Sensex settles above 14500 after 110-point surge

The benchmark index, BSE Sensex, which stayed lacklusture for most part of the day, surged to cross the 14,500 level, as sudden buying momentum emerged in late-afternoon trade, led by index heavyweight Reliance Industries (RIL). The rise could also be attributed to short covering ahead of expiry of May 2007 derivatives contracts on Thursday, 31 May 2007. All the BSE's sectoral indices settled with gains, except the BSE IT index and FMCG index.

Sensex advanced 110.32 points or 0.77% at 14,508.21. This is Sensex's highest closing in over 3-1/2 months since 9 February 2007. Sensex today opened higher at 14,457.57, and touched an intra-day low of 14,372.07. It advanced to an intra-day high of 14,530.15, by 14:48 IST.

The S&P CNX Nifty, which struck a record high of 4,298.85 points in late trade, settled 36.70 points or 0.86% higher at 4,293.25, an all time closing high.

Volatility was the hallmark of today’s trading session, with the Sensex moving in and out of positive zone. Going forward, volatility is expected to remain high this week in the run-up to expiry of May 2007 derivatives contracts on Thursday, 31 May 2007.

The market breadth, which indicates overall health of the market, stayed positive on BSE, with 1352 shares advancing as compared to 1240 that declined. 96 remained unchanged. It was much stronger by 10:30 IST, with 949 shares advancing and 500 declining.

The BSE Mid-Cap index settled at 6,254.51, rising 48 points or 0.8%, while the BSE Small-Cap index gained 54 points or 0.7% to 7,388.33.

The total turnover on BSE amounted to Rs 4576.77 crore, while the NSE F&O turnover was at Rs 43290.08 crore.

Among the Sensex pack, 21 shares advanced while the rest declined.

Pharma major Cipla surged 5.64% to Rs 220, on high volumes of 11.62 lakh shares. It was the top gainer from the Sensex pack. The stock witnessed strong buying momentum today, after it was hammered in the past few weeks, for posting poor Q4 March 2007 results.

State run engineering major Bhel advanced 4.75% to Rs 2853, on 2.91 lakh shares. It had galloped to an all time high of Rs 2889.90 in intra-day trade. It had reported 32.54% rise in net profit in Q4 March 2007 to Rs 1150.37 crore from Rs 867.95 crore in Q4 March 2006, after trading hours on 25 May 2007. Sales rose to Rs 6919.68 crore, from Rs 5515.69 crore in March 2006. The net profit rose to Rs 2414.70 crore in the year ended FY 2007, from Rs 1679.16 crore in FY 2006. Sales rose to Rs 17237.53 crore in FY 2007, compared with Rs 13228.26 crore in FY 2006. Earlier, Bhel had set 1 June 2007 as record date for a liberal 1:1 bonus issue.

Engineering and construction major Larsen & Toubro advanced 3.30% to Rs 1844, after it reported 50% rise in net profit in Q4 March 2007 to Rs 701 crore from Rs 467 crore in Q4 March 2006. Sales rose 35.01% to Rs 6248.24 crore in the Q4 March 2007 as against Rs 4627.87 crore in previous Q4 March 2006.

The net profit rose 38.62% to Rs 1,403.02 crore in the year ended March 2007 as against Rs 1,012.14 crore in FY 2006. Sales rose 19.31% to Rs 17,578.84 crore (Rs 14,733.85 crore).

Led by Bhel and L&T, the BSE Capital Goods Index surged 2.8% to 10,896.14, and was the top performer among the sectoral indices on BSE.

Pharma major Ranbaxy Laboratories advanced 2.10% to Rs 390.40. Ranbaxy Laboratories Inc., the wholly owned subsidiary of Ranbaxy Laboratories, acquired the US rights to a group of 13 dermatology brands from Bristol-Myers Squibb Co.(BMS) for $26 million on Monday, 28 May 2007. Ranbaxy expects the 13 products, with a US presence of over 10 years, to contribute significantly to its incremental sales volume

Index heavyweight Reliance Industries (RIL) rose 1.67% to Rs 1752 on 8.53 lakh shares. It saw high volatility, as it moved in a range of Rs 1711.95 to Rs 1765.80. As per reports, the Directorate of Revenue Intelligence (DRI) officials on Monday visited Mukesh Ambani promoted Special Economic Zone (SEZ) at Jamnagar to ascertain the area used for setting up the export zone.

