Market snaps eight day winning streak; breadth strong

The key benchmark indices settled with small losses in a volatile trading session as profit booking emerged after recent strong gains. The broad market depicted strength. The BSE 30-share Sensex was down 24.83 points or 0.13% to 19,420.39, up 38.04 points from the day's low and off 142.16 points from the day's high. The market breadth was strong, supported by data strong manufacturing in March 2011, higher auto sales in the month just gone by and surge in merchandise exports in February 2011. The market sentiment was firm on data showing recent heavy buying by foreign funds and on firm world stocks.



Prior to today's fall, the Sensex had gained 1,606.17 points or 9% in eight trading days to 19,445.22 on 31 March 2011 from its close of 17,839.05 on 21 March 2011, on the back of heavy buying by foreign funds.

Coming back to today's trade, small-cap and mid-cap stocks were in demand extending last month's gains. Shares of Reliance Anil Dhirubhai Ambani (ADA) group firms rose on renewed buying. 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. Auto stocks were mixed in reaction to March 2011 monthly sales figures. Interest rate sensitive realty shares edged higher on fresh buying. IT pivotals took a breather on profit booking. Banking pivotals were mixed. Index heavyweight Reliance Industries (RIL) dipped in the red after early rise. ITC struck a record high today, 1 April 2011.

State-run oil marketing companies fell as crude prices spiked to a 2-1/2-year highs. Fertiliser shares rose on recent reports demand for fertiliser in India may climb 4% this monsoon season as India seeks to boost output of essential commodities to curb prices. Sugar shares rose after the government raised quotas on stockholding of sugar for traders and wholesale dealers.

Inflow from foreign funds totaled Rs 8548.14 crore in eight trading sessions from 22 March 2011 to 31 March 2011 as per data from the stock exchanges.

Trading for the new financial year 2011-2012 (FY 2012) began on an upbeat note with data showing heavy buying by foreign funds recently boosting sentiment. The market soon reversed direction in volatile trade. The Sensex regained positive zone in mid-morning trade. The market swung between gains and losses in mid-morning trade.

The key benchmark indices regained positive zone after hitting fresh intraday lows in mid-morning trade, supported by data showing strong manufacturing in March 2011 and on higher sales by car major Maruti Suzuki in the month just gone. The market once again slipped into the red later. Volatility ruled the roost as the key benchmark indices slipped into the red soon after a rebound in mid-afternoon trade. The market recovered from the day's low in late trade.

Due to merger of settlements on account of bank holiday for Gudi Padwa festival on Monday, 4 April 2011, 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 down 24.83 points or 0.13% to 19,420.39. The index gained 117.33 points at the day's high of 19,562.55 in early trade. The Sensex fell 62.87 points at the day's low of 19,382.35 in mid-afternoon trade.

The S&P CNX Nifty was down 7.70 points or 0.13% to 5,826.05.

The market breadth, indicating the health of the market, was strong. On BSE, 2194 shares advanced while 712 shares declined. A total of 86 shares remained unchanged.

The BSE Mid-Cap index was up 1.59% and the BSE Small-Cap index was up 2.23%. Both these indices outperformed the Sensex. The BSE Mid-Cap index had surged 500.17 points or 7.84% to 6,873.40 and the BSE Small-Cap index had risen 358.57 points or 4.58% to 8,175.89 in March 2011. Both these indices had underperformed the Sensex in that month.

The total turnover on BSE amounted to Rs 2945 crore, lower than Rs 3227 crore on Thursday.

Most sectoral indices on BSE logged gains. The BSE Realty (up 2.60%), the BSE Metal (up 1.15%), and the BSE Power (up 0.93%), outperformed the Sensex. The BSE Bankex (down 0.83%), the BSE Oil & Gas (down 0.59%), and the BSE IT (down 0.47%), underperformed the Sensex.

Among the 30-member Sensex pack, 16 gained while the rest declined.

Index heavyweight Reliance Industries (RIL) declined 1.24% to Rs 1034.80, off day's high of Rs 1065.55 and low of Rs 1022.95. Early this week, RIL was awarded two blocks in the ninth round of oil and gas block auctions held by the government.

India's largest oil exploration firm ONGC rose 1% on recent reports a consortia led by ONGC won 10 blocks in the ninth round of oil and gas block auctions closed on Monday.

GAIL (India) fell 0.44%. During market hours today, 1 April 2011, the company said that the Petroleum Minister has launched Asia's first integrated gas management system at GAIL (India).

State-run oil marketing companies (PSU OMCs) fell as crude prices spiked to a 2-1/2-year highs, boosted by worries a protracted conflict in OPEC member Libya could keep its oil exports shut. HPCL (down 1.88%), Indian Oil Corporation (down 0.94%) and BPCL (down 0.38%), declined.

Higher crude oil prices could increase under-recoveries of state-run oil marketing companies (PSU OMCs) on domestic sale of diesel, LPG and kerosene at controlled prices. The government has already freed pricing of petrol.

Infrastructure stocks saw mixed trend. India's largest dam builder by sales Jaiprakash Associates jumped 3.78% to Rs 96 and was the top gainer from the Sensex pack.

