BSE Small-Cap, Mid-Cap indices slide

Key benchmark indices edged higher in volatile trade, buoyed by European policy makers' efforts to support European countries struggling with debt. Good monsoon rains also aided sentiment. Fears of muted-to-weak Q2 September 2011 corporate earnings capped gains. The market declined in three out of five trading sessions during the week.

Stocks were volatile as traders rolled over positions in the futures & options (F&O) segment from September 2011 series to October 2011 series. The September 2011 derivatives contracts expired on Thursday, 29 September 2011.



Monsoon rains were 2% above average till 28 September 2011. India is aiming for record foodgrain output of more than 245 million metric tonnes this crop year that began on July 1, as well as bumper cotton, sugarcane and other crops. A good monsoon season can typically boost rural farm incomes and have an impact on the wider economy through increased spending on consumer goods as well as reduced prices of food items.

Germany's approval of the beefed-up bailout fund with much stronger support than expected in the Bundestag (lower house of parliament) on 29 September 2011 provided sigh of relief to world markets worried about Berlin's commitment to resolving the debt crisis. The bill's passage by Europe' biggest economy allows euro-area officials to weigh further measures to bolster Greece.

The BSE Sensex rose 291.70 points or 1.8% to settle at 16,453.76 in the week ended Friday, 30 September 2011. The 50 share S&P CNX Nifty gained 75.50 points or 1.55% to 4,943.25.

The BSE Mid-Cap index shed 1.5% and the BSE Small-Cap index dropped 2.27%. Both these indices underperformed the Sensex.

Trading for the week began on a weak note. Key benchmark indices dropped for the fourth day in a row on Monday, 26 September 2011, to one-month closing lows as fears of weak Q2 September 2011 results and data showing heavy selling by foreign funds recently, weighed on investor sentiment. The BSE Sensex shed 110.96 points or 0.69% to settle at 16,051.10, its lowest closing level since 26 August 2011.

Media reports that the finance ministry is considering some tax cuts on equities to lower transaction costs and broaden participation in the market helped the market snap 4-day losing streak on Tuesday, 27 September 2011. A rally in world stocks triggered by reports that European policy makers are considering new plans to support European countries struggling with debt, aided rally on domestic bourses. The BSE Sensex jumped 472.93 points or 2.95% to settle at 16,524.03, its highest closing level since 21 September 2011.

Key benchmark indices edged lower amid intraday volatility on Wednesday, 28 September 2011. The BSE Sensex lost 78.01 points or 0.47% to settle at 16,446.02, its lowest closing level since 26 September 2011.

Key benchmark indices attained their highest closing level in more than a week on Thursday, 29 September 2011, supported by firm global stocks and higher US index futures. The BSE Sensex jumped 252.05 points or 1.53% to settle at 16,698.07, its highest closing level since 21 September 2011.

Key benchmark indices edged lower on Friday, 30 September 2011 as world stocks fell. The BSE Sensex lost 244.31 points or 1.46% to 16,453.76, its lowest closing level since 28 September 2011.

From the 30-share Sensex pack, 18 stocks rose and 12 fell, during the week.

Shares of Bharti Airtel, India's largest listed cellular services provider by sales gained 0.87%. Telecommunication minister Kapil Sibal said he will push the government to consider offering infrastructure status to the telecom tower segment. Bharti Airtel runs telecom towers business under its arm Bharti Infratel. Sibal said the telecom towers industry is unlikely to get the required resources, unless it is treated as infrastructure sector and unless banks give loans on a priority lending basis.

Index heavyweight Reliance Industries (RIL) jumped 4.87%. BP PLC on Wednesday, 28 September 2011, said it expects its partnership with RIL to boost natural gas output at the D6 block in the Krishna Godavari basin, off India's east coast. BP Chief Executive Robert Dudley and RIL Chairman Mukesh Ambani met trade minister Anand Sharma in New Delhi on Wednesday, 28 September 2011.

RIL is fighting a decline in gas output at the D6 block. BP and RIL on Wednesday, 28 September 2011, pitched for permission from the government to develop satellite fields adjacent to the D6 block. RIL, last month, closed a deal with UK-based BP to sell a 30% stake in its 21 oil and gas exploration blocks in India. RIL recently denied inflating costs on its D6 gas field in the Krishna-Godavari (KG) basin. RIL made the clarification after CAG said in its final report submitted to the parliament on Thursday, 8 September 2011, that RIL initially estimated capital expenditure of D-1 and D-3 gas discovery at $2.4 billion, which it later revised to $8.8 billion.

RIL, owner of the world's biggest refining complex, last week, said it is planning to take Maintenance and Inspection (M&I) shutdown of Light Cycle Oil hydrocracker (LCOHC) and Vacuum Gas Oil hydtrotreating unit (VGOHT) of SEZ refinery at Jamnagar refinery complex from 19 to 23 September 2011 respectively. These maintenance shutdowns will be for a period of approximately 4 weeks, RIL said. The routine shutdown of these units is being planned for the first time since commissioning. Both the refineries at Jamnagar complex are planned to operate at maximum crude processing capacity i.e. 1.3 million barrels per day during this period. All other major processing units at the complex are also planned to operate at normal capacity, RIL said.

