Market gains for the third straight day; Nifty above 5000

Key benchmark indices gained for the third straight day to hit more than 2-week highs on firm European stocks and higher US index futures. The 50-unit S&P CNX Nifty index regained psychological 5,000 mark. The BSE Sensex was up 363.38 points or 2.2%, up about 410 points from the day's low and off about 40 points from the day's high. The market breadth was strong. Index heavyweight Reliance Industries (RIL) edged higher.

From the recent low of 16,008.34 on 29 November 2011, the Sensex gained 838.49 points or 5.23% in three trading sessions. The Sensex has slumped 3,662.26 points or 17.85% in calendar 2011. From a 52-week high of 20,664.80 on 3 January 2011, the Sensex has lost 3,817.97 points or 18.47%. From a 52-week low of 15,478.69 on 23 November 2011, the Sensex has risen 1,368.14 points or 8.83%.



Coming back to today's trade, interest rate sensitive banking, realty and auto stocks extended recent gains triggered by hopes a slowing economy could prompt the Reserve Bank of India (RBI) to pause on rate increases this month. IT stocks rose on positive economic data in US and after major central banks on Wednesday moved to tame a liquidity crunch for European banks by providing cheaper dollar funding. Metal stocks reversed initial losses.

The market edged lower in early trade on weak Asian stocks. It edged higher to hit fresh intraday high after hovering between the positive and negative terrain in morning trade. It moved into the positive terrain after slipping into the red from intraday high in mid-morning trade. It surged to hit fresh intraday high in early afternoon trade. Market surged to fresh intraday high in afternoon trade. It extended gains to hit fresh intraday high in mid-afternoon trade. It continued uptrend to hit fresh intraday high in late trade.

Renewed buying by foreign funds in last two days supported upmove. Foreign institutional investors (FIIs) bought shares worth Rs 687.26 crore on Thursday, 1 December 2011, as per the provisional data from the stock exchanges. FIIs had bought shares worth Rs 34.12 crore on Wednesday, 30 November 2011.

The BSE Sensex was up 363.38 points or 2.2% to 16,846.83, its highest closing level since 15 November 2011. The index jumped 405.39 points at the day's high of 16,888.84 in late trade. The index fell 54.79 points at the day's low of 16,428.66 in early trade.

The S&P CNX Nifty was up 113.30 points or 2.29% to 5,050.15, its highest closing level since 15 November 2011. The Nifty hit a high of 5,062.55 and a low of 4,918.40 in intraday trade.

The BSE Mid-Cap index rose 1.43% and the BSE Small-Cap index gained 1.08%. Both these indices underperformed the Sensex.

BSE clocked turnover of Rs 2261 crore higher than Rs 1962.12 crore on Thursday, 1 December 2011.

The market breadth, indicating the overall health of the market, was strong. On BSE, 1763 shares rose and 1036 shares rose. A total of 117 shares were unchanged.

From the 30-share Sensex pack, 29 gained while only one of them declined.

ONGC rose 0.75% after the company during market hours said that it had notified two new discoveries to the Directorate General of Hydrocarbons ( DGH) taking the total number of discoveries this year to 11.

Tata Power Company jumped 6.3% and was the top gainer from the Sensex pack.

Index heavyweight Reliance Industries (RIL) rose 1.54% to Rs 810.80, off the day's low of Rs 786.50. The company after market hours on Monday said it has initiated arbitration proceedings against the government to seek an independent view of a tribunal on the issue of the company's entitlement of recovery of entire costs on KG-D6 gas blocks from the revenue generated from the blocks.

RIL said all the investments in the exploration, development and production of hydrocarbons from KG-D6 were made by RIL and its foreign partners at their own risk, and not by the Government of India (GoI). RIL and its partners are entitled under the production sharing contract (PSC) with the GoI to recover their full costs from the revenues generated by production from the block, RIL said in a statement.

The investment made in KG-D6 production facilities has been only partly recovered and the return on the investment so far is less than the cost of the capital, RIL said. The PSC contains no provision which entitles the GoI to restrict the costs recovered by the company by reference to factors such as the level of production or the extent to which field facilities are utilised, RIL said. RIL said it has initiated arbitration proceedings against the GoI in a bid to finally resolve the cost recovery issue so as not to hinder future investments in this block.

Jaiprakash Associates gained 3.62% as cement dispatches jumped 43.2% to 1.59 million tonnes in November 2011 over November 2010.

ACC rose 3.66% extending Thursday's 2.24% gains after company announced during market hours on Thursday that cement dispatches rose 5.17% to 1.83 million tonnes in November 2011 over November 2010.

Ambuja Cements jumped 7.27% after shipments rose 29% to 1.83 million tonnes in November 2011 over November 2010. The company said in a statement the growth in November shipments was due to a statistical low base in the year-ago period. Production in November rose to 1.81 million tonnes from 1.44 million tonnes a year earlier.

