Sensex, Nifty scale over 27-week closing highs; breadth strong

Key benchmark indices gained for the second straight day to attain their highest closing level in more than 27 weeks on firm European stocks. The BSE Sensex surged 123.43 points or 0.7%, up about 220 points from the day's low and off about 50 points from the day's high. The market breadth was strong. BSE Small-Cap and Mid-Cap indices rose more than 1% each, outperforming the Sensex. Data showing sustained buying of Indian stocks by foreign institutional investors (FIIs) underpinned sentiment.

The Sensex has jumped 637.20 points or 3.7% in February 2012 so far. The barometer index has surged 2,375.83 points or 15.37% in calendar 2012 so far. From a 52-week low of 15,135.86 on 20 December 2011, the Sensex has risen 2,694.89 points or 17.8%. From a 52-week high of 19,811.14 on 6 April 2011, the Sensex has lost 1,980.39 points or 9.99%.



Coming back to today's trade, auto stocks extended recent gains triggered by auto companies reporting good sales for January 2012. Bank stocks also extended recent strong gains, with HDFC Bank and IndusInd Bank hitting record highs and Kotak Mahindra Bank scaling 52-week high. Hindalco Industries trimmed intraday losses after the company said its board has approved the issuance of up to 15 crore warrants to promoters/promoter group on preferential allotment basis. Steel shares surged.

Realty stocks extended recent strong gains. Bharti Airtel extended Wednesday's sharp slide triggered by weak Q3 results. ONGC also extended Wednesday's losses triggered by weak Q3 results. Ambuja Cements edged higher after decent Q4 results. ACC and UltraTech Cement scaled record highs.

The market dropped amid a bout of initial volatility. The market trimmed losses in morning trade. Key benchmark indices once again trimmed losses in mid-morning trade after hitting fresh intraday lows in morning trade. A bout of volatility was witnessed as key benchmark indices recovered again after paring gains after hitting fresh intraday highs in mid-morning trade. The Sensex pared gains after hitting fresh intraday high in afternoon trade. Intraday volatility continued as the Sensex once again slipped into the red after moving into positive terrain to hit fresh intraday high in mid-afternoon trade. The market surged in late trade.

The BSE Sensex jumped 123.43 points or 0.7% to settle at 17,830.75, its highest closing level since 3 August 2011. The index surged 172.14 points at the day's high of 17,879.46 in late trade. The index declined 97.89 points at the day's low of 17,609.43 in morning trade.

The S&P CNX Nifty jumped 44.20 points or 0.82% to settle at 5,412.35, its highest closing level since 2 August 2011. The index hit a high of 5,423.40 and a low of 5,338.90 in intraday trade.

The BSE Mid-Cap index rose 1.27% and the BSE Small-Cap index gained 1.18%. Both these indices outperformed the Sensex.

BSE clocked turnover of Rs 3310 crore, lower than Rs 3630.37 crore on Wednesday, 8 February 2012.

The market breadth, indicating the overall health of the market, was strong. On BSE, 1,836 shares rose and 1,059 fell. A total of 122 shares were unchanged.

Among the 30-member Sensex pack, 21 rose while the rest fell.

Index heavyweight Reliance Industries (RIL) declined 0.63% to Rs 852.65, with the stock snapping two-day gains. The stock came off the day's low of Rs 843. RIL, last week, started an Rs 10440-crore share buyback program. The company proposes to buy-back up to a maximum of twelve crore shares and a minimum of three crore shares. 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 0.53%, with the stock extending Wednesday's 1.29% losses triggered by weak Q3 results. The company announced during market hours on Wednesday that net profit fell 4.82% to Rs 6741.41 crore on 2.4% decline in sales revenue to Rs 18199 crore in Q3 December 2011 over Q3 December 2010. ONGC attributed the weak performance to a surge in under recovery discount. The company said it has notified five more discoveries since the last board meeting held on 4 January 2012.

Cairn India rose 2.13% to Rs 380.50, as oil futures rose for a eighth day in London on optimism Greece will receive a second bailout and as freezing weather in Europe boosted demand for heating. The Carin India stock hit a record high of Rs 384.35 today.

HPCL rose 0.59% The company announced after market hours today that net profit surged 1191.37% to Rs 2725.18 crore on 40.94% growth in total income to Rs 48204.97 crore in Q3 December 2011 over Q3 December 2010.

Construction stocks rallied. Hindustan Construction Company, NCC, Patel Engineering and IRB Infrastructure & Developers rose by between 4.52% to 11.8%.

L&T declined 1.01%. The company announced during market hours today that L&T Rajkot Vadinar Tollway, a wholly owned subsidiary of L&T Infrastructure Development Projects, commenced commercial operation of the four-laned 132 kilometer stretch of SH-25 on 1 February 2012. L&T had announced during market hours on Tuesday that its construction division has bagged new orders valued over Rs 1880 crore across various business segments in Q4 March 2012.

