Sensex vaults 11.25% in January 2012

Key benchmark indices surged as firm global stocks lifted sentiment. The barometer index, BSE Sensex, regained the psychological 17,000 mark, a day after falling below that mark on Monday, 30 January 2012. The Sensex jumped 330.25 points or 1.96%, off close to 45 points from the day's high and up about 228 points from the day's low. The market breadth was strong. All the 13 sectoral indices on BSE were in green. World stocks rose after European Union (EU) leaders on Monday, 30 January 2012, signed a fiscal pact aimed at ending huge deficits in the region as part of efforts to control the region's sovereign-debt crisis.



Heavy buying of Indian stocks by foreign institutional investors (FIIs) helped Indian stocks score strong gains in January 2012. The Sensex jumped 1,738.63 points or 11.25% in January 2012. From a 52-week low of 15,135.86 on 20 December 2011, the Sensex has risen 2057.69 points or 13.59%. From a 52-week high of 19,811.14 on 6 April 2011, the Sensex has lost 2,617.59 points or 13.21%.

Coming back to today's trade, ICICI Bank jumped nearly 6% after good Q3 results. Index heavyweight Reliance Industries (RIL) rose more than 2% as the company's share buyback programme starts from tomorrow, 1 February 2012. IT stocks rose after European Union leaders on Monday, 30 January 2012, endorsed a treaty aimed at strengthening accountability and reining in spending by member nations as part of efforts to control the region's sovereign-debt crisis.

Interest rate sensitive realty stocks rose on expectations that the Reserve Bank of India will start cutting interest rates in the coming months to prop up slowing economy. Cement stocks gained ahead of announcement of monthly cement dispatches data for January 2012 by cement companies starting tomorrow, 1 February 2012. Auto shares rose ahead of the announcement of January 2012 sales figures by auto companies starting from tomorrow, 1 February 2012.

The market surged in early trade on mostly higher Asian stocks. The barometer index, BSE Sensex, regained the psychological 17,000 mark. The market trimmed gains after extending initial gains to hit fresh intraday high in morning trade. Key benchmark indices traded off intraday highs in mid-morning trade. The Sensex regained the psychological 17,000 mark after falling below that mark for a brief period in mid-morning trade. The market strengthened in early afternoon trade. Key benchmark indices hit fresh intraday highs in afternoon trade. The market remained firm in mid-afternoon trade. The market surged to fresh intraday high in late trade.

The BSE Sensex rose 330.25 points or 1.96% to settle at 17,193.55, its highest closing level since 27 January 2012. The index jumped 375.69 points at the day's high of 17,238.99 in late trade. The index rose 102.28 points at the day's low of 16,965.58 in early trade.

The S&P CNX Nifty rose 111.95 points or 2.20% to settle at 5,199.25, its highest closing level since 27 January 2012. The index hit a high of 5,215.40. The index hit a low of 5,120.15 in intraday trade.

The BSE Mid-Cap index outperformed the Sensex, rising 1.99%. The BSE Small-Cap index underperformed the Sensex, rising 1.41%.

The market breadth, indicating the overall health of the market, was strong. On BSE, 1,804 shares rose and 1,034 fell. A total of 108 shares were unchanged.

BSE clocked turnover of Rs 2794 crore, higher than Rs 2475.02 crore on Monday, 30 January 2012.

Among the 30-member Sensex pack, 25 gained while the rest declined.

Index heavyweight Reliance Industries (RIL) rose 2.51% as company's share buyback program starts from tomorrow, 1 February 2011. RIL said after market hours on Monday, 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 date of opening the buy-back is 1 February 2012 and the last date for the buy-back is 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.

India's largest private sector bank by branch network ICICI Bank surged 5.87% after net profit rose 20.26% to Rs 1728.10 crore on 24.14% increase in total income to Rs 10483.73 crore in Q3 December 2011 over Q3 December 2010. The stock was the top gainer from the Sensex pack. The result was announced during trading hours today, 31 January 2012.

