Sensex jumps 10.4% in 10 trading sessions on revival of FII inflow

Investors cheered India's emphatic win over Sri Lanka to clinch 2011 Cricket World Cup title over the weekend, sending the key benchmark indices to 3-month highs. Higher auto and cement sales in March 2011, recent strong macroeconomic data and expectations of a normal monsoon this year, aided the rally. Revival of inflow from foreign institutional investors (FIIs) has also boosted sentiment. The BSE 30-share Sensex jumped 281.34 points or 1.45%, up close to 250 points from the day's low and off close to 30 points from the day's high. Today's rally on the domestic bourses was quite broad-based. The market breadth was strong.



From a recent low of 17,839.05 on 21 March 2011, the Sensex has jumped 1,862.68 points or 10.44% in just ten trading sessions.

As per provisional figures, foreign funds bought shares worth Rs 415.28 crore on Friday, 1 April 2011. FII inflow totaled Rs 8,963.42 crore in nine trading sessions from 22 March 2011 to 1 April 2011 as per data from the stock exchanges

Index heavyweight Reliance Industries was firm. India's largest electric equipment maker by sales Bharat Heavy Electricals (Bhel) moved higher on strong provisional results for the year ended March 2011. Auto shares rose following strong March 2011 sales figures. Cement shares rose on robust March 2011 dispatches figures. Bank and infrastructure stocks rose on hopes food inflation will ease if the monsoon turns out to be normal this year. IT pivotals were in demand on recent upbeat economic data in the US, the key market for Indian software exporters.

Reliance Communications, Unitech and D B Realty declined after the Central Bureau of Investigation (CBI) on Saturday, 2 April 2011, filed a charge-sheet against three officials of the Anil Dhirubhai Ambani (ADA) Group, Unitech managing director Sanjay Chandra, D B Realty's former chief Shahid Balwa and its managing director Vinod Goenka, former telecom minister A Raja, his aide RK Chandolia, and former telecom secretary Siddharth Behura, with respect to 2G spectrum scam.

The market opened on a firm note on higher Asian stocks. The market pared gains in morning trade as rise in crude oil prices raised inflation and interest rate worries. The market regained strength in mid-morning trade. The market surged to 12-week high in early afternoon trade. The market extended initial gains to hit fresh 12-week highs in afternoon trade. The market pared gains later. The market regained strength in mid-afternoon trade with the 50-unit S&P CNX Nifty striking fresh 12-week high. The key benchmark indices extended gains in late trade to hit their highest level in more than 12 weeks

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 up 281.34 points or 1.45% to 19,701.73, its highest closing level since 6 January 2011. The Sensex surged 309.21 points at the day's high of 19,729.60 in late trade. The Sensex rose 28.97 points at the day's low of 19,449.36 in mid-morning trade.

The S&P CNX Nifty was up 82.40 points or 1.41% to 5,908.45, its highest level closing level since 6 January 2011. The Nifty struck an intraday high of 5,918.70.

The BSE Mid-Cap index rose 1.67% and the BSE Small-Cap index rose 2.83%. Both these indices outperformed the Sensex.

All the sectoral indices on BSE were in the green. The BSE Capital Goods index (up 2.38%), BSE IT (up 2.18%), BSE Teck index (up 1.84%), BSE Auto index (up 1.83%), BSE Bankex (up 1.78%), outperformed the Sensex. The BSE Realty index (up 0.29%), BSE Healthcare (up 0.59%), BSE FMCG (up 0.64%), BSE Metal index (up 0.9%), BSE Oil & Gas (up 1.18%), BSE Consumer Durables (up 1.19%), BSE PSU index (up 1.42%) and BSE Power index (up 1.44%) underperformed the Sensex.

The total turnover on BSE amounted to Rs 3195 crore higher than Rs 2,964.24 crore on Friday, 1 April 2011.

The market breadth, indicating the health of the market, was quite strong. On BSE, 2456 shares advanced while 471 shares declined. A total of 62 shares remained unchanged.

Among the 30-member Sensex pack, 23 gained while the rest of them declined.

Index heavyweight Reliance Industries (RIL) surged 1.41% to Rs 1049.85 as refining margins are seen rising on the back of higher crude oil prices. The stock moved between a high of Rs 1053.80 and low of Rs 1029.05 in the day. RIL, last week, bagged two blocks in the ninth round of oil and gas block auctions held by the government.

Oil marketing companies declined after crude oil prices hit 2-1/2-year highs. Hindustan Petroleum Corporation (HPCL), Bharat Petroleum Corporation (BPCL) and Indian Oil Corporation (IOC) fell by between 0.13% to 1.5%. Higher crude oil prices will increase 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.

Auto shares rose on strong March 2011 sales figures. India's largest utility vehicles and tractor maker by sales Mahindra & Mahindra (M&M) spurted 4.75% to Rs 743.85 and was the top gainer from the Sensex pack. Total sales rose 19.9% to 57,370 in March 2011 over March 2010. Tractor sales rose 22.8% to 19,848 units and automotive sales rose 18.4% to 37,522 units. The tractor segment posted its highest-ever domestic sales in March 2011.