RIL's advance tax payment rose 37.6% to Rs 1800 crore in Q2 September 2011 over Q2 September 2010, hinting at good Q2 results from the diversified firm.

India's largest oil exploration firm by market capitalisation ONGC rose 3.06%. The company's board gave its nod to Cairn Energy PLC's proposal to sell a majority stake in its Indian unit to miner Vedanta Resources PLC. The ONGC board approved the transaction on condition that both Cairn and Vedanta agree to share royalties on crude oil output from a joint venture block in Rajasthan, and withdraw a tax arbitration case.

ONGC owns a 30% stake in India's largest onshore oil find in Rajasthan state, where Cairn India is the operator with a 70% holding. Despite owning a 30% stake in the Rajasthan field, ONGC has been paying the entire royalty on production.

Shares of state-run coal giant Coal India slumped 9.13% and was the top loser from the Sensex pack. Union Cabinet approved new mining bill that calls for coal miners to share a maximum 26% of their profits with local communities and for other miners to share an amount equivalent to royalties. The new mining bill now requires parliamentary approval to become law and is seen as a major move towards reform.

Metal stocks fell as HSBC's China manufacturing sector data showed that manufacturing sector continued to stagnate in China in September 2011 amid weak domestic and overseas demand. China is the world's largest consumer of aluminum and copper. Jindal Steel & Power declined 4.16%.

India's largest private sector steel maker by sales Tata Steel fell 3.94% to Rs 415.25. The stock hit a 52-week low of Rs 414.20 on Friday, 30 September 2011.

India's largest non-ferrous metals producer Sterlite Industries (India) lost 7.21% to Rs 113.85. The stock hit a 52-week low of Rs 113 in intraday trade on Friday, 30 September 201.

India's largest private sector aluminium maker by sales Hindalco Industries dropped 2.12% to Rs 131.30. The stock dived to a 52-week low of Rs 125 in intraday trade on Monday, 26 September 2011.

Interest rate sensitive banking stocks were mixed. India's largest private sector bank by net profit ICICI Bank rose 3.63%. India's second largest private sector bank by net profit HDFC Bank gained 2.1%. India's largest bank by branch network and net profit State Bank of India (SBI) shed 2.27%.

India's largest small car maker by sales Maruti Suzuki India declined 0.47%. The company has reportedly lost about Rs 600 crore in vehicle production in a month as labor unrest at one of its factories hit output of three of its key car models. However, Maruti expects to make up for the production loss in a few weeks, reports added.

India's largest tractor maker by sales Mahindra & Mahindra rose 3.38%. The company launched a new global sport utility vehicle XUV500, at a starting price of Rs 10.80 lakh ex-showroom Delhi.

India's largest commercial vehicle maker by sales Tata Motors rose 5.9%. A single judge Bench of Calcutta High Court on Wednesday, 28 September 2011, ruled that the Singur Land Rehabilitation and Development Bill 'is constitutionally legal'. Justice Indra Prasanna Mukherjee held that the act was framed under the provision of the constitution. Tata Motors had moved the high court challenging the constitutional legality of the Bill which was passed by the West Bengal state government to take back the land from Singur, leased out to Tata Motors to set up a small car factory.

Tata Motors said in a statement on Wednesday that it will study the judgment and decide its next course of action.

Two-wheeler makers fell on worries higher interest rates and the latest petrol price hike may adversely impact sales during the festive season. The timing of the latest petrol price hike has been bad for auto firms. The festive season started early this month and it will last until Diwali, the festival of lights, at the end of October 2011. Hero MotoCorp fell 4.7% and Bajaj Auto declined 0.75%.

India's largest engineering and construction firm by order book L&T declined 6.48% to Rs 1358.20. The stock had hit 52-week low of Rs 1,350 in intraday trade on Thursday, 29 September 2011.

India's largest power equipment maker by sales Bhel rose 2.34%. The company has set 4 October 2011 as the record date for a 5-for-1 stock split.

Software pivotals gained on the back of good financial performance from Accenture PLC, the world's second-largest technology consulting company. India's second largest software services exporter Infosys jumped 8.28%. India's largest software services exporter TCS rose 4.65%. India's third largest software services exporter Wipro gained 0.56%.

Diversified Jaiprakash Associates gained 7.85% on expectations of pick up in infrastructure building activity as monsoon withdraws.

Realty major DLF surged 10.43% and was the top gainer from the Sensex pack. The company has reportedly sold 10.8 acres in Gurgaon to a Dubai-based Indian investor for Rs 280 crore, as part of efforts to reduce its debt burden by a third this fiscal. DLF is also in talks with other non-resident Indian investors to sell another 20 acres in Gurgaon, which is expected to fetch around Rs 400 crore, reports suggest.