ICICI Bank said advances increased by 19% year-on-year to Rs 246157 crore as on 31 December 2011 from Rs 206692 crore as on 31 December 2010. The bank said its Current and savings account (CASA) ratio increased to 43.6% at 31 December 2011, from 42.1% as on 30 September 2011. Net non-performing asset ratio decreased to 0.7% at 31 December 2011 from 0.8% at 30 September 2011 and 1.16% as at 31 December 2010. The bank had strong capital adequacy ratio of 18.88% and Tier-1 capital adequacy of 13.13% as on 31 December 2011.

India's largest commercial bank by net profit and branch network State Bank of India (SBI) rose 3.53% after the bank said after market hours on Monday, 30 January 2012, 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.

India's second largest bank by net profit HDFC Bank rose 2.47%. 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.

Punjab National Bank (PNB) fell 1.24%, reversing initial gains. The ratio of net non-performing assets (NPA) of the bank rose to 1.11% as on 31 December 2011 from 0.84% as on 30 September 2011 and 0.72% as on 31 December 2010. Net profit rose 5.53% to Rs 1150.04 crore on 30.83% increase in total income to Rs 10435.12 crore in Q3 December 2011 over Q3 December 2010. The result was announced during trading hours today, 31 January 2012. The bank said after market hours on Monday, 30 January 2012, that the board has approved preferential issue of shares to Government of India to the tune of Rs 1285 crore. The government currently holds 58% stake in Punjab National Bank.

IDBI Bank rose 4.06%. The bank's net profit fell 9.75% to Rs 409.81 crore on 21.74% increase in total income to Rs 6281.04 crore in Q3 December 2011 over Q3 December 2010. The result was announced after market hours today, 31 January 2011.

IDBI Bank said figures of the previous period are not strictly comparable as figures for the current period include working results of the two erstwhile wholly-owned subsidiaries namely IDBI Homefinance and IDBI Gilts consequent to their merger with the bank with effect from 1 January 2011.

Among other banks, Axis Bank (up 4.93%), Bank of Baroda (up 1.76%), Bank of India (up 2.46%), Canara Bank (up 3.38%), Federal Bank (up 2.06%), IndusInd Bank (up 5.17%), Kotak Mah. Bank (up 3.84%), Union Bank of India (up 6.56%) and Yes Bank (up 5.13%), edged higher.

At its third quarter policy review on 24 January 2012, RBI scaled down non-food bank credit growth projection to 16% for 2011-12 from 18% earlier. RBI said that non-food bank credit growth moderated from 21.3% at end-March 2011 to 15.7% by end-December 2011. Credit deceleration was particularly sharp for public sector banks, with growth moderating from 21% to about 15% during the same period, RBI said.

IT stocks rose after European Union leaders on Monday, 30 January 2012, endorsed a treaty aimed at strengthening accountability and reining in spending by member nations as part of efforts to control the region's sovereign-debt crisis. Europe is the second biggest outsourcing market for the Indian IT firms after the US.

India's largest software services exporter by revenue TCS rose 1.89%, with the stock gaining for the fifth straight day. The company announced during market hours today that it has inaugurated its Silicon Valley Customer Collaboration Center in Santa Clara, California. TCS had announced during trading hours on Monday that Diligenta, its UK based subsidiary, has successfully completed a multi-year, multi-million dollar transformation project at Phoenix Group, the UK's largest specialist consolidator of closed life funds.

TCS reported 21.8% growth consolidated net profit to Rs 2803 crore on 13.5% growth in revenue to Rs 13204 crore in Q3 December 2011 over Q2 September 2011. The result was announced on 17 January 2012. The company's management at a post-result conference call said that out of a total of 130 discretionary projects that the company is pursuing, 50% are facing delays in decision making even as there are no project cancellations so far. The management also said that out of a total of 120 top clients surveyed, two-thirds have flat or marginally increased budgets and remaining one-thirds has reduced budgets. The company said the pipeline is intact but discretionary spend may lag ramp up in volumes in Q4 March 2012.

India's second largest software services exporter by revenue Infosys rose 1.38%. 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 0.88%. 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 announced the 3rd quarter results on 20 January 2012.