India's largest bike maker by sales Hero Honda Motors gained 0.98% as the company's total sales rose 24.4% to 5.15 lakh units in March 2011 over March 2010. The stock extended nine-day 11.78% rally. Hero Honda's monthly sales in March 2011 were record monthly sales.

India's top small car maker by sales Maruti Suzuki India rose 2.07%, reversing intraday losses on strong sales in March 2011. 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. The company announced the monthly and yearly sales data during trading hours on Friday, 1 April 2011.

India's top truck maker by sales Tata Motors rose 0.92%. 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. The company announced the monthly sales data during trading hours on Friday, 1 April 2011.

India's largest bike maker by sales Bajaj Auto fell 0.13%. The company's total vehicle sales increased 12% to 3.07 lakh units in March 2011 over March 2010. The company announced its March 2011 sales figures during trading hours today, 4 April 2011.

Interest rate sensitive infrastructure stocks rose on hopes food inflation will ease if the monsoon turns out to be normal this year. India's largest engineering and construction firm by sales Larsen & Toubro (L&T) rose 2.37%. L&T Finance Holdings, a subsidiary L&T, last week said it 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 electric equipment maker by sales Bharat Heavy Electricals (Bhel) jumped 2.84% after the company's provisional net profit rose 40% to Rs 6021 crore on 27% rise in turnover to Rs 43451 crore in the year ended March 2011 (FY 2011) over the year ended March 2010 (FY 2010). The provisional result was announced during market hours today, 4 April 2011.

Bhel said a change in accounting policy on provision for warranty obligation for construction contracts boosted profit before tax (PBT) by Rs 414 crore in FY 2011. The change in accounting policy boosted turnover by Rs 2456 crore in FY 2011. Bhel's order book registered a muted growth of 2.48% to Rs 60507 crore in FY 2011 over FY 2010.

India's largest dam builder by sales Jaiprakash Associates spurted 3.25% as the company's cement shipments rose 22% to 1.56 million tonnes in March 2011 over March 2010.

India's largest power generation firm by capacity NTPC rose 0.29%. 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

Banking pivotals advanced across the board on hopes food inflation will ease if the monsoon turns out to be normal this year. India's largest private sector bank by net profit ICICI Bank rose 1.51%. India's second largest private sector bank by net profit HDFC Bank gained 2.78%. India's largest bank by net profit and branch network State Bank of India (SBI) rose 1.58%, halting two-day 4.88% slide.

IT pivotals also rose across the board as IT bellwether Infosys is seen giving a decent to strong guidance on revenue and earnings for the year ending March 2012 (FY 2012) given underlying strong demand for offshore outsourcing. Infosys, India's second largest software services exporter, advanced 2.04%. Infosys unveils Q4 and year ended March 2011 results on 15 April 2011 when it will also gives annual guidance for FY 2012. India's largest software services exporter TCS soared 2.7%

India's third largest software services exporter Wipro surged 0.99% after the company after market hours on Friday, 1 April 2011, said it will acquire the oil and gas information technology practice of US-based Science Applications International Corporation (SAIC) for $150 million (about Rs 670 crore).

SAIC is a $10-billion scientific, engineering and technology applications company. It has a subsidiary in India that operates in Noida and Bangalore. SAIC's oil and gas information technology practice provides consulting, system integration and outsourcing services to global oil and gas majors involved in upstream activities. Wipro will fund the acquisition through internal cash resources. The acquisition entails SAIC's assets in the US and equity in its UK and Indian subsidiaries.

Reliance Communications, Unitech and D B Realty declined after the Central Bureau of Investigation (CBI) on Saturday, 2 April 2011, filed a chargesheet against three officials of the Anil Dhirubhai Ambani (ADA) Group, Unitech managing director Sanjay Chandra, D B Realty's former chief Shahid Balwa and its managing director Vinod Goenka, former telecom minister A Raja, his aide RK Chandolia, former telecom secretary Siddharth Behura with respect to 2G spectrum scam.

Reliance Communications, India's second largest listed cellular services provider by sales, lost 2.24% and was the top loser from the Sensex pack. D B Realty (down 2.32%), and Unitech (down 1.31%), declined.

Reliance Telecom, a unit of Reliance Communications (RCom), clarified today, 4 April 2011, that as part of ongoing investigations in relation to the entire telecom sector in India, certain preliminary charges were filed on Saturday, 2 April 2011 in a court by the CBI against three group executives namely, Gautam Doshi, Surendra Pipara and Hari Nair. The company said that all the three executives deny all charges and will defend themselves in the appropriate legal proceedings.

Reliance Telecom said these preliminary charges have no impact on the business, operations and licences of Reliance Telecom and are not connected in any manner to any other of Reliance Anil Dhirubhai Ambani (ADA) group's listed firms.

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. Hindalco Industries, Hindustan Zinc, Tata Steel, Sail, JSW Steel, Nalco and Jindal Steel and Power gained by between 0.66% to 3.24%.

