Nifty scales 27-week closing high on buying by FIIs

Key benchmark indices edged higher amid volatility in the second half of the trading session. The 50-unit S&P CNX Nifty attained its highest closing level in 27 weeks. The barometer index, BSE Sensex, attained its highest closing level in more than 14-1/2 weeks. The Sensex,advanced 84.87 points or 0.48%, off close to 100 points from the day's high and up about 120 points from the day's low. Data showing sustained buying of Indian stocks by foreign institutional investors (FIIs) boosted sentiment. BSE Small-Cap and Mid-Cap indices outperformed the Sensex.

The Sensex has gained 513.77 points or 2.98% in February 2012 so far. The barometer index has surged 2,252.40 points or 14.57% in calendar 2012 so far. From a 52-week low of 15,135.86 on 20 December 2011, the Sensex has risen 2,571.46 points or 16.98%. From a 52-week high of 19,811.14 on 6 April 2011, the Sensex has lost 2,103.82 points or 10.61%.



Coming back to today's trade, index heavyweight Reliance Industries (RIL) edged higher. ONGC declined after reporting poor Q3 results. Bharti Airtel fell nearly 7% on poor Q3 results. ICICI Bank declined after multiple block deals were executed in the stock on the National Stock Exchange (NSE). Metal and realty stocks extended recent strong gains. Shares of power generation companies also edged higher. IT stocks rose on positive economic data in the US. Reliance Anil Dhirubhai Ambani Group shares surged.

The market trimmed gains after a higher opening. The market strengthened in morning trade to hit fresh intraday high. The market extended intraday gains to hit fresh intraday high in mid-morning trade. The market regained strength after trimming gains after hitting fresh intraday high in early afternoon trade. A bout of volatility was witnessed in mid-afternoon trade as key benchmark erased almost the entire intraday gains after hitting fresh intraday highs in afternoon trade. Volatility continued in late trade as key benchmark indices moved into positive terrain after slipping into the red to hit fresh intraday lows.

Data showing sustained buying of Indian stocks by foreign funds supported sentiment. Foreign institutional investors (FIIs) bought shares worth Rs 618.84 crore on Tuesday, 7 February 2012, as per provisional data from the stock exchanges. FIIs have bought shares worth Rs 6307.77 crore in first five trading sessions this month, as per provisional data from the stock exchanges. The inflow early 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 BSE Sensex advanced 84.87 points or 0.48% to settle at 17,707.32, its highest closing level since 28 October 2011. The index jumped 186.76 points at the day's high of 17,809.21 in afternoon trade. The index fell 42.86 points at the day's low of 17,579.59 in late trade, its lowest level since 3 February 2012.

The S&P CNX Nifty jumped 33 points or 0.62% to settle at 5,368.15, its highest closing level since 3 August 2011. The index hit a high of 5,396.90 and a low of 5,325.20 in intraday trade.

The BSE Mid-Cap index rose 1.45% and the BSE Small-Cap index gained 0.89%. Both these indices outperformed the Sensex.

BSE clocked turnover of Rs 3416 crore, lower than Rs 3452.77 crore on Tuesday, 7 February 2012.

The market breadth, indicating the overall health of the market, was positive. On BSE, 1,734 shares rose and 1,162 fell. A total of 102 shares were unchanged.

Among the 30-member Sensex pack, 22 rose while the rest fell.

Index heavyweight Reliance Industries (RIL) rose 1.57% to Rs 858.05, with the stock extending Tuesday's 1.44% gain. RIL is reportedly in talks with private-sector carriers Jet Airways (India) and Kingfisher Airlines and state-run Air India to provide jet fuel handling services at airports across the country.

RIL said on 30 January 2012, that it proposes to buy-back its shares from the existing shareholders/beneficial owners other than the promoters/persons who are in control of the company from the open market. The company proposes to buy-back up to a maximum of twelve crore shares and a minimum of three crore shares. The buyback programme started on 1 February 2012 and will end on 19 January 2013.

The maximum price for buyback has been set at Rs 870 per share. The company has set aside Rs 10440 crore for share buyback, which represents approximately 7.22% of the company's total paid-up equity capital and free reserves as on 31 March 2011.

ONGC fell 1.29% after the company announced during market hours today that net profit fell 4.82% to Rs 6741.41 crore on 11% decline in total operating income to Rs 18517.13 crore in Q3 December 2011 over Q3 December 2010.

