BSE Small-Cap, Mid-Cap indices outshine Sensex

Key benchmark indices edged higher for the second straight day as index heavyweight Reliance Industries (RIL) jumped nearly 3% on buzz of a likely petrochemicals joint venture announcement by the company at a news conference later today, 21 February 2012. The barometer index, BSE Sensex, attained its highest closing level in almost 30 weeks. The 50-unit S&P CNX Nifty scaled its highest closing level in more than 30 weeks. Data showing sustained buying of Indian stocks by foreign funds underpinned sentiment. The Sensex advanced 139.26 points or 0.76%, off about 40 points from the day's high and up about 135 points from the day's low. The market breadth was positive. BSE Small-Cap and Mid-Cap indices outperformed the Sensex.

Data showing sustained buying of Indian stocks by foreign funds underpinned sentiment. Foreign institutional investors (FIIs) bought shares worth a net Rs 536.49 crore on Friday, 17 February 2012, as per provisional data from the stock exchanges. FIIs have bought shares worth a net Rs 12149.25 crore in this month so far (17 February 2012), as per provisional data from the stock exchanges. The inflow this month comes on the top of heavy purchases last month. FIIs bought shares worth a net Rs 10357.70 crore in January 2012, as per data from Securities & Exchange Board of India (Sebi).



The Sensex has jumped 1,235.06 points or 7.18% in February 2012 so far. The barometer index has surged 2,973.69 points or 19.24% in calendar 2012 so far. From a 52-week low of 15,135.86 on 20 December 2011, the Sensex has risen 3,292.75 points or 21.75%. From a 52-week high of 19,811.14 on 6 April 2011, the Sensex has lost 1,382.53 points or 6.97%.

Coming back to today's trade, interest rate sensitive realty and banking stocks extended recent strong gains as a further decline in headline inflation in January 2012 has reinforced expectations that the central bank will start cutting interest rates in the coming months to revive slowing economic growth. FMCG stocks also gained in a firm market.

The market pared gains after an initial surge. The market hovered in a narrow range in the positive terrain in morning trade. The market trimmed gains after hitting a fresh intraday high in mid-morning trade. The market surged to hit fresh intraday high in early afternoon trade. Key benchmark indices regained strength after paring gains in mid-afternoon trade as index heavyweight Reliance Industries (RIL) extended intraday gains. The market pared gains after hitting fresh intraday high in late trade.

High volatility is expected on the bourses this week as traders roll over positions in futures & options (F&O) segment from the near-month February 2012 series to March 2012 series. The near-month February 2012 F&O contracts expire on Thursday, 23 February 2012.

The BSE Sensex jumped 139.26 points or 0.76% to settle at 18,428.61, its highest closing level since 27 July 2011. The index jumped 181.51 points at the day's high of 18,470.86 in late trade. The index rose 4.45 points at the day's low of 18,293.80 in early trade.

The S&P CNX Nifty surged 42.85 points or 0.77% to settle at 5,607.15, its highest closing level since 25 July 2011. The index hit a high of 5,621.50 and a low of 5,561.75 in intraday trade.

The BSE Mid-Cap index rose 0.91% and the BSE Small-Cap index gained 1.2%. Both these indices outperformed the Sensex.

BSE clocked turnover of Rs 3521 crore, lower than Rs 4432.06 crore on Friday, 17 February 2012.

The market breadth, indicating the overall health of the market, was positive. On BSE, 1,676 shares advanced and 1,307 shares declined. A total of 110 shares were unchanged.

Among the 30-share Sensex pack, 19 gained while rest of them declined.

Index heavyweight Reliance Industries (RIL) rose 2.92% on buzz of a likely petrochemicals joint venture announcement by the company later today, 21 February 2012. Reliance Industries (RIL) has reportedly called a news conference in Mumbai at 17:30 IST today, 21 February 2012.

Shares of oil exploration firms gained as oil traded near the highest price in nine months in Asian electronic trading today, 21 February 2012, on speculation fuel demand will increase after euro-area finance ministers agreed on a second bailout for Greece. Cairn India rose 1.22%. Higher crude oil prices will result in higher realizations from crude sales for oil exploration firms.

ONGC jumped 3.7%. Last week, a ministerial panel approved auctioning a 5% stake in the state-run explorer.

