Sensex collects 278 points, eyes 14,000 mark

Rallying by global markets and a strong FY 2008 guidance from IT major Satyam Computer propelled the domestic bourses higher, and the benchmark Sensex surged to a two-month high. Index heavyweight Reliance Industries (RIL) advanced to a record high, helping the key indices to a higher plane.

Sensex jumped 277.71 points (2%), to settle at 13,897.41, its highest closing since 22 February 2007. The S&P CNX Nifty gained 85.90 points (2.15%), to end at 4,083.55, its highest closing since 21 February 2007.

A surge in the benchmark Sensex in mid-afternoon trade was followed by a cooling of data released at 12:30 pm, showing a spike in inflation, driven by prices of food and manufactured goods, heightening concern that the central bank will again tighten policy at a review next week. But a rally once again gathered steam later after Finance Minister P Chidambaram said he expected annual inflation to ease to around 5.7% next week. Further moderation will depend on wheat arrivals, Chidambaram said. Shares of top banks recovered in volatile trade.

The wholesale price index rose 6.09% in the 12 months to 7 April 2007, higher than previous week's increase of 5.74%, data showed on Friday. The annual rate had moderated to below 6% recently after hitting 6.69% on 27 January 2007, its highest in more than two years, on the back of Reserve Bank of India (RBI) tightening policy and the government cutting duties on a range of items to rein in prices.

The market-breadth was strong. Against 1,483 scrips that rose on BSE, 1,096 had declined. Also, 95 scrips were unchanged. Gainers outpaced losers by a ratio of 1.35:1.

The BSE clocked a turnover of Rs 4303 crore compared to Thursday’s Rs 4170 crore.

Just like Infosys, Satyam Computer today gave a strong earnings and revenue guidance in dollar terms as per US GAAP. Also, just like Infosys, Satyam has given muted earnings and revenue guidance as per Indian GAAP.

Asian shares rebounded and European bourses rose solidly on Friday as fears faded that a sharp fall in Chinese stocks on Thursday could ripple through financial markets, as it did in February. MSCI's All-Country World Index rose 0.3% to 390.3 points, near its all-time peak and taking its year-to-date gains to 5.8%.

The FTSEurofirst 300 was up 0.6% at 1,568.1 points, and within sniffing distance of a high attained during December 2000.

In Asia, China's Shanghai Composite Index recouped most of Thursday's losses, adding 3.9%. The index is up 159% in the past 12 months. Japan's Nikkei clawed back 0.5% of Thursday's 1.7% slide -- its biggest fall in a month -- helped by exporters which benefited from the yen's retreat.

FIIs stepped up buying after Infosys gave a strong guidance for FY 2008 in dollar terms, putting to rest concerns about the impact of a slowdown in the US on India's IT sector. Their net inflow in three trading sessions, between Monday and Wednesday, aggregated Rs 2076.90 crore. However, foreign funds pulled out a net Rs 73.40 crore on Thursday. Their inflow for April 2007, till Thursday (19 April), aggregated Rs 4371 crore.

All sectoral indices of BSE gained today. On the back of a rally in Tata Steel, the BSE Metal Index was the top-gainer. It jumped 328.86 points (3.51%), to finish at 9,702.28. The BSE Oil & Gas Index rose 188.11 points (2.7%), to finish at 7,052.08. The BSE Tech Index, which is a free-float index comprising of IT, telecom and media shares rose 79.48 points (2.18%), to settle at 3,722.49. The BSE IT Index advanced 80.26 points (1.6%), to end at 5,055.09.

Reliance Industries (RIL) gained 3.4% to Rs 1543.75. The stock hit a high of Rs 1545, which is a lifetime high for the stock. The board of RIL meets on 26 April 2007, to consider Q4 March 2007 and FY 2007 results.

Housing finance major HDFC jumped 6.5% to Rs 1667. It was the top gainer from the 'A' group.

Satyam Computer jumped 6.4% to Rs 476.75, after it gave a strong guidance for FY 2008. Satyam Computer net profit rose 38% year-on-year in the March 2007 quarter, to Rs 394 crore. Just like Infosys, Satyam Computer has given strong earnings and revenue guidance in dollar terms as per US GAAP. Also, just like Infosys, Satyam Computer has given muted earnings and revenue guidance as per Indian GAAP.

Satyam Computer forecast 27 - 29% growth in basic earning per ADS for fiscal 2008, between $ 1.16 and $ 1.18. The US GAAP revenue is expected to rise 28 - 30%, between $ 1.87 billion and $1.9 billion for FY 2008. As per Indian GAAP, Satyam Computer has forecast between 18 - 20% growth in EPS for FY 2008, between Rs 25.32 and Rs 25.73. Satyam Computer has forecast 20 - 22% growth in revenue as per Indian GAAP for FY 2008.

Wipro lost 1.3% to Rs 571. Wipro today reported 44% year-on-year growth in net profit in the March 2007 quarter to Rs 861 crore as per US GAAP. It also forecast strong growth on more outsourcing and higher billing rates.