Reliance Anil Dhirubhai Ambani Group shares surged. Reliance Communications, Reliance Infrastructure, Reliance Broadcast network, Reliance Capital, Reliance MediaWorks and Reliance Power gained by between 2.31% to 8.17%.

IT stocks rose on positive economic data in the US, the biggest outsourcing market for the Indian IT firms. India's largest software services exporter by revenue TCS rose 1.61%. TCS said it has formed a new joint venture (JV) with Mitsubishi Corporation for the Japanese market. Nippon TCS Solution Center will offer a full service suite of IT, BPO and infrastructure services to Japanese corporations. TCS Japan will have 60% stake with Mitsubishi Corporation holding 40% stake in JV. The new joint venture will also establish a near-shore delivery center in Japan.

TCS said on Monday that it won a multi-year, multi-million euro contract from Europcar, the car rental leader in Europe. Europcar Information Services, Europcar's IT subsidiary, has selected TCS to manage strategic IT services development for its French operations.

India's second largest software services exporter by revenue Infosys rose 1.6%. The company has given a muted guidance for Q4 March 2012. The company has projected a marginal 1.25% growth in non-annualised earnings per American Depositary Share at $0.81 in Q4 March 2012 over Q3 December 2011. The company has projected a flat to 0.22% growth in consolidated revenue in dollar terms at $1.806 billion to $1.81 billion in Q4 March 2012 over Q3 December 2011.

India's third largest software services exporter by revenues Wipro gained 1.83%. Wipro reported 12% growth in consolidated net profit to Rs 1456.40 crore on 10% growth in sales to Rs 9997.20 crore in Q3 December 2011 over Q2 September 2011. Wipro expects revenues from IT services business to grow 1% to 3% at $1.52 billion to $1.55 billion in Q4 March 2012 over Q3 December 2011. The company

Bank stocks were mixed. India's largest private sector bank by branch network ICICI Bank fell 1.81% to Rs 919.95. A massive volume of 2.24 crore shares was recorded in the counter on NSE, which represents 1.94% equity of the bank. About 1.6 crore shares of ICICI Bank were reportedly sold in multiple block deals on NSE at an average price of Rs 925 per share. As per market talks, Allamanda Investments Pte, a unit of Singapore state investment company Temasek Holdings, has offloaded a part of its 3.46% stake in the bank.

India's second largest bank by net profit HDFC Bank shed 0.32%. HDFC Bank reported 31.4% growth in net profit to Rs 1429.70 crore on 35.6% increase in total income to Rs 8622.64 crore in Q3 December 2011 over Q3 December 2010. The result was announced on 19 January 2012.

HDFC Bank said its core CASA deposit ratio, adjusted for one-off current account balance of about Rs 4000 crore, was at 47.7% of total deposits as on 31 December 2011. The private sector bank said its asset quality remains healthy. The bank's capital adequacy ratio (CAR) remained strong at 16.3% as on 31 December 2011, against the regulatory minimum of 9%. The bank's Tier-I CAR was 11.2% as on 31 December 2011.

India's largest commercial bank by net profit and branch network State Bank of India (SBI) gained 1.09%. SBI recently said that the Government of India has agreed to inject approximately Rs 7900 crore into bank by way of preferential allotment of equity shares to help SBI achieve minimum 8% Tier I CAR by 31 March 2012. The country's biggest lender by assets didn't say when the government would infuse the capital. The government currently owns 59.40% of SBI.

GMR Infrastructure jumped 7.59% after the company issued a positive outlook for the future at the time of announcing Q3 December 2011 results after trading hours on Tuesday, 7 February 2012. The company reported a consolidated net loss of Rs 107.95 crore in Q3 December 2011, higher than a net loss of Rs 22.25 crore in Q3 December 2010. Total income jumped 49.17% to Rs 2094.45 crore in Q3 December 2011 over Q3 December 2010.

Bharti Airtel slumped 6.58% after the company announced during market hours today that consolidated net profit as per International Financial Reporting Standards (IFRS) fell 22% to Rs 1011 crore on 17% growth in total revenue to Rs 18477 crore in Q3 December 2011 over Q3 December 2010. The stock was the top loser from the Sensex pack.

The company said its EBITDA (earnings before interest, taxation, depreciation and amortization) margin increased to 32.2% in Q3 December 2011 from 31.7% in Q3 December 2010, with a significant improvement in EBITDA margin of African operations. The company said its performance at the net level was adversely impacted on account of 3G license fee amortization, higher interest cost and higher taxation.

