Sensex settles above 18,000 as world stocks rise

Key benchmark indices edged higher for the third straight trading session as world stocks rose. The barometer index, BSE Sensex, surged past the psychological 18,000 level. The Sensex attained its highest closing level in more than 28 weeks. The 50-unit S&P CNX Nifty scaled 29-week closing high. The Sensex jumped 353.84 points or 1.98%, off close to 30 points from the day's high and up about 200 points from the day's low. World stocks rose after China pledged to help resolve the euro-zone debt crisis and as Greek leaders said they will provide written austerity promises in exchange for a European Union-led bailout. Data showing sustained buying of Indian stocks by foreign funds underpinned sentiment.

Index heavyweight Reliance Industries (RIL) edged lower. Except BSE Oil & Gas index, all the other 12 sectoral indices on BSE were in the green. The market breadth was strong.



The Sensex has jumped 1,008.86 points or 5.86% in February 2012 so far. The barometer index has surged 2,747.49 points or 17.77% in calendar 2012 so far. From a 52-week low of 15,135.86 on 20 December 2011, the Sensex has risen 3,066.55 points or 20.26%. From a 52-week high of 19,811.14 on 6 April 2011, the Sensex has lost 1,608.73 points or 8.12%.

Coming back to today's trade, interest rate sensitive auto, realty and banking shares gained as a further decline in inflation in January 2012 reinforced expectations that the central bank will start cutting interest rates in the coming months to revive slowing economic growth. Auto major Tata Motors hit record high, with the stock extending Tuesday's gains triggered by strong Q3 results.

IT major TCS scaled record high as 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. ONGC rose after Oil Minister S. Jaipal Reddy told the media today, 15 February 2012, that a panel of ministers has approved divestment in ONGC through an auction.

Key benchmark indices surged in opening trade on firm Asian equities. The Sensex pared gains after hitting 28-week high above the psychological 18,000 level in morning trade. The market extended intraday gains to hit fresh 28-week high in afternoon trade. The market pared gains in mid-afternoon trade. The market once again pared gains after surging to fresh intraday high in late trade.

The BSE Sensex jumped 353.84 points or 1.98% to settle at 18,202.41, its highest closing level since 1 August 2011. The index jumped 382.78 points at the day's high of 18,231.35 in late trade. The index rose 151.73 points at the day's low of 18,000.30 in opening trade.

The S&P CNX Nifty jumped 115.90 points or 2.14% to settle at 5,531.95, its highest closing level since 27 July 2011. The Nifty hit a high of 5,542.10 and a low of 5,460.60 in intraday trade.

The BSE Mid-Cap index rose 2.1% and outperformed the Sensex. The BSE Small-Cap index gained 1.48% and underperformed the Sensex.

The total turnover on BSE amounted to Rs 4120 crore, higher than Rs 3556.76 crore on Tuesday, 14 February 2012.

The market breadth, indicating the overall health of the market, was strong. On BSE, 1,903 shares advanced and 1,079 shares declined. A total of 101 shares were unchanged

Among the 30-member Sensex pack, 27 logged gains while only three of them declined. Hindustan Unilever declined 0.75%.

Index heavyweight Reliance Industries (RIL) shed 1.43% to Rs 836.05, off day's high of Rs 855. As per reports, gas output from RIL's D6 block is expected to fall by about 10% to 34 million standard cubic metres a day (mmscmd) by April due to the entry of sand or water in the wells. The D6 block currently produces about 37 mmscmd of gas. This includes 30 mmscmd from D1 and D3 gas fields, where output has been declining for months, and 7 mmscmd from the MA oilfield that also produces natural gas.

ONGC rose 1.03% after Oil Minister S. Jaipal Reddy told the media today, 15 February 2012, that a panel of ministers has approved divestment in ONGC through an auction. Reddy, however, said no timeline has been set for the share sale. The government holds 74.14% stake in ONGC and it reportedly plans to sell 5% stake.

Interest rate sensitive auto stocks gained as a further decline in inflation in January 2012 reinforced expectations that the central bank will start cutting interest rates in the coming months to revive slowing economic growth. Lower interest rates may help revive demand for vehicles. Purchases of automobiles, including that of cars, utility vehicles and commercial vehicles are substantially driven by financing.

India's largest truck maker by sales Tata Motors jumped 6.91% to Rs 286.40. The stock hit a record high of Rs 292 in intraday trade today, 15 February 2012. Tata Motors' global vehicle sales rose 21% to 1.19 lakh units in January 2012 over January 2011. Sales of its Jaguar Land Rover brands, rose 44% to 29,293 units in January 2012 over January 2011. The marquee brands, which Tata Motors bought from Ford Motor Co. in 2008, are now the biggest contributors to the company's revenue.