Essar Oil rose 0.44%, reversing initial losses. The company reported net loss of Rs 3986 crore for Q3 December 2011, compared with net profit of Rs 273 crore in Q3 December 2010. Net sales rose 5% to Rs 13119 crore in Q3 December 2011 over Q3 December 2010. The company announced the results after trading hours on Friday, 17 February 2012.

NTPC fell 0.8%. NTPC is set to place orders for 11 supercritical boilers and an equal number of turbines of 660 MW each with the Supreme Court ruling that Ansaldo Caldaie Boilers India, a unit of Italian boiler maker Ansaldo Caldaie SpA, had failed to technically qualify for the bidding process. The bidding process for the supercritical boilers was delayed by more than a year after Ansaldo Caldaie moved the Delhi High Court following its disqualification on technical grounds. The high court had upheld Ansaldo's plea that it was wrongly disqualified, against which NTPC moved the Supreme Court.

NTPC had floated tender in October 2009 for the supply of 11 supercritical boilers -- nine for its own projects and two for Damodar Valley Corporation (DVC). These projects are envisaged for implementation under the 12th Five-year capacity addition programme. Besides Ansaldo, three bidders -- Bharat Heavy Electricals (Bhel), a consortium of Larsen & Toubro Power and Mitsubishi Heavy Industries and a JV between BGR Energy and Hitachi Power Europe GmbH -- had qualified in the first phase of bidding. NTPC will now invite price bids for supercritical boilers from these three bidders.

Shares of power equipment maker extended Friday's (17 February 2012) gains as a favourable court ruling has paved the way for state-run power generation major NTPC to place bulk orders for boilers based on supercritical technology. India's largest power equipment maker by sales Bhel jumped 4.78%, with the stock extending Friday's 6.53% rally.

India's biggest engineering & construction firm by order book, Larsen & Toubro fell 0.36%, with the stock reversing initial gains. L&T said during trading hours today, 21 February 2012, that its Metering & Protection Systems business has agreed to form a strategic partnership with UK-based Cyan Holdings to collaborate in the development, supply and delivery of advanced metering solutions comprising L&T electricity meters integrated with Cyan's wireless communication modules for AMI, Smart Metering and Smart Grid Pilot projects.

Interest rate sensitive realty stocks extended recent gains as a further decline in headline inflation in January 2012 has reinforced expectations that the central bank will start cutting interest rates in the coming months to revive slowing economic growth. DLF, HDIL and Unitech rose by between 1.91% to 13.24%.

Lower interest rates may help revive demand for properties. Purchases of both residential and commercial property are largely driven by finance. From a recent low of 1370.23 on 2 January 2012, the BSE Realty index jumped 51.77% to 2079.72 on 17 February 2012.

FMCG stocks rose on renewed buying. Marico, ITC, Nestle India and Dabur India rose by between 0.56% to 0.85%. FMCG giant Hindustan Unilever lost 0.82%.

Interest rate sensitive banking stocks extended recent gains as a further decline in headline inflation in January 2012 has reinforced expectations that the central bank will start cutting interest rates in the coming months to revive slowing economic growth. From a recent low of 9153.39 on 30 December 2011, the BSE Bankex jumped 39.14% to 12736.09 on 17 February 2012.

India's largest commercial bank by net profit and branch network State Bank of India (SBI) rose 1.45%. SBI last week reported 15.38% growth in net profit to Rs 3263.04 crore on 20.46% growth in total income to Rs 29787.37 crore in Q3 December 2011 over Q3 December 2010. SBI's provisioning for non-performing assets jumped 84.16% to Rs 3006.12 crore in Q3 December 2011 over Q3 December 2010.

The bank's ratio of net non-performing assets rose to 2.22% as on 31 December 2011 from 2.04% as on 30 September 2011 and 1.61% as on 31 December 2010. The ratio of gross non-performing assets rose to 4.61% as on 31 December 2011 from 4.19% as on 30 September 2011 and 3.17% as on 31 December 2010.

On a consolidated basis, SBI posted 16.37% growth in net profit to Rs 4318.08 crore on 16.74% rise in total income to Rs 43155.95 crore in Q3 December 2011 over Q3 December 2010.

India's largest private sector bank by branch network ICICI Bank advanced 0.97%.

India's second largest bank by net profit HDFC Bank rose 0.67% to Rs 531.10. The stock had hit a record high of Rs 537.50 in intraday trade on Thursday, 16 February 2012.