In a statement, Mr. Sunil Bharti Mittal, Chairman & Managing Director, Bharti Airtel, said, "I am pleased that investments in branding and networks continue to be our focus in India, as we enhance customer experience for voice quality and cater to the ever increasing demand for data. These investments are resulting in healthy growth of mobile revenues. In Africa, we have crossed the 50 million customer milestone and are now one of the fastest growing telecom companies in the continent".

Power generation shares were in demand. Tata Power Company, GVK Power & Infrastructure and NTPC rose by between 0.75% to 1.81%.

Realty stocks extended recent strong gains. From a recent low of 1370.23 on 2 January 2012, the BSE Realty index jumped 32.53% to 1816.01 on 7 February 2012. HDIL, Indiabulls Real Estate, Phoenix Mills, DLF, Peninsula Land, Sobha Developers, Sunteck Realty, Godrej Properties, and Unitech jumped by between 0.35% to 7.51%

Metal stocks rose as LMEX, a gauge of six metals traded on the London Metal Exchange, gained 0.4% on Tuesday, 7 February 2012. Metal stocks rose as LMEX, a gauge of six metals traded on the London Metal Exchange, gained 0.4% on Tuesday, 7 February 2012. JSW Steel, Nalco, Sterlite Industries, Hindustan Zinc, Hindalco Industries, Sesa Goa, and Jindal Steel & Power rose by between 0.04% to 4.92%.

Cairn India rose 1.79% to Rs 372.55 as crude-oil futures rose after a surprise decline in US crude inventories and as global markets were pulled higher on hopes for progress on debt talks in Greece. The stock hit a record high of Rs 376.90 today. Higher crude oil prices will result in higher realizations from crude sales for oil exploration firms like Cairn India.

FMCG major Hindustan Unilever (HUL) rose 1.57% on bargain hunting after last two days' slide. The stock fell in the past two trading sessions as the company's Q3 December 2011 sales growth fell short of market expectations. HUL's profit after tax but before exceptional items jumped 30% to Rs 762 crore on 15.62% increase in total income to Rs 6017.71 crore in Q3 December 2011 over Q3 December 2010. The result was announced during trading hours on Monday, 6 February 2012.

HUL said the company's domestic consumer business grew at 16.5% in Q3 December 2011, with strong underlying volume growth of 9.1%. All segments delivered double digit growth, the FMCG giant said. Inflationary pressures during the quarter were primarily on account of currency depreciation HUL said adding that cost pressures were managed dynamically through aggressive savings programmes coupled with judicious pricing. Cost of goods sold was up by 140 basis points (bps). Brand investment continued to be competitive with A&P at 11.8% of turnover in Q3 December 2011, HUL said.

Most auto stocks rose after auto companies reported good sales in January 2012. India's largest car maker by sales Maruti Suzuki India rose 1.83%. The car major last week said its total sales rose 5.2% to 1.15 lakh units in January 2012 over January 2011. Domestic sales rose 0.6% to 1.01 and exports jumped 54.3% to 14,386 units in January 2012 over January 2011.

Maruti early this month introduced a shorter, cheaper version of its Swift Dzire sedan as part of efforts to retain its position as the country's largest car maker by sales. The new Dzire is 3.95 meters in length, qualifying it for a lower federal excise tax, compared with the current 4.1 meter-long model. The government imposes a 10% tax on cars measuring up to 4 meters in length. These cars can have a diesel engine of only up to 1.5 liters or a gasoline engine of up to 1.2-liters. An excise tax of 22% is imposed on cars beyond 4 meters in length.

Mahindra & Mahindra (M&M) fell 0.39%, with the stock extending Tuesday's 2.02% losses after company said it expects pressure on profit margin to continue in the near future. The combined net profit of M&M and Mahindra Vehicle Manufacturers (MVML), excluding extra-ordinary items, rose 16% to Rs 705.90 crore in Q3 December 2011 over Q3 December 2010. The combined gross revenue and other income of M&M and MVML jumped 33.9% to Rs 9011.20 crore in Q3 December 2011 over Q3 December 2010. MVML was set up a 100% subsidiary of M&M, with a view to sourcing contemporary products for expanding the market offerings of M&M. M&M announced the Q3 result during trading hours on Tuesday, 7 February 2012.

With regard to future outlook, M&M said growth in profit in Q3 December 2011 despite relentless increase in material costs was due to a good volume performance by both vehicles and tractors segments in a difficult market and due to tight control on expenses. M&M said it has always met challenges through its continuous focus on new product introductions, which has helped it drive volumes.

