Sensex regains 18,000

The key benchmark indices surged in a volatile trading session on firm global stocks. Bargain hunting emerged after a recent steep slide in share prices. Volatility surged as traders rolled over positions in the derivatives segment from the near-month May 2011 series to June 2011 series, ahead of the expiry of the May 2011 derivatives contracts today, 26 May 2011. The barometer index BSE Sensex regained the psychological 18,000 mark, having alternatively moved above and below that level in intraday trade. The market breadth was positive. The BSE Sensex was up 197.40 points or 1.11%, up close to 180 points from the day's low and off close to 25 points from the day's high.



Index heavyweight Reliance Industries (RIL) jumped close to 3%. ONGC rose over 4% on reports the subsidy share of upstream oil companies for the year ending March 2012 (FY 2012) will be restored to 33% from 38.5% in the year ended March 2011 (FY 2011). PSU OMCs, too, edged higher on hopes of a fuel price hike. Tata Steel surged after reporting turnaround results for the year ended March 2011 (FY 2011). Most other metal stocks gained on firm global commodity prices. IT stocks were mixed. Auto and banking stocks rose on bargain hunting.

The market regained strength soon after paring gains from a firm opening. The key benchmark indices regained strength after hitting fresh intraday lows in morning trade. The market surged to hit fresh intraday high in mid-morning trade. The market pared gains in early afternoon trade. The market held positive zone in afternoon trade. Immense volatility was witnessed in late trade as the key benchmark indices hit fresh intraday highs on firm global stocks.

The BSE Sensex was up 197.40 points or 1.11% to 18,044.64. The index jumped 225.37 points at the day's high of 18,072.61 in late trade. The Sensex rose 15.64 points at the day's low of 17,862.88 in morning trade.

The S&P CNX Nifty was up 63.40 points or 1.19% to 5,412.35.

The market breadth, indicating the health of the market, was positive. On BSE, 1495 shares advanced while 1286 shares declined. A total of 117 shares remained unchanged. The breadth was much stronger earlier in the day.

Among the 30-member Sensex pack, 24 stocks rose while the rest of them fell.

BSE clocked turnover of Rs 2664 crore, lower than Rs 2885.74 crore on Wednesday, 24 May 2011.

Index heavyweight Reliance Industries (RIL) rose 2.92% on reports the government has decided to supply gas at regulated rates only to a few top-priority consumers -- a move that will grant RIL substantial pricing freedom and boost the government's share of revenue from the KG-D6 field when output rises. The new system is being worked out by the government in response to the steep fall in output from Reliance Industries' KG-D6 gas field. The shortfall has prompted the oil ministry to order Reliance to cut supplies to "non-core" sectors such as steel to help power and fertiliser plants get normal supply, report said.

India's largest oil exploration firm by sales ONGC jumped 4.44% on reports the subsidy share of upstream oil companies for the year ending March 2012 (FY 2012) will be restored to 33% from 38.5% in the year ended March 2011 (FY 2011). The ONGC stock had tumbled recently after the government increased the subsidy burden of upstream oil companies on fuel sales to 38.5% from 33% earlier.

ONGC announces its year ended March 2011 results on 30 May 2011. ONGC has reportedly hired a global consultancy firm to come up with a redevelopment plan for the Bombay High oilfield to arrest decline in production.

Cairn India rose 1.4% as the company announced after market hours on Wednesday that consolidated net profit surged 902.4% to Rs 2457.79 crore on 372.99% rise in total income to Rs 3692.83 crore in Q4 March 2011 over Q4 March 2010.

Rahul Dhir, Managing Director and Chief Executive Officer, Cairn India said, "Cairn India's continued focus on safe and efficient operations has helped us to quickly ramp up the Mangala production to 125,000 barrels of oil per day (bopd) and deliver almost 40 million barrels of crude oil to Indian refineries. The successful delivery of the large scale Rajasthan project, the continued focus on life cycle planning and low cost operations in Rajasthan, Ravva and CB/OS-2 along with the application of innovative technologies has created a strong foundation for our future growth. We are therefore, well placed for the exploration drilling campaign in the frontier Mannar Basin in Sri Lanka later this year".

PSU OMCs rose on reports government may hike diesel and cooking fuel prices. BPCL and Indian Oil Corporation gained by between 1.44% to 1.85%. As per reports, a panel of ministers may meet on 9 June 2011 to discuss raising prices of diesel, kerosene and cooking gas. A hike in diesel and cooking fuel prices will improve finances of PSU OMCs.

