Sensex jumps 312 points in global rally

The market’s recovery gathered more steam today with the S&P CNX Nifty hitting the 4,000 mark, and the Sensex achieving its highest level in a month & a half. A rally in global markets and reports that India’s monsoon will be good this year, boosted the bourses. Index heavyweight Reliance Industries (RIL) struck an all-time high, aiding the surge in key indices.

The 30-share BSE Sensex jumped 311.50 points (2.33%), to settle at 13,695.58. It was the Sensex’s highest closing since 22 February 2007.

The S&P CNX Nifty advanced 96 points (2.45%), to end at 4,013.35. It had last closed above the 4,000 level on 22 February 2007.

The Sensex rose 581.77 points (4.43%) in the past two trading sessions. Strong FY 2008 forecast by Infosys in dollar terms announced on Friday (13 April) and some cooling of inflation, aided the surge. From a low of 12,455.37 on 2 April 2007, the Sensex has gained 1,240.21 points (9.95%) in a short while. Firm global bourses and continued FII-buying, have boosted the bourses over the past few days after the Sensex 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.

World stock markets hit record peaks on Monday (16 April) after top policymakers highlighted the strength and improving balance of global economic growth, encouraging already bullish investors to increase their appetite for risk. The G7 leaders said the US economy remained solid despite the weight of a housing slump, while Europe was showing a healthy upswing and Japan's economic recovery was on track.

Stocks marked out fresh peaks amid growing confidence that the benign backdrop of solid global economic growth and moderate inflation will continue. MSCI's All-Country World Index rose 0.5% to a life high of 387.55 points, a gain of almost 5% so far this year, on top of almost 19% last year. The FTSEurofirst 300 traded up around 0.7% at 1,564.8 points, its highest level since December 2000.

In Asia, Japan's Nikkei average rose 1.5% as the weaker yen boosted exporters' shares. Other regional bourses also rose, with China, South Korea and Australia hitting record highs.

Back home, the market-breadth was strong. Against 1,804 stocks advanced on BSE compared to 776 that declined. Also, 75 scrips were unchanged. Gainers outpaced losers by a ratio of 2.3:1.

Small-cap and mid-cap shares extended their recovery. The BSE Small-Cap Index added 127.67 points (1.89%), to settle at 6,884.13. The BSE Mid-Cap Index gained 89.45 points (1.6%), to finish at 5,665.95.

All sectoral indices on BSE ended in the green. The top-gainer was the BSE Oil & Gas Index, which rose 203.99 points (3.11%), to settle at 6,769.44. The BSE Capital Goods Index rose 274.85 points (2.9%), to settle at 9,745.82. The BSE Metal Index advanced 256.93 points (2.76%), to end at 9,560.58.

The BSE FMCG Index added 46.52 points (2.6%), to end at 1,820.48. The BSE Tech Index, which is a free-float index comprising of IT, telecom and media shares, gained 78.44 points (2.16%), to end at 3,716.58. The BSE IT Index advanced 78.56 points (1.55%), to finish at 5,150.28.

The BSE clocked a turnover of Rs 4054 crore compared to Friday (13 April)’s Rs 4724 crore.

RIL gained 3.5% to Rs 1460, a lifetime closing high. A strong 6.3 lakh shares changed hands in the counter on BSE. Reliance Industries sees robust demand for petrochemicals over the next 12-18 months, Chairman, Mukesh Ambani, said on Monday. The petrochemicals cycle has not peaked as yet, he added.

Meanwhile, RIL had allotted 12 crore warrants on a preferential basis to entities belonging to the promoter group, entitling the holders to apply for an equivalent number of fully paid-up equity shares of Rs 10 each at Rs 1402 per share, within 18 months from the date of issue.

Tata Steel jumped 4.4% to Rs 534, ahead of its board meeting on 17 April 2007, to consider a proposal for raising equity funds for investment in a special purpose vehicle (SPV) for the acquisition of Corus Group.

FMCG giant Hindustan Lever (HLL) gained 3% to Rs 213.70, on reports that the annual June-September monsoon rains were expected to be close to 100% of the long-term average this year. The Meteorological Department is likely to announce its first official forecast for 2007, later this week.

Buying was also conspicuous in cement shares, which are closely linked to rural demand. ACC gained 4.7% to Rs 783.90, Grasim rose 3.8% to Rs 2375 and Gujarat Ambuja Cements advanced 3.5% to Rs 112.40. Expectations of strong Q4 March 2007, also aided the recovery in cement scrips.

Cement firms are seen reporting strong Q4 March 2006 results due to higher prices. ACC unveils March 2007 quarter results on 19 April 2007, followed by Gujarat Ambuja Cements on 20 April 2007.

Credit rating agency ICRA jumped 20% to Rs 957.10. There were outstanding buy orders for 80,510 shares at the upper limit on BSE. A strong 32.5 lakh shares changed hands in the counter. The stock made a robust debut on Friday, settling at Rs 797.60 on that day, a premium of 142% over the IPO price of Rs 330.

Oil exploration major, ONGC, surged 3.6% to Rs 903.75. ONGC is looking at raising up to Rs 7000 crore over the next six months, to fund the expansion of its Mangalore refinery, the state-run firm's chairman said on Monday. The project will raise the refinery's capacity to an annual 15 million tonnes by 2010.