M&M said on Tuesday that it has received more than 25,000 bookings for its latest XUV500 sport-utility vehicle after it reopened applications. Bookings for the vehicle reopened on 25 January 2012 across 19 cities in the country and closed on 3 February 2012. M&M had introduced the SUV in September 2011 and received 8,000 bookings within 10 days. The company then had to stop taking fresh orders as it was working on monthly output of 2,000 units. The company said recently it increased the vehicle's monthly output to 3,000 in January 2012 and plans to further raise it 4,000-5,000 in June 2012.

India's largest commercial vehicle maker by sales Tata Motors gained 0.18%. The company's total sales rose 16% to 87,465 units in January 2012 over January 2011. The company announced the monthly sales data early this month.

India's largest motorcycle maker by sales Hero MotoCorp rose 2.22%. The company reported 11.5% growth in sales to 5.20 lakh units in January 2012 over January 2011. The company announced the monthly sales data early this month.

Bajaj Auto gained 0.66%. The company early this month said its total vehicle sales rose 8% to 3.37 lakh units in January 2012 over January 2011. The company announced the monthly sales data early this month.

Airline stocks fell on profit taking after Tuesday's solid rally triggered by the Group of Ministers (GoM) recommending up to 49% foreign direct investment by foreign airlines into Indian airline companies and recommending allowing local airlines to directly import jet fuel for their own use. The suggestions will need an approval from the Union Cabinet. Jet Airways, SpiceJet and Kingfisher Airlines fell by between 3.02% to 5.49%. These stocks had surged by between 10.98% to 14.48% on Tuesday.

Both proposals are meant to support local aviation companies, which have been severely hit by losses due to high fuel costs and interest rates. Foreign airlines are currently barred from buying stakes in Indian aviation companies. Jet fuel accounts for up to 45% of the total costs for an Indian carrier. Importing the fuel would allow an airline to save on sales tax imposed by state governments.

Capital goods stocks rose on renewed buying. L&T rose 1.05%. The company announced during market hours on Tuesday that L&T Construction has bagged new orders valued over Rs 1880 crore across various business segments in Q4 March 2012.

Power equipment maker Bhel gained 0.54%, after slumping 4.22% on Tuesday. NTPC is reportedly unable to place equipment orders worth Rs 34000 crore for four super-critical projects in the country. The placement of these orders have been stranded since one of the participating bidders -- Ansaldo Caldaie Boilers (ACB) -- approached the court after its bid was rejected by NTPC citing non-fulfillment of minimum criteria in the tender.

Sugar and rice stocks rose after the government on Tuesday decided to allow the export of more sugar and non-basmati rice, and lower the floor price of basmati exports to boost farm trade.

Among sugar stocks, Balrampur Chini Mills, Bajaj Hindusthan and Shree Renuka Sugars gained by between 0.1% to 1.14%.

Among rice stocks, Kohinoor Foods, KRBL and LT Foods rose 2.29% to 4.39%.

The Empowered Group of Ministers (EGoM) on food agreed to allow export of another one million tonnes of sugar, reduce the minimum export price of basmati by 22%, and raise the limit on non-basmati rice exports from 2.2 million tonnes to 4 million tonnes. All the decisions will be reportedly sent to the Election Commission for approval, as assembly election are being held in Uttar Pradesh, the country's second largest sugar producing state.

IFCI clocked highest volume of 92.52 lakh shares on BSE. SpiceJet (79.70 lakh shares), Cals Refineries (72.22 lakh shares), Resurgence Mines (67.35 lakh shares) and HDIL (57.98 lakh shares) were the other volume toppers in that order.

SBI clocked highest turnover of Rs 170.35 crore on BSE. ICICI Bank (Rs 129.91 crore), Tata Steel (Rs 101.16 crore), RIL (Rs 81.12 crore) and Reliance Capital (Rs 76.16 crore) were the other turnover toppers in that order.

Tata Steel, Hindalco, ACC, Ambuja Cements and HPCL unveil quarterly results tomorrow, 9 February 2012. DFL, Tata Power, BPCL, Reliance Communications (RCom), Britannia Industries, Sun TV Network, Essar Oil and Neyveli Lignite Corporation unveil Q3 results on Friday, 10 February 2012. JSW Steel announces consolidated Q3 results on Friday, 10 February 2012. The company has already announced its stand-alone results.