India's top power equipment maker by sales Bharat Heavy Electricals (Bhel) rose 2.15%. 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 largest engineering and construction firm by sales Larsen & Toubro (L&T) shed 0.32%. L&T Finance Holdings, a subsidiary L&T, plans an initial public offering (IPO) of equity shares for an amount aggregating to Rs 1750 crore and has filed a draft red herring prospectus (DRHP) with Securities & Exchange Board of India.

India's largest power generation firm by capacity NTPC lost 2.10% to Rs 188.95 and was the top loser from the Sensex pack. The stock slipped on profit booking after advancing 11.56% in the preceding eight sessions to Rs 193 on 31 March 2011 from a recent low of Rs 173 on 21 March 2011. After market hours on Thursday, 31 March 2011, NTPC said unit number 3 of 500 megawatt of Simhadri Super Thermal Power Project has been commissioned on 31 March 2011. With this, the total capacity of NTPC group has become 34,194 megawatt

India's top small car maker by sales Maruti Suzuki India rose 0.68% after total sales rose 28.2% to 1.21 lakh units in March 2011 over March 2010. Total sales rose 24.80% to 12.71 lakh units in the year ended March 2011 (FY 2011) over the year ended March 2010.

India's top truck maker by sales Tata Motors was down 0.29%. The company's total sales rose 11% to 83,363 units in March 2011 over March 2010. Domestic sales rose 9% to 77431 units in March 2011 over March 2010 while exports jumped 45% to 5932 units. Sales of commercial vehicles increased 15% to 49753 units while passenger vehicle sales declined 1.1% to 29,543 units.

India's largest tractor maker by sales Mahindra & Mahindra (M&M) advanced 1.92% after total sales in the automotive segment rose 18.37% to 37,522 units in March 2011 over March 2010.

India's largest bike maker by sales Hero Honda Motors rose 0.72%, extending eight day 10.65% rally. Hero Honda Motors said Toshiaki Nakagawa, joint managing director and Sumihisa Fukuda, technical director of the company have resigned from the board of directors with effect from 22 March 2011. India's second largest bike maker by sales Bajaj Auto shed 0.12%.

TVS Motor Company surged 2.83% as the company's total vehicle sales rose 28% to 1.91 lakh units in March 2011 over March 2010. The company unveiled the monthly sales figures during trading hours today, 1 April 2011.

Shares of Reliance Anil Dhirubhai Ambani (ADA) group firms rose on renewed buying. India's second largest listed cellular services provider by sales Reliance Communications surged 3.67%

Idea Cellular rose 0.15%. The company today said Himanshu Kapania has taken over as the Managing Director of the company effective 1 April 2011, pursuant to relinquishment of office of Managing Director by Sanjeev Aga.

Power generation major Reliance Infrastructure rose 0.63%, extending five-day 8.19% rally. 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.

Reliance Capital (up 5.62%), Reliance Broadcast Network (up 8.30%), Reliance MediaWorks (up 12.50%), and Reliance Power (up 2.08%), also rose.

Most banking pivotals edged lower on profit booking after recent gains. India's largest private sector bank by net profit ICICI Bank declined 0.97%. India's second largest private sector bank by net profit HDFC Bank rose 0.10%

India's largest bank by net profit and branch network State Bank of India (SBI) fell 1.69%, extending Thursday's 3.19% slide. The stock slipped on continued profit booking after spurting 10.70% in seven days to 30 March 2011.

India's largest cigarette maker by sales ITC rose 0.85% to Rs 183 after striking a record high of Rs 184.80 during the day.

IT pivotals took a breather on profit booking. India's third largest software services exporter Wipro lost 0.65%. India's second largest software services exporter Infosys shed 0.37%. 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 on 15 April 2011.

India's largest software services exporter TCS was unchanged at Rs 1182.75. During market hours today, TCS said it will provide end-to-end application development and maintenance services to Air Liquide in the Americas.

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. LMEX, a gauge of six metals traded on the London Metal Exchange, rose 0.68% on Thursday, 31 March 2011.

Tata Steel (up 0.73%), Sesa Goa (up 2.44%), Sail (up 0.06%), JSW Steel (up 3.46%), Nalco (up 0.63%), Jindal Steel and Power (up 0.16%), edged higher. India's largest non-ferrous metal firm by capacity Sterlite Industries (India) was unchanged at Rs 173.35

India's largest aluminium maker by sales Hindalco Industries advanced 2.31%. After market hours on Thursday, 31 March 2011, Hindalco Industries said it successfully achieved financial closure of a large greenfield aluminium project in Madhya Pradesh with the signing of common rupee loan agreement for Rs 7875 crores on 30 March 2011. This constitutes the entire debt requirement of the project. The facility has a door to door tenor of 12.75 years.

Interest rate sensitive realty shares edged higher on fresh buying. DLF (up 1.64%), Unitech (up 3.46%), Parsvnath Developers (up 0.66%), HDIL (up 3.30%), Orbit Corporation (up 4.88%), Indiabulls Real Estate (up 6.47%), rose.