Interest rate sensitive realty stocks reversed initial losses triggered by hopes a slowing economy could prompt the Reserve Bank of India (RBI) to pause on rate increases this month. HDIL, DLF, Indiabulls Real Estate and Unitech rose by between 1.26% to 3.51%.

Interest rate sensitive banking stocks extended gains triggered by hopes a slowing economy could prompt the Reserve Bank of India (RBI) to pause on rate increases this month. India's largest private sector bank by net profit ICICI Bank rose 3.31%, extending Thursday's 6.76% jump. India's second largest private sector bank by net profit HDFC Bank advanced 2.71%, extending Thursday's 2.72% gain. India's largest bank by net profit and branch network State Bank of India (SBI) gained 3.7% after rising 3.2% on Thursday.

IT stocks rose on positive economic data in US and after major central banks on Wednesday moved to tame a liquidity crunch for European banks by providing cheaper dollar funding. U.S. manufacturing activity rose to its highest in five months, while recent data on consumer spending and private-sector job creation were also positive. Europe is the second largest outsourcing market for the Indian firms after US. India's second largest software services exporter by revenue Infosys rose 1.66% extending Thursday's 1.74% gains. India's largest software services exporter TCS gained 3.59%, with the stock gaining for the fifth straight day. Tata group holding firm, Tata Sons, recently named Cyrus Pallonji Mistry as the successor to Tata Group Chairman Ratan Tata. India's third largest software services exporter Wipro rose 2.14%.

Metal stocks reversed initial losses on fresh buying. Tata Steel, Jindal Saw, Sail, Jindal Steel & Power, Hindalco Industries, Sterlite Industries and JSW Steel rose by between 1.87% to 4.04%.

Interest rate sensitive auto stocks gained triggered by hopes a slowing economy could prompt the Reserve Bank of India (RBI) to pause on rate increases this month. Purchases of automobiles, including that of cars, utility vehicles and commercial vehicles are substantially driven by financing. The recent cut in petrol prices of Rs 0.78 per litre by PSU OMCs and strong sales in November month also supported auto stocks. The reduction in petrol prices was effective from midnight on Wednesday, 30 November 2011. India's largest truck maker by sales Tata Motors rose 4.57% extending Thursday's 6.06% jump after total sales rose 41% to 76,823 vehicles in November 2011 over November 2010.

India's largest tractor maker by sales Mahindra & Mahindra rose 2.5%. The company said total auto sales jumped 52.7% to 40,722 units in November 2011 over November 2010. Mahindra & Mahindra's (M&M) domestic sales jumped 51.63% to Rs 38,159 units, while exports surged 70.90% to 2,563 units in November 2011 over November 2010. The 4-wheeler commercial segment, which includes the passenger and load categories, has registered an impressive growth of 74% at 13,362 units.

India's largest motorcycle maker by sales Bajaj Auto rose 0.54% reversing initial losses. Bajaj Auto announced on Friday that its total vehicle sales were up 25% at 374,477 units in November 2011 over November 2010. India's largest motorcycle maker by sales Hero MotoCorp fell 0.3% and was the lone loser from the Sensex pack. The company said on Thursday its sales rose 27.4% to 536,772 units in November 2011 over November 2010. TVS Motor Company rose 0.26%. The company's total sales rose 12% to 175,535 units in November 2011 over November 2010.

India's largest car maker by sales Maruti Suzuki India rose 3.1% on reports that it is considering an increase in prices of its products from January next year to offset the impact of rupee depreciation. The company announced during market hours on Thursday that total sales fell 18.5% to 91772 units in November 2011 over November 2010.

Shares of digital TV service distributors rose on reports the government may hike the foreign direct investment limit in the TV distribution platforms to 74%, from 49%. Cable television distributors, Hathway Cable & Datacom (up 7.28%), Den Network (up 2.52%), and Dish TV India (up 4.2%) edged higher. According to reports, the government will also moot for uniform foreign direct investment (FDI) cap across various carriage platforms like DTH, IPTV, mobile TV, HITS and cable companies. A draft note to this effect, prepared by Department of Industrial Policy and Promotion, has reportedly been sent to various ministries for their comments and inputs. They include Information and Broadcasting Ministry and the Department of Telecommunications.

Avance Tech clocked highest volume of 1.44 crore shares on BSE. Cals Refineries (1.31 crore shares), ITC (87.47 lakh shares), Chandni Textiles (82.95 lakh shares) and Suzlon Energy (44.33 lakh shares) were the other volume toppers in that order.

ITC clocked highest turnover of Rs 180.54 crore on BSE. SBI (Rs 149.49 crore), L&T (Rs 132.94 crore), Tata Steel (Rs 81.30 crore) and ICICI Bank (Rs 66.11 crore) were the other turnover toppers in that order.

Meanwhile, both the houses of Parliament have been adjourned till Wednesday as Monday and Tuesday is a holiday. The deadlock in Parliament over FDI and several other issues continued for the ninth day today, 2 December 2011. The adjournment came after Opposition and certain UPA allies created a ruckus in both houses over FDI in retail. The Winter Session began on 22 November 2011 and is slated to conclude on 22 December 2011.