UCO Bank rose 3.21% after the bank's board approved issuing 3.13 crore equity shares to Life Insurance Corporation of India (LIC) on preferential basis.

Punjab National Bank fell 0.64%. A meeting of the board of directors of the bank will be held tomorrow, 22 February 2012, for considering issuance of equity shares to LIC on preferential allotment basis.

Coal India rose 0.17%. Prime minister Manmohan Singh last week directed the state-run coal giant to sign fuel supply agreements (FSAs) with power plants that have entered into long-term PPAs with power distribution companies and have been commissioned/would get commissioned on or before 31 March 2015. Singh has directed Coal India to guarantee supplies to the private power sector in a bid to alleviate the nation's chronic energy shortages.

For power plants that have been commissioned up to 31 December 2011, Coal India will sign FSAs before 31 March 2012. The FSAs will be signed for full quantity of coal mentioned in the Letters of Assurance (LoAs) for a period of 20 years with trigger level of 80% for levy of disincentive and 90% for levy of incentive. In case of any shortfall in fulfilling its commitment under the FSAs from its own production, Coal India will arrange for supply of coal through imports or through arrangement with State/Central PSUs who have been allotted coal blocks. The proposed course of action has been approved by the Prime Minister.

A statement from the Prime Minister's office on Wednesday, 15 February 2012, said that these arrangements will provide relief to power plants with estimated capacity of more than 50,000 megawatts (MW). The proposed set of arrangements is being seen as a major step forward in solving the problems of power sector in the country and is likely to boost investors' confidence in India's power sector, the statement added. It will help not only in achieving power generation capacity targeted in the 12th Plan but also assist in achieving the targeted growth of GDP, according to the statement.

Interest rate sensitive auto stocks were mixed. India's largest car maker by sales Maruti Suzuki India declined 0.8%. Commercial vehicles maker Ashok Leyland fell 0.68%.

India's largest motorcycle maker by sales Hero MotoCorp gained 1.58%.

India's second largest motorcycle maker by sales Bajaj Auto rose 0.56% to Rs 1810.75. The stock hit a record high of Rs 1829.95 today.

India's largest truck maker by sales Tata Motors declined 0.99%.

India's largest utility vehicles maker Mahindra & Mahindra (M&M) rose 1.42%. M&M' consolidated net profit, adjusted for extra-ordinary items, rose 13.2% to Rs 831.80 crore on 27.6% growth in gross revenue and other income to Rs 16488.40 crore in Q3 December 2011 over Q3 December 2010. Mahindra Satyam, Mahindra Finance and Mahindra Forgings led the improved performance of the Mahindra Group in Q3 December 2011. M&M announced the consolidated results during trading hours today, 21 February 2012.

Ranbaxy Laboratories rose 0.18% after the company said during market hours today that its subsidiary Ranbaxy Australia has launched Atorvastatin 10 milligrams (mg), 20 mg, 40 mg and 80 mg tablets in the Australian market after receiving approval from a Therapeutic Goods Administration (TGA), the regulatory authority in Australia.

IT stocks were mixed. India's second largest software services exporter by revenue Infosys declined 0.46%. India's third largest software services exporter by revenues Wipro shed 1.46%.

India's largest software services exporter by revenue, TCS rose 0.42% to Rs 1233.90. The stock had scaled a record high of Rs 1,252.95 in intraday trade on Friday, 17 February 2012. The company's chief executive N. Chandrasekaran said in a recent media interview that the company expects business momentum to strengthen next fiscal year as clients have started loosening their purse strings despite economic uncertainties.

Mahindra Satyam fell 0.67%. Mahindra Satyam and Japan's SBI Holdings today, 21 February 2012, announced a $50 million joint global fund aimed at investing in ICT companies globally.

Most metal stocks rose after China on Saturday, 18 February 2012 moved to boost its economy by freeing up bank lending. China is the world's largest consumer of copper and aluminum. Jindal Steel & Power, Bhushan Steel, Hindustan Zinc, Tata Steel, and Hindalco Industries rose by between 0.41% to 2.95%.

LMEX, a gauge of six metals traded on the London Metal Exchange rose 0.73% on Monday, 20 February 2012.

JSW Steel rose 1.3% after the company said that the finance committee, a duly authorized sub-committee of the board of directors of the company, at a meeting held on Monday, 20 February 2012, decided to avail an external commercial borrowing (ECB) of $275 million, which includes a green shoe option of $75 million at an interest rate of $ Libor plus 4% per annum. The company has entered in to an indicative, non-binding term sheet with an arranger for the ECB, JSW Steel said. The term of the ECB is 5 years plus 1 day from the date of drawdown, the company said in a statement.

