13.13% in the year to March 26, government data on 7 April 2011 showed. In the previous week, annual food and fuel inflation stood at 9.50% and 13.13%. The primary articles price index was up 12.97% compared with an annual rise of 12.98% a week earlier.

A recent global investor survey by Franklin Templeton has found that half of respondents plan to invest outside their home country in 2011. Respondents in India are optimistic about the domestic stock market performance being better than the global counterparts. 82% of respondents in India think that Indian stock market will do better than the rest of the world over the next 10 years.

Standard & Poor's Ratings Services said on 6 April 2011 that it had affirmed the 'BBB-' long-term and 'A-3' short-term unsolicited sovereign credit ratings on India. The outlook on the long-term rating is stable, it said. The ratings on India reflect the country's good economic growth prospects and its fairly strong external position. Positive investment trends further underpin the ratings, with foreign direct investment and portfolio investments covering a large share of the current account deficit. Nevertheless, the country's weak fiscal profile and structural problems temper its strengths. Structural problems not only constrain efficiency but also preclude a large share of the population from benefiting from the country's rising prosperity, it added.

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

On the political front, an estimated 75% voters reportedly exercised their franchise during the first phase of assembly polls in Assam on 4 April 2011 in 62 of the 126 assembly constituencies. The second and concluding phase of elections will be held on 11 April 2011 in the remaining 64 constituencies.

Assam elections will be followed by elections in Tamil Nadu, Puducherry, West Bengal and Kerala in two months between April and May. While Assam will have two-phased poll, Tamil Nadu, Kerala and Puducherry in one phase and West Bengal in six phases ending on 10 May 2011. The vote count is scheduled for 13 May 2011 for elections held in all the five states.

In global economic action, China's central bank raised interest rates on 5 April 2011 for the fourth time since October in a bid to bring stubbornly high inflation under control. Benchmark one-year deposit rates will be lifted by 25 basis points to 3.25% and one-year lending rates will be raised by 25 basis points to 6.31%, the People's Bank of China said in a statement. The rise took effect from 6 April 2011.

The Bank of England on 7 April 2011 held interest rates at 0.5% as fears over a sluggish economic recovery outweighed inflation concerns. However, the European Central Bank hiked interest rates from 1% to 1.25% - the first time it has raised rates in nearly three years, after Portugal became the third country to request an European Union bail out.

Meanwhile, the Bank of Japan said 7 April 2011 that its policy board unanimously voted to keep its overnight call rate range from zero to 0.1%, and it also established a special lending facility for financial institutions in areas hit by the 11 March 2021 earthquake and tsunami.

The International Monetary Fund on 7 April 2011 warned that the global economy was entering a period of scarcer oil that could drive prices up rapidly. In new analysis by the Washington-based global financial institution, the IMF said market tensions were increasing between growing demand for oil from fast-growing emerging market economies, like China, and production constraints due to maturing oil fields.