A government statement in parliament has dashed hopes of a relief in securities transaction tax (STT). Junior finance minister S.S. Palanimanickam, last week, said the government has no proposal to lower the securities transaction tax (STT). There has been a speculation that the government will reduce STT in Union Budget 2012-2013 in a bid to revive sagging volumes on the bourses. Palanimanickam said in a written reply to Rajya Sabha that the securities transaction tax receipts had declined by around 18% to Rs 2960 crore during the first six months in the current fiscal year from a year ago period.

The Indian economy expanded at a substantially lower rate in the second quarter of the current fiscal year as a series of rate increases by the RBI and a global slowdown hurt local demand. India's economy grew 6.9% in Q2 September 2011, in line with expectations, after expanding by 7.7% in the first quarter, government data showed on Wednesday. The manufacturing sector grew an annual 2.7% during the July-September quarter while farm output rose an annual 3.2% the data showed. India's GDP growth in the first six months of FY12 stood at 7.3% versus 8.6% in the corresponding period of the last financial year, the CSO data showed on Wednesday.

The output of the eight infrastructure industries dropped to an over six-year low of 0.1% in October, data released on Wednesday showed, suggesting further slowdown in already wobbly industrial growth. The eight infrastructure industries together have a 38% weight in the index of industrial production (IIP), which makes the infrastructure index a good leading indicator of industrial production.

India's manufacturing sector expansion slowed in November as factory output grew at its slowest pace in nearly three years although export demand should provide some cheer for factories, a survey showed on Thursday. The HSBC Markit India Manufacturing PMI fell to 51.0 from 52.0 in October, but has stayed above the 50 mark that divides growth from contraction for 32 months. The PMI was 50.4 in September.

India's merchandise exports in October rose by 10.8% to $19.87 billion, while imports during the same month climbed by 22% to $39.51 billion, data released by the Government showed on Thursday. As a result, the trade deficit for October 2011 stood at $19.64 billion versus $14.53 billion in the corresponding month a year earlier.

Food inflation tumbled in the third week of November but fuel inflation increased marginally, data released by the Government showed on Thursday. Food inflation declined to 8% in the week ended November 19 from 9.01% in the preceding week, the Commerce & Industry Ministry said Thursday. Food inflation stood at 9.03% in the corresponding week last year. Inflation in the Primary Articles group fell to 7.74% in the week under review, from 9.08% in the week ended November 12, according to the Commerce Ministry statement. It was at 14.32% in the year-ago period. Inflation in the Fuel & Power group stood at 15.53% in the week ended November 19 versus 15.49% in the previous week, the Government data showed. It was at 10.07% in the comparable week of the previous year.

India's inflation rate will fall sharply over the next few months and the country's economy should hold up despite the global economic slowdown, Prime Minister Manmohan Singh said on Tuesday.

RBI announced a 25 basis points hike in its key policy rate viz. the repo rate to 8.5% after half-yearly review of the monetary policy on 25 October 2011. The central bank cut its GDP growth forecast for the current fiscal year through March 2012 to 7.6% from 8% earlier. But it retained its March-end inflation projection of 7%. RBI said the projected inflation trajectory indicates that the inflation rate will begin falling in December 2011 (January 2012 release) and then continue down a steady path to 7% by March 2012. It is expected to moderate further in the first half of 2012-13. This reflects a combination of commodity price movements and the cumulative impact of monetary tightening. Further, moderating inflation rates are likely to impact expectations favourably.

European stocks resumed their brisk rally on Friday, on hopes of upbeat U.S. jobs data and a bold solution to the euro zone debt crisis at the December 9 summit. Key benchmark indices in France, Germany and UK rose by between 1.44% to 1.71%.

Data showed that activity in the euro-zone manufacturing sector contracted at the sharpest pace in 28 months in November. Investors are focusing on the December 9 European Union summit, where they hope leaders will come up with concrete solutions to the debt crisis.

Select Asian markets paused on Friday, a day after posting their biggest single-day rise in more than two months, as investors cashed in some gains and looked ahead to a key European summit next week for more progress on tackling the euro-zone debt crisis. Key benchmark indices in China, Indonesia, South Korea and Taiwan were down by between 0.01% to 1.1%. Key benchmark indices in Japan, Singapore, Malaysia and Hong Kong were up by between 0.2% to 0.54%.

Coordinated central bank action to cut the cost of funds in money markets, plus a Chinese move to free up more bank capital, sparked a big rally in Asian stocks on Thursday.

Trading in US index futures indicated that the Dow could gain 127 points at the opening bell on 2 December 2011. U.S. stocks declined on Thursday as better-than- forecast manufacturing growth and a rally in French and Spanish bonds were not enough to extend the biggest three-day gain in the Standard & Poor's 500 Index since March 2009.

The monthly U.S. payrolls data is due later in the global day. The labour data is expected to show an increase of 122,000 jobs and a steady unemployment rate of 9.0%.