Kingfisher Airlines rose 0.75%, with the stock reversing steep intraday losses, after the airline's chief executive Sanjay Aggarwal said that the airline will resume normal operations in five to six days and that the airline has sufficient pilots to operate its flights. Tax authorities recently froze the airline's bank accounts for the second time due to its inability to clear service tax arrears. The action forced Kingfisher to ground planes, cut more flights and withhold salaries to its employees.

Cancellation of flights by Kingfisher Airlines lifted shares of the two other listed private airlines on expectations of diversion of passenger traffic from Kingfisher. Jet Airways and SpiceJet jumped 7.13% to 9.98%.

Cals Refineries clocked highest volume of 1.67 crore shares on BSE. Lanco Infratech (1.54 crore shares), Kingfisher Airlines (1.02 crore shares), SpiceJet (93.98 lakh shares) and Suzlon Energy (88.97 lakh shares) were the other volume toppers in that order.

SBI clocked highest turnover of Rs 157.87 crore on BSE. RIL (Rs 93.30 crore), Tata Steel (Rs 91.07 crore), Titan Industries (Rs 71.19 crore) and Tata Motors (Rs 66.21 crore) were the other turnover toppers in that order.

On the macro front, a further decline in headline inflation in January 2012 has reinforced expectations that the central bank will start cutting interest rates in the coming months to revive slowing economic growth. The wholesale price index (WPI) rose a slower-than-expected 6.55% in January 2012 from 7.47% rise in December 2011, government data showed early last week. The annual reading for November 2011 was revised upwards to 9.46% from 9.11% reported earlier.

The government said on Tuesday that inflation based on the consumer price index (CPI) rose 7.65% in January 2012. The annual CPI data released for the first time on Tuesday measures retail prices in major food groups, fuel, clothing, housing and education across rural and urban India. The new CPI price series is gradually expected to displace wholesale price data as the primary indicator of inflationary trends.

Finance Minister Pranab Mukherjee will present the annual budget for 2012/13 on 16 March 2012, while the railways budget will be presented on 14 March 2012. The budget session of parliament will start on 12 March 2012. The government will present on March 15 the Economic Survey for 2011/12, a document on the state of economy prepared by the economic division in the ministry of finance. The annual budget is usually presented on the last working day of February. However, the budget has been delayed this time due to the ongoing assembly polls. Polling for assembly elections in five states concludes in early March 2012.

Reports indicate that the finance ministry is considering a proposal to increase excise duty from 10% to 12%, although still lower than the level before the 2008 financial crisis. The move is aimed at helping the government improve its fiscal situation but it is expected to push up the cost of almost all manufactured goods from food products to consumer durables and automobiles.

European stocks edged lower on Tuesday, 21 February 2012, after the agreement of a second bailout deal for Greece removed the threat of a disorderly bond default but left markets unconvinced it could avoid further turmoil. Key benchmark indices in France, Germany and UK shed by between 0.35% to 0.84%.

After a long wait for a final agreement, European finance ministers approved the terms of a fresh aid package for Greece on Tuesday and the country agreed the terms of a deal with its private debt holders.

Asian stocks reversed initial losses on Tuesday, 21 February 2012, after euro-area finance ministers agreed on a second bailout for Greece. Key benchmark indices in China, Indonesia, Hong Kong, and Singapore were up by between 0.13% to 0.75%. Key benchmark indices in Taiwan, Japan and South Korea fell by between 0.03% to 0.42%.

Credit-ratings agency Standard & Poor's Corp. on Monday reaffirmed Japan's sovereign debt rating at AA-, but cautioned it would consider lowering its long and short term ratings if Japanese authorities fail to alter the debt trajectory from its current course.

China's central bank on Saturday, 18 February 2012, made a long-awaited move to support lending in the country's slowing economy with a cut to the amount of money banks must hold as reserves. The People's Bank of China announced that the amount that major banks must keep in reserve will be cut to 20.5% from 21% with effect from 24 February 2012.

Trading in US index futures indicated that the Dow could gain 42 points at the opening bell on Tuesday, 21 February 2012. US stock markets were closed on Monday, 20 February 2012, on account of President's Day holiday.