India's largest non-ferrous metal firm by capacity Sterlite Industries (India) shed 0.37%. The company has announced appointment of Mahendra Singh Mehta as the Chief Executive Officer (CEO) consequent to transfer of R Kishore Kumar as CEO for Africa operations which includes the newly acquired zinc assets in Namibia and Ireland. The company's board has also approved appointment of Din Dayal Jalan as the Chief Financial Officer with immediate effect.

Cement shares rose after cement manufacturers posted higher dispatches in March 2011 due to pick-up in construction activity. ACC rose 2.33% after dispatches grew by 12.4% to 2.18 million tonnes (mt) in March 2011 over March 2010, aided by capacity addition. Ambuja Cements rose 1.09% after dispatches rose 5.1% to 2.05 mt in March 2011 over March 2010.

UltraTech Cement gained 0.97% after dispatches grew modestly by 2.2% to 3.78 mt in March 2011 over March 2010.

Private sector utility firm Tata Power Company rose 1.57%. The company said on Friday, 1 April 2011, that it will stop supplying electricity to Reliance Infrastructure and divert the 200 megawatts the company provided to its rival to its own consumers from now.

Reliance Infrastructure fell 0.3%. Reliance Infrastructure said it has made "adequate arrangements" to meet the requirement of its customers after Tata power said it had stopped supplying electricity to Reliance Infrastructure. Reliance Infrastructure said its consumers "will continue to get uninterrupted and quality power supply." The two companies have been involved in a dispute about the supply of power in the Mumbai city distribution area.

Interest rate sensitive realty shares rose on hopes food inflation will ease if the monsoon turns out to be normal this year. Ackruti City, Sobha Developers, HDIL, Orbit Corporation, Indiabulls Real Estate and Godrej Properties gained by between 0.8% to 2.07%. India's largest realty firm by market capitalization DLF rose 0.09% to Rs 271.55, recovering from day's low of Rs 268.35.

Cigarette maker ITC gained 1.15% to Rs 184.80. The stock scaled a record high of Rs 185 today.

Idea Cellular declined 0.22%. The company announced after market hours today that it is in the process of filing necessary application before the Delhi High Court seeking vacation of the ex-parte stay on amalgamation of Spice Communications with the company. The Department of Telecommunications (DoT) has obtained an ex-parte stay from the Delhi High Court against sanctioning the amalgamation of Spice Communications with the company.

Cals Refineries clocked highest volume of 2.15 crore shares on BSE. Karuturi Global (84.76 lakh shares), Delta Corp (64.89 lakh shares), Lovable Lingerie (64.31 lakh shares) and Resurgence Mines (63.3 lakh shares) were the other volume toppers in that order.

Lovable Lingerie clocked highest turnover of Rs 186.30 crore on BSE. State Bank of India (Rs 88.43 crore), Delta Corp (Rs 57.33 crore), Reliance Industries (Rs 49.20 crore) and Orissa Minerals (Rs 46.25 crore) were the other turnover 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.

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. Crude hit 2-1/2-year high today, 4 April 2011. US crude futures were up 40 cents a barrel or 0.37% at $108.34 a barrel as positive US jobs data reinforced economic growth expectations and as the ongoing conflict in West Asia and the Middle East kept investors worried about supply disruptions.

On the flip side, a good monsoon this year could help ease food inflation and boost rural income. Recent reports indicate that India will receive good rains during the July-September monsoon season this year. The India Meteorological Department (IMD) is expected to come out with its long term forecast of the summer monsoon rainfall season by the end of this month.

Credit rating agency Fitch downgraded India's economic growth projection to 8.3% for the year ending March 2012, from the earlier projected 8.5%, on account of high inflationary pressures that has forced the Reserve Bank of India to hike key rates. The agency, however, kept its projection of growth for the year ending March 2013 unchanged at 8%.

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.

Most European stocks edged higher on Monday, 4 April 2011, on strong US job data. The key benchmark indices in Germany and UK rose 0.07% and 0.23% respectively. France's CAC 40 fell 0.05%.

Asian stocks rose on Monday after a report showed US jobs grew faster than forecast. The key benchmark indices in Hong Kong, Japan and Singapore were up by between 0.11% to 1.46%. The key benchmark indices in Indonesia and South Korea were down 0.20% and 0.24%, respectively. Markets in China and Taiwan were closed for a public holiday.

US stock markets closed higher on Friday as traders welcomed a drop in US unemployment. The Dow Jones Industrial Average rose 56.99 points, or 0.46%, to 12,376.72 points. The S&P 500 index rose 6.58 points, or 0.50%, at 1,332.41 points and the Nasdaq Composite index rose 8.53 points, or 0.31%, at 2,789.60 points.

A US government jobs report showed the US unemployment rate dropped to a two-year low of 8.8% in March 2011 from 8.9% in February 2011. Payrolls grew by 216,000 workers after a 194,000 gain the prior month, the Labor Department said.

Trading in US index futures indicated that the Dow could rise 22 points at the opening bell on Monday, 4 April 2011. US index futures reversed initial fall.

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. Eighty two percent of respondents in India think that Indian stock market will do better than the rest of the world over the next 10 years.