Aditya Birla Nuvo, Oil India and Ashok Leyland announce Q3 results on Saturday, 11 February 2012. State Bank of India, Cipla, Reliance Power, Indian Oil Corporation, Coal India, Sun Pharmaceuticals Industries and Steel Authority of India (Sail) unveil Q3 results on 13 February 2012. Tata Motors, Reliance Infrastructure, Jaiprakash Associates, Videocon Industries and Shipping Corporation of India unveil Q3 results on 14 February 2012. Ranbaxy Laboratories and ABB unveil Q4 December 2011 results on 23 February 2012.

The Indian economy is estimated to grow 6.9% in the current fiscal year through March 2012 (FY 2012), sharply slower than the 8.4% expansion reported last year, according to a government forecast released on Tuesday, 7 February 2012. The new expectation is due to weaker growth in manufacturing and farm output, data from the ministry of statistics and implementation showed. The government expects manufacturing output to grow 3.9% this fiscal year compared with a 7.6% increase a year earlier. Farm output is expected to rise 2.5%, compared with 7% last year. In December 2011, the government had cut its growth projection for FY 2012 to between 7.25% and 7.75% from an initial forecast of 9%.

India is facing some challenges on its stable rating outlook and the balance of risk factors for its rating may be shifting slightly toward the negative, said Standard & Poor's Ratings Services on Monday, 6 February 2012, in a report titled "Several Factors Could Weigh On India's Current Stable Sovereign Rating In 2012." High inflation, a weak government fiscal position, and slower economic growth have hurt investor confidence in the rupee, triggered a capital outflow, and weighed on the stable sovereign outlook on India in 2012, the report said. S&P has an investment grade BBB- rating with a stable outlook on India.

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, Pawan Kumar Bansal, minister of parliament affairs, said recently. 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.

The government is likely aim to shrink its budget deficit by at least 0.4 percentage point of gross domestic product next fiscal year, as it attempts to boost government revenue and cut subsidies, a news agency quoted an unnamed senior finance ministry official as saying on Monday, 6 February 2012. Under a medium-term fiscal consolidation plan, the government is tasked with shrinking the fiscal deficit to 3.5% by March 2014. Getting back to a tight fiscal road is critical, and the government may have to take some tough steps such as cutbacks in social spending and streamline subsidies to help keep a lid on government expenditure, the official said.

The official said the government is likely to add more services to boost indirect taxes as a slowing economy limits chances of a sharp rise in personal income tax and corporate tax revenue. However, raising service tax rates seems unlikely ahead of the roll out an ambitious Goods and Services Tax, the official added.

India's trade deficit widened to $12.7 billion in December from $8.0 billion a year earlier as export growth slowed due to falling global demand. But imports, specially in the non-oil segments, continued to grow. For the April-December period, the trade gap was $133.2 billion, compared with $96.2 billion a year earlier. India's merchandise exports in December grew 6.7% from a year earlier to $25.0 billion while imports rose 19.8% to $37.7 billion.

European stock markets moved higher on Wednesday, 8 February 2012, as Greek officials prepared to finalize a deal on austerity measures to gain access to a second bailout. Key benchmark indices in France, Germany and UK rose 0.12% to 0.52%.

Greece remained in the spotlight as investors were still awaiting a final draft on a bailout deal. A deal was reportedly close Tuesday night, but a meeting where party leaders were supposed to agree on a new round of austerity measures was pushed back a day, according to news reports.

Asian stocks advanced on Wednesday, 8 February 2012, after Toyota Motor Corp. raised its profit forecast and as Greece's government edged closer to securing a bailout package. Key benchmark indices in China, Hong Kong, Indonesia, Japan, South Korea, Taiwan, and Singapore rose by between 0.83% to 2.43%.

Trading in US index futures indicated that the Dow could gain 13 points at the opening bell on Wednesday, 8 February 2012. US stocks rose Tuesday, 7 February 2012, as Greece neared accord on budget cuts, as job openings rose in America and as the Federal Reserve kept to its low-rate stance. Federal Reserve Chairman Ben Bernanke on Tuesday told the US Senate budget committee there has been a modest increase in the long-term normal rate of US unemployment, noting it was a cause of concern to monetary-policy makers.

Meanwhile, the Bureau of Labor Statistics reported the number of US job openings jumped 8.3% in December, to 3.4 million, as employers continue to increase the number of positions they are looking to fill. Other data showed credit-card debt in the US surged for a second-straight month as Americans increased borrowing to spend for the holiday season.