Power Grid Corporation of India rose 0.88% after company announced after market hours on Wednesday that net profit rose 36.9% to Rs 809.23 crore on 20.2% growth in net sales to Rs 2466.62 crore in Q3 December 2011 over Q3 December 2010.

Auto stocks extended recent gains triggered by auto companies reporting good sales for January 2012. India's largest commercial vehicle maker by sales Tata Motors gained 2.57%. 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.

Mahindra & Mahindra (M&M) rose 2.01%. The stock had fallen in previous two trading sessions 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 car maker by sales Maruti Suzuki India rose was up 0.21%. 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.

India's largest motorcycle maker by sales Hero MotoCorp rose 0.01%. 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 3.3%. 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.

Bank stocks extended recent strong gains. India's largest private sector bank by branch network ICICI Bank rose 2.14%. A unit of Singapore state investment company Temasek Holdings Pte on Wednesday, 8 February 2012, sold 1.59 crore shares of ICICI Bank through bulk deals on NSE for Rs 1472 crore. Allamanda Investments Pte sold the shares in India's largest private-sector lender by assets at an average Rs 924.05 per share. Goldman Sachs Investments Mauritius mopped up 64.65 lakh shares in the bulk deal at a price of Rs 924 per share.

India's second largest bank by net profit HDFC Bank rose 2.79% to Rs 522.15. The stock hit a record high of Rs 525.50 today, 9 February 2012. 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 0.3%. 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.

Kotak Mahindra Bank jumped 3.4% to Rs 550.35. The stock hit a 52-week high of Rs 553.90 today, 9 February 2012.

IndusInd Bank advanced 1.22% to Rs 310.05. The stock hit a record high of Rs 311 today, 9 February 2012.

Realty stocks extended recent strong gains. D B Realty, HDIL, Indiabulls Real Estate, and Unitech rose by between 2.45% to 8.49%. But, DLF fell 1.15%. From a recent low of 1370.23 on 2 January 2012, the BSE Realty index jumped 36.39% to 1868.89 on 8 February 2012.

Hindalco Industries fell 1.31% to Rs 158.75, off the day's low of Rs 148.75. The company announced during market hours today that net profit fell 1.95% to Rs 451 crore on 11% growth in net sales and operating revenue to Rs 6647 crore in Q3 December 2011 over Q3 December 2010. Hindalco said that volatile LME prices and foreign exchange fluctuations along with spiraling energy cost are posting a major challenge for the company in the short term context. Hindalco said its portfolio of LME neutral copper smelting operation and its integrated aluminium operation is providing the strategic balance in the volatile commodity cycle. Hindalco said capacity expansions under implementation will enable the company to grow at a rapid pace and consolidate its leadership even further. The company said its focus continues to be on timely completion of the projects and successful ramp-up of production.

Hindalco Industries also said that the board of directors of the company has approved the issuance of up to 15 crore warrants to promoters/promoter group companies on preferential allotment basis, entitling the holder(s) of each warrant to apply for and obtain allotment of one equity share against such warrant.

Hindalco's US subsidiary -- Novelis on Wednesday, 8 February 2012, reported net loss of $12 million in Q3 December 2011, lower than net loss of $46 million in Q3 December 2010. Net sales dipped 4% to $2.5 billion in Q3 December 2011 over Q3 December 2010. The company attributed lower sales to lower volumes and decline in average aluminum prices. Novelis is a global leader in aluminum rolled products and aluminum can recycling.

Novelis has slightly revised downwards its adjusted EBITDA guidance for the year ending March 2012 (FY 2012) to between $1.05-1.08 billion. The company said the downward revision was due to the ongoing market pressures and higher than expected destocking levels in several regions in the third quarter. The company has reaffirmed its FY 2012 free cash flow before capital expenditure target of $600-700 million and capital expenditure of approximately $550-600 million primarily focused on its global expansion projects in Brazil, Korea and North America.

Most metal stocks gained. Bhushan Steel, Nalco, Sterlite Industries, JSW Steel, NMDC, Hindustan Zinc, Sail and Jindal Steel & Power rose by between 0.1% to 8.71%.

India's largest steel maker by sales Tata Steel rose 0.1% ahead of its Q3 results today, 9 February 2012.

Bharti Airtel shed 1.13%, with the stock extending Wednesday's 6.58% slide triggered by weak Q3 results. The company announced during market hours on Wednesday 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 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.

ACC rose 0.46% to Rs 1,388.90 ahead of its Q4 results today. The stock hit a record high of Rs 1398.20 today.

UltraTech Cement gained 0.91% to Rs 1397.55. The stock hit a record high of Rs 1408 today.

Ambuja Cements rose 0.39%. The company announced during market hours today that net profit rose 17.15% to Rs 302.40 crore on 29.89% growth in total income to Rs 2422.79 crore in Q4 December 2011 over Q4 December 2010.