HPCL rose 0.78%. The company announced after market hours today that net profit rose 48.2% to Rs 1122.66 crore on 26.18% rise in total income to Rs 40083.29 crore in Q4 March 2011 over Q4 March 2010.

IT stocks were mixed. India's second largest software services exporter Infosys fell 0.56% as the stock turned ex-dividend today, 26 May 2011, for final dividend of Rs 20 per share for the year ended March 2011. The IT firm on Tuesday said it had received a subpoena from a grand jury in a US district court that requires the company to provide certain documents and records related the company's sponsorships for and uses of B1 business visas. Infosys said it intends to comply with the subpoena and to cooperate with the investigation.

India's largest software services exporter TCS gained 0.43% in volatile trade.

India's third largest software exporter Wipro fell 0.17%, with the stock falling for the fourth straight day. Wipro Infrastructure Engineering -- a division of company has signed an agreement with Spanish Company CESA for the manufacture of precision engineered components for the aerospace and defence sector. The agreement involves transfer of technology as well as manufacturing workload for aerospace actuators and related precision engineering components from CESA to Wipro. The announcement was made after trading hours on Wednesday.

India's largest steel maker by sales Tata Steel advanced 1.98% on turnaround results for the year ended March 2011 (FY 2011). The company reported consolidated net profit of Rs 8982.69 crore in the year ended March 2011 compared with a net loss of Rs 2099.22 crore in the year ended March 2010. The company's total income rose 15.59% to Rs 119734.10 crore in the year ended March 2011 over the year ended March 2010. The result was announced after trading hours on Wednesday.

With regard to its India operations, Tata Steel said key steel consuming sectors like construction, automotive, infrastructure are showing robust outlook. Steel demand is expected to grow unabated despite near term uncertainty caused by increasing interest rates to tame surging inflation, the steel giant said. With regard to its unit NatSteel, Tata Steel said construction activity continues to expand in Singapore and PMI suggests further growth. World Steel data indicates strong apparent steel demand growth in all countries in which NatSteel operates, it said.

With regard to its unit Tata Steel Thailand, Tata Steel said the Thai economy is on expansion path driven by private domestic spending and exports. The economy is forecasted to grow by 2.5-3.5% in Q1/FY12 and by 3% to 4% in 2011. Projected growth for the key steel consuming sectors in Thailand are: construction 4%, automobile 13% and manufacturing 6%, it said.

With regard to its European unit Tata Steel Europe, the company said European Union (EU) steel consumption has softened as customers delay purchases in anticipation of lower prices. The company said EU import licenses have risen in recent months but recent price falls have closed large gap with Chinese steel prices. European Steel Service Center Strip products stocks are at one of the lowest levels on record at 1.97 months of supply, it said.

Tata Steel said it expects global steel raw material prices to remain at elevated levels, which will provide support to global steel prices.

Most metal stocks rose as LMEX, a gauge of six metals traded on the London Metal Exchange, gained 2.07% on Wednesday, 25 May 2011. Jindal Steel & Power, Sesa Goa, JSW Steel, Hindalco Industries, Sail, Sterlite Industries gained by between 0.82% to 3.45%.

Banking stocks rose on bargain hunting after recent steep losses. India's largest private sector bank by net profit ICICI Bank rose 1.55%. The bank announced on 20 May 2011 that it has successfully priced issue of 5.5 year $1 billion international bond offering. The bonds carry a coupon rate of 4.75%.

India's second largest private sector bank by net profit HDFC Bank gained 0.69%. The bank raised its base rate by 55 basis points (bps) to 9.25% per annum and prime lending rate (PLR) by 50 bps to 17.75% effective 12 May 2011.

India's largest commercial bank by branch network State Bank of India (SBI) rose 0.6%, on bargain hunting after recent steep losses triggered by weak Q4 results. Net profit slumped 98.88% to Rs 20.88 crore on 18.07% rise in total income to Rs 26536.84 crore in Q4 March 2011 over Q4 March 2010. The result was announced on 17 May 2011.

Auto stocks also rose on bargain hunting. India's largest car maker by sales Maruti Suzuki India rose 1.3%. India's top bike maker by sales Hero Honda Motors gained 3.97%.

India's second largest bike maker by sales Bajaj Auto rose 0.58%. Net profit surged 164.89% to Rs 1400.39 crore on 23.54% rise in total income to Rs 4199.97 crore in Q4 March 2011 over Q4 March 2010. Huge extraordinary (EO) income boosted Bajaj Auto's net profit in Q4 March 2011. The company announced the results last week.