Robust demand for Jaguar Land Rover vehicles helped Tata Motors post a 26% growth in worldwide passenger vehicle sales to 66,785 units in January 2012 over January 2011. Tata Motors' global sales of trucks and buses increased 15% to 53,014 units in January 2012 over January 2011.

The Tata Motors stock had risen 3.74% on Tuesday, 14 February 2012, boosted by strong Q3 results from the auto major. Consolidated net profit jumped 40.5% to Rs 3405.55 crore on 44.6% growth in net sales to Rs 45199.29 crore in Q3 December 2011 over Q3 December 2010. The result was announced during trading hours on Tuesday, 14 February 2012. Tata Motors said revenue grew on the back of growth in volumes, improved product and market mix.

India's largest utility vehicles maker Mahindra & Mahindra (M&M) gained 2.57%. India's largest car maker by sales Maruti Suzuki India advanced 3.04%.

India's largest motorcycle maker by sales Hero MotoCorp rose 0.85%. India's second largest motorcycle maker by sales Bajaj Auto gained rose 0.83%.

Interest rate sensitive banking stocks gained as a further decline in inflation in January 2012 reinforced expectations that the central bank will start cutting interest rates in the coming months to revive slowing economic growth.

India's largest commercial bank by net profit and branch network State Bank of India (SBI) gained 2.37%. During market hours on Monday, 13 February 2012, SBI 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 4.03%. India's second largest bank by net profit HDFC Bank rose 2.95% to Rs 532.95. The stock hit a record high of Rs 534.65 today, 15 February 2012.

Among other banking stocks, Axis Bank, Bank of India and IDBI Bank rose by between 4.77% to 8.09%.

India's largest non-ferrous metals maker by capacity Sterlite Industries rose 4.34%. The company during market hours today, 15 February 2012, said that a US bankruptcy court has rejected its claim for a refund of $50 million it had paid as part of a process to acquire US-based miner Asarco LLC. With the rejection of the claim, Sterlite will have to pay a total of $132.75 million in damages to Asarco for its unsuccessful takeover bid in 2009. Sterlite lost a bidding war for Asarco after a Texas bankruptcy court approved a rival restructuring plan for the company proposed by Asarco's parent, Grupo Mexico SAB.

Among other metal stocks, NMDC, Tata Steel, Steel Authority of India, Hindustan Zinc, National Aluminum Company and Hindalco Industries rose by between 0.39% to 5.25%

India's largest software services exporter by revenue, TCS, rose 1.75% to Rs 1241. The stock scaled a record high of Rs 1,248 in intraday trade today, 15 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.

India's third largest software services exporter by revenues Wipro rose 0.07%. India's second largest software services exporter by revenue Infosys gained 2.39%.

HCL technologies rose 0.46%. After market hours on Tuesday, 14 February 2012, the company said it has signed an agreement with State Street Bank and Trust Company (State Street) to provide business process outsourcing services in support of a variety of State Street's investment services businesses.

The main industry body -- the National Association of Software and Services Companies (Nasscom) last week 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.

L&T jumped 5.06%, with the stock extending Tuesday's 3.87% surge.

Bhel jumped 4.53%. As per reports, disinvestment of government stake in the state-run firm may happen in FY 2013.

Among other capital goods stocks, Havells India, BEML, ABB and Punj Lloyd rose by between 0.73% to 9.31%.

Reliance ADA Group shares extended recent gains. Reliance Communications, Reliance MediaWorks, Reliance Broadcast Network, Reliance Capital, and Reliance Power gained by between 2% to 12.74%.

Reliance Infrastructure gained 1.62%. After market hours on Tuesday, 14 February 2012, the company informed it has bought-back 44.30 lakh equity shares for Rs 234.32 crore, representing 1.66% of the pre buy-back paid up equity shares at an average price of Rs 528.91 per equity share. The shares were bought under the buyback program which commenced from 11 April 2011 and closed on 13 February 2012.

Interest rate sensitive realty shares gained as a further decline in inflation in January 2012 reinforced expectations that the central bank will start cutting interest rates in the coming months to revive slowing economic growth. Lower interest rates may help revive demand for properties. Purchases of both residential and commercial property are largely driven by finance. HDIL, DLF, Indiabulls Real Estate and Godrej Properties rose by between 0.56% to 6.48%.