Among other IT shares, Rolta India (up 4.28%), Tech Mahindra (up 3.54%), Oracle Financial Services Software (up 2.36%), HCL Technologies (up 2.04%), MphasiS (up 1.47%), iGATE Patni (up 1.16%) and Mahindra Satyam (up 0.55%), edged higher.

Interest rate sensitive realty stocks rose on expectations that the Reserve Bank of India will start cutting interest rates in the coming months to prop up slowing economy. Lower interest rates may help revive demand for properties. Purchases of both residential and commercial property are largely driven by finance. Indiabulls Real Estate (up 6.84%), DLF (up 5.29%), HDIL (up 5.22%), Oberoi Realty (up 2.52%), Unitech (up 2.36%), Anant Raj Industries (up 2.01%), D B Realty (up 1.64%), Godrej Properties (up 1.21%), Phoenix Mills (up 1.08%), Sobha Developers (up 1.08%) and Parsvnath Developers (up 0.6%), edged higher.

Cement stocks gained ahead of announcement of January 2012 shipment figures by cement companies starting tomorrow, 1 February 2012. Jaiprakash Associates (up 5.35%), Madras Cement (up 2.63%), Shree Cement (up 2.55%), UltraTech Cement (up 2.28%), India Cements (up 2.15%), ACC (up 1.84%), Prism Cement (up 1.55%), Heidelberg Cement India (up 1.35%), J K Cements (up 0.18%) and Ambuja Cements (up 0.16%), edged higher.

Auto shares rose ahead of the announcement of January 2012 sales figures by auto companies starting from tomorrow, 1 February 2012. India's largest tractor maker by sales Mahindra & Mahindra (M&M) gained 1.15%. M&M is reportedly planning to expand the production of its latest sports utility vehicle XUV500 to about 3,000 units per month in the next 2-3 months because of strong demand.

India's largest truck maker by sales Tata Motors rose 4.06%, with the stock extending recent strong gains. Tata Motors' global sales rose 33% to 99,853 units in December 2011 over December 2010. Its UK-based Jaguar Land Rover unit sold 30,981 vehicles in December, up 45% from a year earlier. Sales of Jaguar sedans grew 9% to 4,726 autos while those of Land Rover sport-utility vehicles surged 54% to 26,255 units. Tata Motors said it sold 48,099 trucks and buses globally in December, up 28% from a year earlier.

India's largest car maker by sales Maruti Suzuki India fell 1.10%. Maruti Suzuki's Chairman R.C. Bhargava said last week that that the steep fall in the company's Q3 December 2011 earnings represents the bottom of a period of bad news and that the company would fare better in Q4 March 2012. Maruti's net profit fell 63.6% to Rs 205.60 crore on 17.4% decline in net sales (net of excise) to Rs 7663.60 crore in Q3 December 2011 over Q3 December 2010. The company announced the results on 23 January 2012.

Maruti Suzuki said its total vehicle sales in the domestic market declined 29.43% to 2.11 lakh units in Q3 December 2011 over Q3 December 2010. Total exports fell 11.02% to 27,725 units. Maruti said vehicle sales during the quarter were impacted by sluggish market conditions caused by higher fuel prices and interest rates. Additionally, the company lost around 40,000 units in production due to labour unrest at the Manesar plant. The company said depreciation of rupee during the quarter adversely impacted the bottomline through higher cost of imports for the company and its vendors and royalty.

India's second largest bike maker by sales Bajaj Auto rose 3.58% after the company unveiled a new motorcycle, Pulsar 200NS in Mumbai on Monday, 30 January 2012. Price of 2012 Pulsar will be revealed during its launch in April 2012 and it is expected to be under Rs 1 lakh, reports indicated..

Bajaj Auto's profit after tax (PAT) jumped 19% to Rs 795 crore on 21% growth in turnover to Rs 5154 crore in Q3 December 2011 over Q3 December 2010. The company said PAT before exceptional items jumped 25% to Rs 834 crore in Q3 December 2011 over Q3 December 2010. The company announced the results on 19 January 2012.