IT shares extended Friday’s gains. Wipro gained 3.5% to Rs 587.50, Infosys rose 1.9% to Rs 2127 and i-flex Solutions gained 4% to Rs 2336. Infosys, on Friday (13 April), gave a strong guidance for FY 2008 in dollar terms.

TCS rose 1.2% to Rs 1279, ahead of its Q4 results due later today. Eight brokerages expect 4.8 - 9.9%, sequential growth in TCS’ consolidated net profit as per US GAAP, between Rs 1157.30 crore and Rs 1213.70 crore, as compared to a net profit of Rs 1104.70 crore in the December 2006 quarter. They expect 5 - 7.1% growth in consolidated revenue as per US GAAP, between Rs 5105.30 crore and Rs 5206.20 crore, compared to Rs 4860.50 crore in the December 2006 quarter.

Cigarette maker ITC rose 3.3% to Rs 158, on reports that it plans to invest about Rs 15,000 crore in the next 5 - 7 years in hotels, agri-business and FMCG to transform itself into a diversified corporate conglomerate.

Telecom shares rose on continued strong growth in new subscriptions in March 2007. Bharti Airtel gained 2.8% to Rs 803, and Reliance Communications added 3.6% to Rs 436.70.

Copper makers were in demand on the back of firm global copper prices. While Hindalco rose 3.5% to Rs 145, Sterlite Industries gained 4% to Rs 526. Copper ended firm on Friday, underpinned by a fall in inventories and a strong demand outlook. Copper for delivery in three months on the London Metal Exchange (LME) closed at $7,705 a tonne, up $15.

Punj Lloyd jumped 8.8% to Rs 181.30, after the firm said it had won a Rs 530 crore pipeline order from Oman Gas Co.

Sun TV Network rose 3.6% to Rs 1718, on news that the company's board will meet on 24 April 2007, to consider a bonus issue.

Welspun Gujarat Stahl Rohren gained 1.4% to Rs 126.20, on securing orders worth Rs 1089 crore. The company's board also approved raising $50 million through issue of convertible or non-convertible securities or warrants to the promoter group to fund operations and investments.

Indiabulls Financial Services rose 1.8% to Rs 513, after the securities and broking firm posted a 95% jump in March-quarter consolidated net profit to Rs 1.57 billion.

Suzlon Energy jumped 6.4% to Rs 1175. On 12 April 2007, Suzlon Energy signed a contract with Tierra Energy of Austin, Texas, to provide 42 units of the S88-2.1 megawatt (Mw) wind turbine for wind power projects in Texas and Wyoming. Suzlon is also in a bidding war with France’s Areva for acquiring control over German wind turbine maker REpower.

Voltas rose 2.5% to Rs 87, after the company said on Saturday it had clocked a growth of over 30% in sales of its room air conditioner business in 2006/07, ahead of the industry growth rate of 20%. Voltas has set a target growth rate of over 30% in 2007/08, much in excess of the expected market growth rate.

Precision Containers gained almost 3% to Rs 17.60, after the company said on Monday it had bagged an export order worth Rs 11.32 crore from Swift Inter Trade for its recently developed packaging products.

Two-wheeler maker LML rose 5% to Rs 12.69, after the company said on Monday the strike at its plant had been withdrawn and the lockout would be lifted on 15 April 2007. It said in a statement that operations will resume shortly.

Praj Industries rose nearly 6% to Rs 463.50, ahead of its board meeting on 18 April 2007, to consider a bonus issue.

Bharati Shipyard rose 1.2% to Rs 389.10, after the company said on Monday it had bought all shipyard machinery and equipment of Swan Hunter (Tyneside) Shipyard for a sum, which the company did not disclose.

Apollo Tyres rose 1.8% to Rs 284.80, after the company said it expects its branded retread tyres business to contribute Rs 500 crore to annual revenues in three years. The company, on Friday, said its board will consider a stock-split along with FY-2007 results on 1 May 2007.

CMC dropped 4% to Rs 1205. CMC has reported a surge in net profit for the quarter ended March 2007, to Rs 19.55 crore (Rs 8.55 crore). Total income has declined to Rs 251.11 crore from Rs 259.72 crore.

IFCI lost nearly 2% to Rs 37.50, after NSE today said the derivative contracts in the counter had reached 95% of market-wide position limit and no fresh positions could be allowed in it on BSE.

Titan Industries jumped nearly 8% to Rs 1024. High networth individual and stockbroker Rakesh Jhunjhunwala has acquired 50,000 shares of Titan Industries on 12 April 2007. After the latest acquisition, the shareholding of Jhunjhunwala and that of persons acting in concert with him, has risen from the earlier 9.93% to 10.04%.

The season for earnings reportage has just begun. Overall, Q4 results are expected to remain strong. Stock-specific buying is likely to continue during the earnings season. Analysts will be closely watching what company managements say about the outlook for the current financial year (FY 2008). Citigroup expects overall corporate earnings growth to moderate to 15 - 16% in the current and next year, while FY 2007 (year ended 31 March 2007) could be the fifth straight year of 25 - 30% earnings growth.

Global liquidity still remains strong. It has helped global markets recover quickly from recent steep corrections. However, there are concerns that too much money will lead to inflated prices of assets and volatility.

Hardening of interest rates and strengthening of the rupee is likely to moderate India’s economic growth to 8.5% in 2007-08 from 9.2% in the last fiscal, the Confederation of Indian Industry (CII) has said.