India's largest truck maker by sales Tata Motors rose 2.45%. The company announced after market hours today that consolidated net profit jumped 260.7% to Rs 9274 crore on 33.1% growth in revenue (net of excise) to Rs 123133 crore in the year ended March 2011 over the year ended March 2010. The company's board approved a 5-for-1 stock split.

India's largest tractor maker by sales Mahindra & Mahindra (M&M) gained 0.27%, reversing initial losses. The company unveils its year ended March 2011 result on 30 May 2011.

NMDC fell 1.32%. The company today said it has signed a Memorandum of Understanding (MoU) with Legacy Iron Ore Limited (Legacy), Australia to acquire 50% of Legacy enabling NMDC's entry in the Australian resources sector. By this investment, NMDC would expand its geological footprint and position itself for the acquisition of additional mineral assets in iron ore and coal in Australia, NMDC said.

India's largest power equipment maker by sales Bharat Heavy Electricals (Bhel) rose 0.1% to Rs 1,922.90. The stock came off a 52-week low of Rs 1,892. The company's board early this week recommended disinvestment of 5% of the paid up equity capital of the company out of Government of India's shareholding, with reservation of 10% of the issue for employees, subject to the approval of the Government of India. Usually, a large follow-on public offer from a state-run firm is priced at a discount to the ruling market price to attract investors. Government of India holds 67.72% stake in Bhel (as at end March 2011).

India's largest engineering and construction firm by sales Larsen & Toubro's (L&T) rose 2.05%. Shareholders of the firm recently passed the ordinary resolution for transfer of Electrical & Automation Business of the company to a subsidiary or associate company or to any other entity. The board of L&T at its meeting held on 6 April 2011 had approved transfer of the electrical and automation business of the company to a subsidiary or associate company or to any other entity as a going concern. L&T said this restructuring of the business is required so that it is able to realize its full growth potential and participate comprehensively in the growth of the industry.

The electrical and automation business of L&T offers products and solutions in the electrical distribution and industry automation space. This division is a leader in low voltage switchgear market in India. Over the years, the division has extended the portfolio to become an integrated solutions provider for its customers.

Zee Entertainment Enterprises rose 0.88% after the company said Zee Turner and Star Den Media Services have announced a joint venture to combine distribution of their respective channel bouquets in the country. The newly formed company Media Pro Enterprise India is a 50:50 joint venture between Zee Turner and Star Den Media Services Private and would jointly aggregate and distribute channels licensed to Zee Turner and Star Den . Star Den Media Services is an existing 50:50 joint venture between Star India and Den Networks while Zee Turner is an existing 74:26 joint venture between Zee Entertainment Enterprises and Turner International India.

Sanraa Media clocked highest volume of 1.66 crore shares on BSE. Sanghvi Forging & Engineering (1.05 crore shares), Power Finance Corporation of India (94.78 lakh shares), Cals Refineries (76.80 lakh shares) and Resurgence Mines (65.17 lakh shares) were the other volume toppers in that order.

Power Finance Corporation of India clocked highest turnover of Rs 189.52 crore on BSE. State Bank of India (Rs 163.68 crore), Jubilant Food Organosys (Rs 136.95 crore), Sanghvi Forging & Engineering (Rs 132.37 crore) and Tata Steel (Rs 82.16 crore) were the other turnover toppers in that order.

The Q4 March 2011 results announced so far have been a mixed bag. The combined net profit of a total of 2561 companies rose 15.2% to Rs 76782 crore on 23.1% rise in sales to Rs 795437 crore in Q4 March 2011 over Q4 March 2010.

The food price index rose 8.55% in the year to 14 May 2011, government data showed on Thursday, picking up pace from an annual rise of 7.47% a week ago. The gain in food prices will increase pressure on the Reserve Bank of India (RBI) to raise policy rates when it undertakes mid-quarter monetary policy review on 16 June 2011. The fuel price index climbed 12.11%, unchanged from a week earlier. The primary articles price index was up 11.60%, compared with an annual rise of 10.94% a week earlier.

European stock markets edged higher on Thursday, with broker upgrades helping lift the shares of Nobel Biocare Holding AG and Actelion. The key benchmark indices in UK and France were up by between 0.21% to 0.47%. Germany's DAX fell 0.23%.

Asian stocks rose on Thursday led by commodity and consumer related sectors. The key benchmark indices in Singapore, Hong Kong, Indonesia, Japan, South Korea and Taiwan rose by between 0.16% to 2.75%. China's Shanghai Composite slipped 0.24%.

Trading in US index futures indicated that the Dow could gain 23 points at the opening bell on Thursday, 26 May 2011.