Market ends on a firm note; SBI, HLL rally

The market surged today on firm global markets, strong Q4 March 2007 results announced by the State Bank of India (SBI) on Saturday 12 May 2007, and on prospects of political stability in Uttar Pradesh. But the Sensex came off the higher level after an initial 229.86-point rally that took it above 14,000 to 14,026.02.

The Sensex remained firm but range bound for the day, hovering between 13,924.02 to 13,995, gaining between 128 to 200 points for the day. Its provisional closing was 13956.18, a gain of 160.02 points.

SBI surged and a host of other PSU banks rallied boosted by SBI’s strong Q4 showing. FMCG giant Hindustan Lever and cement pivotals soared, boosted by reports of a favourable monsoon. Tata Steel extended gains on expectation of strong Q4 March 2007 results.

But two-wheeler makers dropped hit by Hero Honda’s dismal Q4 results, and the rupee’s rise weighed on IT shares.

The market breadth remained strong as select side counters surged: 1,639 shares rose on BSE as compared to 928 shares that declined, while 85 stocks were unchanged. Gainers outpaced losers by a ratio of 1.76:1.

BSE clocked a turnover of Rs 4117 crore compared to Rs 4446.79 crore on Friday, 11 May 2007.

SBI jumped 5% to Rs 1205.80. On Saturday, 12 May 2007, India's largest public sector bank reported a 75% growth in net profit to Rs 1493.19 crore in Q4 March 2007, from Rs 853.29 crore in Q4 March 2006. Net interest income rose 22% to Rs 4320 crore. Net profit was up 3% to Rs 4541.31 crore in the year ending March 2007.

Tata Steel jumped4% to Rs 593. The stock has gained on renewed buying at lower level on expectation of strong Q4 March 2007 results. Tata Steel unveils Q4 results on 17 May 2007. Analysts expect strong Q4 results from the steel major on higher steel prices. Last month, Tata Steel had announced an attractively priced (Rs 300) rights issue in the ratio of 1:5.

FMCG giant Hindustan Lever advanced 4% to Rs 192.95 boosted by reports that the south-west monsoon is expected to hit the Kerala coast around 24 May 2007, one week earlier than the scheduled date of 1 June 2007. FMCG derives substantial revenue from rural sector.

The HLL stock had dropped 11.4% to Rs 185.45 in the fortnight ended 11 May 2007 after reporting a fall in net profit. During trading hours on 30 April 2007, HLL said net profit had declined 10% to Rs 392.89 crore in Q1 March 2007. Sales rose 14% to Rs 3184.32 crore.

Cement shares, too, got a boost from favourable reports of monsoon. Gujarat Ambuja Cements gained 4% to Rs 124.05, Grasim 2.5% to Rs 2490 and ACC 1.7% to Rs 865. Cement firms derive a large portion of their revenue from rural housing.

Index heavyweight Reliance Industries rose 1.7% to Rs 1618. On BSE, 8.8 lakh shares changed hands in the stock.

Drug maker Dr. Reddy's Laboratories lost 4.4% to Rs 653 after a US court on Friday, 11 May 2007, upheld a patent protecting Eisai Company’s Aciphex ulcer drug.

The Indian rupee appreciated to 40.92 per dollar on Monday, 14 May 2007, up 0.7% from Friday's close, as investors shrugged off worries about possible central bank intervention to cap currency gains.

The Indian meteorological department on Monday, 14 May 2007, forecast that annual monsoon rains would arrive in Kerala on 24 May 2007. "The predictors for this year suggest an early monsoon onset over Kerala," an official statement from the Indian Meteorological Department said. "The forecast model suggests that the monsoon onset over Kerala is likely to be on 24 May, with a model error of plus or minus three days," it added.

The centre’s customs and excise duty receipts were up 19.1% at Rs 13862 crore in April 2007 over April 2006, the finance ministry said on Monday, 14 May 2007. Customs collections were up 27.4% at Rs 7221 crore, while excise collections grew 11.3% to Rs 6640 crore in April 2007 over April 2006.