Sugar shares rose after the government raised quotas on stockholding of sugar for traders and wholesale dealers. Bajaj Hindusthan (up 6.60%), Simbhaoli Sugar Mills (up 6.18%), Shree Renuka Sugar (up 4.81%), Sakthi Sugars (up 4%), Balrampur Chini Mills (up 3.28%), Triveni Engineering and Industries (up 2.19%) and EID Parry (India) (up 2.57%), rose.

Fertiliser shares rose on recent reports demand for fertiliser in India may climb 4% this monsoon season as India seeks to boost output of essential commodities to curb prices. Zuari Industries (up 5.37%), Deepak Fertilisers and Petrochemicals Corporation (up 4.60%), Chambal Fertilisers and Chemicals (up 3.94%), Coromandel International (up 5.91%), Nagarjuna Fertilizers & Chemicals (up 2.66%), Rashtriya Chemicals and Fertilizers (up 3.27%), National Fertilizers (up 1.48%), Tata Chemicals (up 2.91%) and GSFC (up 4.86%), edged higher.

India's fertiliser demand is estimated to be 4% higher at 28.8 million tonnes in the ensuing Kharif (summer) season starting June 2011, as against 27.7 million tonnes in the year-ago period. Kharif crops are sown with the beginning of the south-west monsoon in June.

ACC rose 1.66%. After market hours on Friday, 1 April 2011, the company said cement production rose 12.88% to 2.19 million tonnes in March 2011 over March 2010. Dispatches rose 12.37% to 2.18 million tonnes.

State Bank of India was the top traded counter on BSE with turnover of Rs 133.79 crore followed by Reliance Capital (Rs 73.63 crore), Tata Coffee (Rs 72.91 crore), Delta Corp (Rs 68.19 crore), and Hindustan Oil Exploration (Rs 68.04 crore).

Suzlon Energy clocked highest volume of 1.20 crore shares on BSE. Cals Refineries (1.10 crore shares), Delta Corp (83.16 lakh shares), Birla Power Solutions (77.55 lakh shares), and SpiceJet (63.52 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 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.

Meanwhile, the National Stock Exchange (NSE) has reduced lot size on derivative contracts of Hexaware Technologies, Hindalco Industries, Orchid Chemicals & Pharmaceuticals, Siemens, Hindustan Zinc, Ispat Industries, Karnataka Bank, LIC Housing Finance and Sun Pharmaceuticals.

The NSE has simultaneously increased lot size on derivative contracts of 73 stocks including Central Bank of India, Hindustan Construction Company, Housing Development And Infrastructure, Hero Honda Motors, Hindustan Petroleum Corporation, India Cements, Indian Oil Corporation, IRB Infrastructure, Jaiprakash Associates, Kingfisher Airlines, Larsen & Toubro, NTPC, Reliance Infrastructure, Steel Authority of India, Tata Chemicals, Tata Global Beverages, Tata Motors and Unitech.

India's merchandise exports rose 49.7% to $23.5 billion in February 2011 from February 2010, according to provisional data issued Friday 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 Friday 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.

Prime Minister Manmohan Singh said on Thursday the government will deal with the challenge of high inflation driven by rising oil, food and commodity prices because of political upheavals and natural disasters in some countries. He stated that the government wanted to manage inflation without disturbing the growth momentum. "I am hopeful of seeing lower levels of inflation in the coming months," he said. The Prime Minister also said the tax and financial sector reforms were on government agenda and the government would raise resources through sale of equity in the public sector firms. The government is expected to raise Rs 40000 crore in the year ending March 2012 through sale of stake in state-run firms.

India imports majority of its crude oil requirements and a surge in crude oil prices over the past few months 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. US crude futures up 47 cents a barrel or 0.44% at $107.19 a barrel.

The government on Thursday 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.

European stocks were trading firm on Friday, rebounding from the prior session's losses with support coming from the financial sector. The key benchmark indices in France, Germany and UK gained by between 0.72% to 0.95%.

Asian stocks rose after a survey showed manufacturing accelerated in China in March 2011. The key benchmark indices in Hong Kong, Taiwan, South Korea, Singapore, Indonesia and China were up by between 0.25% to 1.33%. Japan's Nikkei 225 shed 0.48%.

US stocks closed lower after a late slide Thursday but still managed to finish with their best first quarter in more than a decade. The Dow Jones Industrial Average was down 30.88 points, or 0.3%, at 12319.73. The S&P 500 edged down 2.43 points, or 0.2%, to 1325.83 and the Nasdaq Composite added 4.28 points, or 0.2%, to 2781.07.

In US economic news, initial jobless claims fell by 6,000 to 388,000 in the week ended 26 March 2011, more than analysts' expectations for a decline to 380,000 claims. Other reports showed US factory orders unexpectedly fell 0.1% in February after a 3.3% gain in January. Besides, the Institute for Supply Management-Chicago Inc's business barometer fell in March.

Data on the Labor Department's report on US non-farm payrolls in March due to be released today, 1 April 2011, will be closely watched.

Trading in US index futures indicated that the Dow could rise 44 points at the opening bell on Friday, 1 April 2011.