With regard to the future outlook, Ambuja Cements said it expects strong cement demand in calendar 2012. The company, however, sees cost pressure on account of rising cost of energy, logistics and raw materials impacting industry margins adversely. The company said it is focused on improving operational efficiency and productivity to mitigate cost pressures. Ambuja Cements expects cement prices to remain volatile in the short-term due to demand supply imbalances.

Reliance Anil Dhirubhai Ambani Group shares extended Wednesday's gains. Reliance Infrastructure, Reliance Communications, Reliance Broadcast network, Reliance Capital, Reliance MediaWorks and Reliance Power gained by between 0.18% to 5.01%.

Power generation shares rose. Torrent Power, Tata Power Company, GVK Power & Infrastructure and NTPC rose by between 1.48% to 3.38%.

IT stocks reversed initial losses. India's largest software services exporter by revenue TCS rose 0.68%. TCS said on Wednesday that 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 gained 1.39%. 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 rose 2.28%. 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

Tech Mahindra rose 1.01%, reversing initial losses. The company announced after market hours on Wednesday that consolidated net profit rose 14.8% to Rs 276 crore on 8.4% growth in revenue to Rs 1445 crore in Q3 December 2011 over Q2 September 2011. Commenting on the results, Vineet Nayyar, Vice Chairman, MD and CEO of Tech Mahindra said, "We have had a satisfactory quarter, with growth in both revenue and margins. This is a result of our investments in growth markets, and in emerging technologies. We continue to focus on delivering enhanced value to our customers in an uncertain economic environment".

The main industry body -- the National Association of Software and Services Companies (Nasscom) on Wednesday, 8 February 2012, said that the pace of revenue growth of the sector will likely moderate next fiscal year amid continued global economic uncertainty. Exports from the IT sector may grow 11%-14% in the year that starts on 1 April 2012 to $76 billion-$78 billion, compared with an estimated $68.7 billion this fiscal year, an increase of about 16%, Nasscom said. The body said it will review its export forecasts in October 2012.

With its large English-speaking and relatively cheap workforce, India remains a preferred outsourcing destination for companies in developed markets. India's share in global outsourcing was 58% in 2011, up from 55% in 2010, Nasscom said.

Cals Refineries clocked highest volume of 2.41 crore shares on BSE. Suzlon Energy (96.39 lakh shares), Unitech (74.63 lakh shares), IFCI (68.67 lakh shares) and Delta Corp (62.91 lakh shares) were the other volume toppers in that order.

SBI clocked highest turnover of Rs 124.23 crore on BSE. Tata Steel (Rs 102.30 crore), JSW Holdings (Rs 99.32 crore), JSW Steel (Rs 80.93 crore) and Jubilant Foodworks (Rs 80.64 crore) were the other turnover toppers in that order.

India's January exports rose 10.1% to $25.4 billion while imports rose 20.3% to $40.1 billion, leaving a trade deficit of $14.7 billion, Trade Secretary Rahul Khullar said on Thursday. India's exports reached $242.8 billion between April and January, Khullar said, citing provisional data.

Foreign institutional investors (FIIs) bought shares worth a net Rs 384.24 crore on Wednesday, 8 February 2012, as per provisional data from the stock exchanges. FIIs have bought shares worth a net Rs 6692.01 crore in first six 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).

DLF, Tata Power, BPCL, Reliance Communications (RCom), Britannia Industries, Sun TV Network, IDFC and Neyveli Lignite Corporation unveil Q3 results tomorrow, 10 February 2012. JSW Steel announces consolidated Q3 results tomorrow, 10 February 2012. The company has already announced its stand-alone results.

Aditya Birla Nuvo and Oil India 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, Essar Oil, 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.

European stock markets edged higher on Thursday as the market continued to monitor the latest news from Greece. Key benchmark indices in France, Germany and UK rose by between 0.22% to 0.59%.

Investors continued to focus on progress in Greek talks to approve austerity measures, which reportedly will continue on Thursday. The office of Greek Prime Minister Lucas Papademos released a statement Thursday morning saying the key political parties have reached an agreement in all matters except one. Media reports said details over adjustments to pensions remained as the sole sticking point.

Also on Thursday, officials from the European Central Bank and the Bank of England will separately announce outcomes of policy meetings.

Asian shares were mixed on Thursday, 9 February 2012. Key benchmark indices in China, Taiwan, and South Korea rose by between 0.09% to 0.54%. Key benchmark indices in Hong Kong, Indonesia, Singapore and Japan declined by between 0.03% to 0.24%.

China's annual inflation rate accelerated to 4.5% in January, well ahead of market expectations and breaking a five-month trend of easing price pressures as consumers ramped up spending during the Chinese Lunar New Year holiday season.

Japan's core machinery orders, considered a key leading economic indicator, fell 7.1% in December compared to a year earlier, the government reported Thursday. South Korea's central bank kept its key rate on hold at 3.25% for an eighth straight month on Thursday.

Trading in US index futures indicated a flat opening of US stocks on Thursday, 9 February 2012. US stocks registered mild gains on Wednesday, as investors awaited the outcome of negotiations on steps to tame Greece's debt crisis.