Unitech jumped 6.72%. The company reported 50.4% fall in consolidated net profit to Rs 55.22 crore on 22.1% fall in net sales to Rs 513.90 crore in Q3 December 2011 over Q3 December 2010. The result was announced after market hours on Tuesday, 14 February 2012.

With property prices and interest rates rising with each passing year, the government is reportedly considering raising the tax exemption on interest paid on housing loans to up to Rs 3 lakh annually from the existing limit of Rs 1.5 lakh in the coming budget, which is scheduled to be tabled in Parliament on 16 March.

Cement stocks gained across the board. ACC, Ambuja Cements, and Jaiprakash Associates gained by between 0.5% to 8.12%.

UltraTech Cement rose 2.31% to Rs 1406.40. The stock hit a record high of Rs 1459.70 today.

India Cements jumped 14.11% to Rs 108.35. The stock hit a 52 week high of Rs 110.90 today.

Power generation stocks edged higher after Prime Minister Manmohan Singh initiated clearance of coal supplies to power generation firms. Adani Power, Torrent Power, Tata Power Company, and NTPC rose by between 0.52% to 13.08%.

Coal India will 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 31t March 2015. For power plants that have been commissioned up to 31st December 2011, FSAs will be signed 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 said that these arrangements would 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.

Cals Refineries clocked highest volume of 2.34 crore shares on BSE. Lanco Infratech (1.46 crore shares), GVK Power & Infrastructure (86.54 lakh shares), Voltas (85.38 lakh shares) and Resurgence Mines (83.76 lakh shares) were the other volume toppers in that order.

SBI clocked highest turnover of Rs 166.71 crore on BSE. Tata Motors (Rs 162.01 crore), L&T (Rs 132.25 crore), Voltas (Rs 100.97 crore) and Reliance Power (Rs 98.98 crore) were the other turnover toppers in that order.

Foreign institutional investors (FIIs) bought shares worth a net Rs 1030.12 crore on Tuesday, 14 February 2012, as per provisional data from the stock exchanges. FIIs have bought shares worth a net Rs 9588.68 crore in first ten trading sessions this month, 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 wholesale price index (WPI) rose a slower-than-expected 6.55% in January 2012 from 7.47% rise in December 2011, government data showed on Tuesday, 14 February 2012. The annual reading for November 2011 was revised upwards to 9.46% from 9.11% reported earlier.

After a gap of nearly nine years, the Reserve Bank on Monday, 13 February 2012, increased the bank rate by 350 basis points to 9.5% with immediate effect. "This (the increase) should be viewed and understood as one-time technical adjustment to align the Bank Rate with the marginal standing facility (MSF) rate rather than a change in the monetary policy stance," RBI said in a notification. The Bank Rate has lost its significant as a monetary policy tool as the central bank presently signals stance through changes in repo, the rate at which banks borrow short-term funds from RBI.

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%.

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.

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 markets rose on Wednesday after China pledged to help resolve the euro-zone debt crisis and as Greek leaders said they will provide written austerity promises in exchange for a European Union-led bailout. Key benchmark indices in UK, Germany and France were up by between 0.24% to 1.08%.

Gross domestic product across the 17-nation euro zone contracted by 0.3% in the final three months of 2011 compared to the previous quarter, the European Union statistics agency Eurostat said in a preliminary estimate released Wednesday.

Euro-area finance ministers canceled a Brussels meeting slated for today, 15 February 2012, and will hold a teleconference instead to prod Greece to do more to clinch an aid package worth 130 billion euros along with about 100 billion euros of debt relief from private bondholders. Greece needs the aid to make a 14.5 billion-euro bond payment on 20 March.

As per media reports, the leaders of Greece's two biggest political parties, New Democracy's Antonis Samaras and Pasok's George Papandreou, will send written commitments today to the so-called troika to stand by austerity measures

People's Bank of China Governor Zhou Xiaochuan Wednesday said he believes Europe can solve its issues and that China will expand investments in the area. He also repeated what was said by Chinese Premier Wen Jiabao recently, that China will become more involved in helping resolve the crisis via investments in the European Financial Stability, the region's rescue fund.

Asian stocks rose on Wednesday as optimism Greece will commit to austerity measures and the yen's drop to a three-month low against the dollar boosted the earnings outlook for Asian exporters. Key benchmark indices in Taiwan, China, South Korea, Hong Kong, Indonesia, Singapore and Japan were up by between 0.01% to 2.30%.

Trading in US index futures indicated that the Dow could gain 66 points at the opening bell on Wednesday, 15 February 2012