India's largest two-wheeler maker by sales Hero MotoCorp rose 2.18%. During market hours on 19 January 2012, the company reported 42.89% growth in net profit to Rs 613.03 crore 16.85% growth in turnover to Rs 6031.45 crore in Q3 December 2011 over Q3 December 2010. Hero MotoCorp said it notched up highest ever quarterly turnover (net sales plus other operating income) in Q3 December 2011.

TVS Motor Company rose 2.95% after company announced during market hours today that the net profit rose 1.39% to Rs 56.53 crore on 7.01% increase in total income to Rs 1762.22 crore in Q3 December 2011 over Q3 December 2010.

Titan Industries rose 0.60% after net profit rose 19.2% to Rs 163.91 crore on 25.6% growth in revenue to Rs 2471.48 crore in Q3 December 2011 over Q3 December 2010. The result was announced during trading hours today, 31 January 2011.

Reliance Anil Dhirubhai Ambani (ADA) Group shares surged. Reliance Communications (up 6.28%), Reliance Broadcast network (up 6.05%), Reliance Power (up 4.75%), Reliance Infrastructure (up 4.08%), Reliance Capital (up 2.14%) and Reliance MediaWorks (up 1.11%), edged higher.

Siemens fell 1.19% as profit after tax (PAT) fell 70% to Rs 71 crore on 8% fall in sales to Rs 2361 crore in Q1 December 2011 over Q1 December 2010. The result was announced during trading hours today, 31 January 2012. New orders rose 11% to Rs 2834 crore in Q1 December 2011 over Q1 December 2010 after excluding the effect of a large order win in Q1 December 2010, Siemens said.

Dabur India rose 1.35% after consolidated net profit rose 11.90% to Rs 172.82 crore on 34.61% increase in total income to Rs 1463.08 crore in Q3 December 2011 over Q3 December 2010. The result was announced during trading hours today, 31 January 2012.

ICICI Bank clocked a highest turnover of Rs 143.98 crore on BSE. State Bank of India (Rs 142.39 crore), L&T (Rs 91.44 crore), Tata Steel (Rs 77.28 crore) and Coal India (Rs 61.04 crore), were the other turnover toppers on BSE in that order.

Avance Technologies reported a highest volume of 2.23 crore shares on BSE. Cals Refineries (66.72 lakh shares), GVK Power & Infrastructure (64.37 lakh shares), Suzlon Energy (64.18 lakh shares) and Lanco Infratech (53.33 lakh shares), were the other volume toppers on BSE in that order.

Investors' focus is currently on Q3 results. Mahindra Satyam unveils Q3 results tomorrow, 1 February 2012. Marico, RCF and Corporation Bank announce Q3 results on Thursday, 2 February 2012. Dr. Reddy's Laboratories, Power Finance Corporation, Hindustan Copper and HPCL report Q3 results on Friday, 3 February 2012. Hindustan Unilever, National Aluminium Company and India Cements announce Q3 results on 6 February 2012.

Mahindra & Mahindra and GMR Infrastructure unveil Q3 results on 7 February 2012. ONGC, Power Grid Corporation of India and Tech Mahindra unveil Q3 results on 8 February 2012. Tata Steel, Hindalco, ACC and Ambuja Cements unveil quarterly results on 9 February 2012. Tata Power, BPCL, Britannia Industries, Sun TV Network and Neyveli Lignite Corporation unveil Q3 results on 10 February 2012. JSW Steel announces consolidated Q3 results on 10 February 2012. The company has already announced its stand-alone results.

Aditya Birla Nuvo and Ashok Leyland announce Q3 results on 11 February 2012. Indian Oil Corporation, Sun Pharmaceuticals Industries and Steel Authority of India (Sail) unveil Q3 results on 13 February 2012. Tata Motors and Shipping Corporation of India unveil Q3 results on 14 February 2012. Ranbaxy Laboratories announces Q4 December 2011 results on 23 February 2012.

The government today, 31 January 2012, lowered slightly its estimate of the country's growth in gross domestic product for the last fiscal year ended 31 2011, to 8.4% from 8.5%.

The growth rate of eight core industries has slowed down to 3.1% in December last year from 6.3% in the same month previous year, as per latest data. These eight core sectors have a combined weight of 37.9% in the Index of Industrial Production (IIP).