ONGC gained 3% to Rs 923. Oil prices rose as OPEC member, Nigeria, heads for weekend elections, ahead of the US May futures contract expiry later on Friday. Brent crude was up 51 cents at $66.45 a barrel, while US light crude added 83 cents to $62.66.

Tata Steel gained 6% to Rs 536. The stock had recovered from the last two days of a decline caused by equity dilution concerns after unveiling funding plans for its $12 billion takeover of Corus Group. The scrip rose on high volumes of 45.9 lakh shares on BSE.

State Bank of India (SBI) gained 2.3% to Rs 1078, after the largest lender said it planned to borrow up to Rs 10000 crore during 2007/08.

Bharti Airtel surged nearly 4% to Rs 848.80. The stock is now within striking distance of an all-time high of Rs 850, attained in February 2007. Bharti Airtel has launched a new set of prepaid cards, waiving processing fees. Named Airtel Happy Recharge, the cards will come in three denominations of Rs 299, Rs 399 and Rs 499 having a validity of 30 days. It will also have a single rate for local calls, and one rate for STD calls irrespective of the caller calling any other operator or even to a landline.

Reliance Communications gained nearly 5% to Rs 455.90. The company had registered strong growth in new subscriptions for the month just gone by.

Gujarat Ambuja Cements (GACL) rose 1.4% to Rs 115.10, after it said on Friday its net profit for the quarter ended 31 March 2007, rose to Rs 591 crore, including one-time gains

Telecom software firm Sasken Communication Technologies dropped nearly 3% to Rs 525. During trading hours today, the company reported a 86% year-on-year increase in consolidated net profit for the Jan-March 2007 quarter at Rs 11.70 crore. Consolidated revenues rose 73% to Rs 135 crore.

Vakrangee Softwares gained 2.6% to Rs 156.90, after posting a substantial increase in net profit in the January-March 2007 quarter to Rs 10.60 crore from Rs 3.17 crore in the Jan-March 2006 quarter.

India Cements lost 0.2% to Rs 170.50. It reported a surge in net profit in Q4 March 2007 quarter to Rs 139.81 crore (Rs 27.03 crore).

Mahindra & Mahindra rose 1.3% to Rs 743, after it said it would raise $300 million from the international market.

Balaji Telefilms gained 4% to Rs 168, on news it would invest up to Rs 60 crore for a 49% stake in a joint venture with News Corp.'s Star Group. The joint venture plans to launch a clutch of regional language channels in southern India.

Mukta Arts rose by its daily maximum limit of 5% to Rs 86.65, after the film producer posted a surge in net profit for the March 2007-quarter to Rs 14.98 crore from Rs 0.24 crore in the March 2006 quarter.

National Fertilizers rose nearly 4% to Rs 30.05, after its Jan-March 2007 quarter net profit surged.

CEAT rose nearly 3% to Rs 141, ahead of its Q4 March 2007 and FY 2007 results, which are due on Monday (23 April 2007).

Exide Industries rose 1.7% to Rs 45.60, after the company today reported 49% growth in net profit in the March 2007 quarter, to Rs 38.51 crore.

Shiva Cement dropped 4.5% to Rs 10, after its board approved issuing 14.5 million shares to ACC at Rs 11 a share, including a premium of Rs 9 per share.

Parsvnath Developers was down 0.5% to Rs 301.95. NSE has barred fresh derivative positions in the stock as the contracts had crossed the 95% market-wide position limit. Trading in Parsvnath Developers will be allowed only to reduce positions, NSE said.

Essel Propack fell almost 1% to Rs 72, after the packaging firm posted a 28% fall in the March 2007 quarter net profit to Rs 6.60 crore.

IFCI rose 2.1% to Rs 37.85, after the National Stock Exchange (NSE) lifted a ban on fresh positions in the scrip's derivative contracts.

Indiabulls Real Estate gained 6% to Rs 303.90. The Reserve Bank of India (RBI) has notified that under portfolio investment scheme (PIS), foreign institutional investors (FIIs) can now purchase equity shares and convertible debentures of Indiabulls Real Estate, up to 100% of its paid-up capital as the company has passed resolutions to this effect at the board of directors' and general body meetings.

Tanla Solutions (up 2% to Rs 400.65) extended gains after reporting strong March 2007 quarter results during trading hours on Thursday.

The Reserve Bank of India (RBI) reviews policy next Tuesday. It has raised the reserve requirement for banks three times since December and has raised its main lending rate five times since early-June 2006 to try and curb credit growth as well as inflation.

Strong FY 2008 guidance by Infosys, firm global bourses and continued FII-buying, have boosted the bourses this month after the Sensex had tanked 617 points in a single trading session on 2 April following the Reserve Bank of India (RBI)’s surprise hike in interest rates announced after trading hours on 30 March 2007. From a low of 12,455.37 on 2 April 2007, the Sensex has collected 1,442.04 points (11.5%) in a short while.

The Sensex’s all-time peak is of 14,723.88, which had been reached on 9 February 2007. Its all-time closing high is 14,652.09 of 8 February 2007.

The market may remain volatile next week ahead of the expiry of the April 2007 derivative contracts on Thursday (26 April 2007). RIL announces Q4 results on 26 April.