Meanwhile, the government is reportedly working on bailout packages to help the financially distressed states of West Bengal, Punjab and Kerala. A media report quoting a finance ministry official said the government was taking this step to win political backing for key policy reforms that it plans to implement this year.

The Reserve Bank of India (RBI), last week, took liquidity easing measures by cutting the cash reserve ratio (CRR) requirement for banks by 50 basis points to 5.5% from 6% at Third Quarter Review of Monetary Policy 2011-12. The central bank said that as a result of the reduction in the CRR by 50 basis points, around Rs 32000 crore of primary liquidity will be injected into the banking system. The central bank said the large structural deficit in the system presents a strong case for injecting permanent primary liquidity into the system.

The RBI kept its key lending rate viz. the repo rate unchanged at 8.5%. RBI has cut the baseline projection of GDP growth for 2011-12 to 7% from 7.6%. The growth-inflation balance of the monetary policy stance has now shifted to support growth, while at the same time ensuring that inflationary pressures remain contained, the central bank said.

The reduction in CRR can be viewed as a reinforcement of the guidance that future rate actions will be towards lowering interest rates, RBI said. However, the timing and magnitude of future rate actions is contingent on a number of factors, RBI said. In the absence of credible fiscal consolidation, the Reserve Bank of India will be constrained from lowering the policy rate in response to decelerating private consumption and investment spending, it said. The forthcoming Union Budget must exploit the opportunity to begin this process in a credible and sustainable way, the RBI said.

The budget for 2012/13 ending March will be presented after elections scheduled in five states, Finance Minister Pranab Mukherjee said on 2 January 2012. Polling for assembly elections in five states concludes in early March 2012. The annual budget is usually presented on the last working day of February.

A record voter turnout of 77% in Punjab and high 70% polling in Uttarakhand on Monday, 30 January 2012, threw political parties into a tizzy as the current round of assembly polls reaches the halfway mark with a major four-cornered contest looming in Uttar Pradesh (UP) besides a smaller, but no less hard fought showdown in Goa. Seven-phase polling for assembly elections in Uttar Pradesh begins on Saturday, 4 February 2012.

European stocks edged higher Tuesday following the European Union summit, which has agreed on its fiscal union pact and signed off on the details of a euro 500 billion ($660 billion) permanent bailout fund for the euro zone. Key benchmark indices in France, Germany and UK rose by between 0.82% to 1.27%.

At a summit meeting on Monday, European leaders agreed on a permanent rescue fund for the euro zone and most endorsed a German-inspired stricter budget discipline, but they fell short of reconciling fiscal austerity with growth.

Most Asian shares rose on Tuesday, 31 January 2012, after Greek Prime Minister Lucas Papademos raised hopes for a deal to be reached this week to avoid a default, but markets were starting to worry that Portugal might need a second rescue. Key benchmark indices in Hong Kong, Indonesia, Singapore, Japan, China, South Korea, and Taiwan rose by between 0.11% to 1.48%.

Japanese factory output rose more than expected in December as companies made up for disruptions caused by severe flooding in Thailand, but a sustained recovery is far from assured amid renewed yen rises and slowing global growth. Industrial output rose 4% in December, more than a median market expectations and rebounding from a 2.7% drop in November, trade ministry data showed on Tuesday.

Ratings agency Standard & Poor's warned it may downgrade "a number of highly rated" Group of 20 countries as of 2015 if their governments fail to enact reforms to curb rising health-care spending and other costs related to aging populations. Developed nations in Europe, as well as Japan and the United States, are likely to suffer the largest deterioration in their public finances in the next four decades as aging populations strain social safety nets, S&P said in a report published on Monday.

Trading in US index futures indicated that the Dow could gain 65 points at the opening bell on Tuesday, 31 January 2012. US stocks closed with minor losses Monday as telecommunications and technology stocks advanced, offsetting concern that came with Portugal's soaring borrowing costs. The Commerce Department reported US consumer spending came to a virtual standstill in December after climbing 0.1% the month before.