Cement major Gujarat Ambuja Cements was the top loser, down 1.47% to Rs 114.30 on 7.43 lakh shares.

HDFC (down 0.98% to Rs 1827), Bajaj Auto (down 0.89% to Rs 2183), NTPC (down 0.85% to Rs 160.90), and ITC (down 0.45% to Rs 165.35) were the other losers.

Reliance Energy (REL) rose 0.54% to Rs 553.50 on reports that t is scouting for coal mines in Indonesia and Australia to feed its proposed projects in Uttar Pradesh and Maharashtra.

IT pivotals showed mixed trends, after the rupee inched towards a nine-year high on Tuesday, 29 May 2007. IT stocks have not participated in the recent rally, due to concerns of stronger rupee.

The BSE IT index was down 0.14% to 4,908.15. Satyam Computers (up 0.53% to Rs 471.50), and TCS (up 0.46% to Rs 1230.35) advanced whereas Infosys (down 0.95% to Rs 1945.90) and Wipro (down 0.37% to Rs 537.20) declined. A rise in the rupee directly impacts revenue and profit of IT firms, which derive a lion’s share of revenue from exports to the US.

Other IT stocks, Tech Mahindra (down 0.92% to Rs 1490.15), and Hexaware Technologies (down 1.61% to Rs 159), also declined.

Recently listed real estate company Orbit Corporation surged 15.13% to Rs 252.60 on huge volumes of 84.38 lakh shares. It was the top traded counter on BSE with total turnover of Rs 207.53 crore. Unitech (Rs 150 crore), Reliance Industries (Rs 149 crore), Advanta (Rs 129 crore) and India Infoline (Rs 122 crore), followed Orbit Corporation in that order in terms of turnover on BSE.

Reliance Natural Resources (RNRL) topped the volumes chart on BSE with 1.83 crore shares followed by IFCI (96.70 lakh shares), NOCIL (87.60 lakh shares), Orbit Corp (84.38 lakh shares) and Sunflag Iron & Steel (74.30 lakh shares).

Tyre stocks rallied on renewed buying interest, on expectations of significant expansion in the profit margins during the current financial year. CEAT (up 2.86% to Rs 176.15), MRF (up 3.07% to Rs 4072), Goodyear India (up 5% to Rs 196.55) and Krypton Industries (up 10% to Rs 58.40) advanced.

The tyre industry has been suffering from high input costs and thin operating margins for the past few years. In the past two quarters, the industry has been able to pass on the rise in input cost to consumers through successive price hikes. This has significantly pushed up the industry’s profit margins in the last quarter. Analysts expect top tyre makers to close the financial year with a net profit margin of around 4% of net sales, against an average net profit margin of 2.5% during last year.

Ashapura Minechem jumped 10% to Rs 292.65 after Reliance Growth Fund purchased 8.94 lakh shares (2.3% stake) at Rs 263.09 per share in a block deal on 28 May 2007. Deutsche Securities Mauritius was the seller to the tune of 5 lakh shares at Rs 265 per share.

Bajaj Electricals jumped 10.39% to Rs 588 after its board recommended a liberal 1:1 bonus issue. Prior to this, the company had issued bonus in ratio of 1:2 (1 bonus share for every 2 held) in 1997. The latest equity share capital of Bajaj Electricals is Rs 8.64 crore. The latest book value per share is Rs 90.59.

Strides Arcolab soared 3.33% to Rs 329 after the company said during trading hours today, 29 May 2007, it would acquire fermentation unit of Italy's Diaspa S.p.a near Milan. The plant has approvals of US Food and Drug Administration and the European Union.

Dishman Pharmaceuticals & Chemicals rose 1.98% to Rs 247.25 after it announced 101.7% surge in net profit in Q4 March 2007 to Rs 14.20 crore as compared to Rs 7.04 crore in Q4 March 2006. Sales rose 23% to Rs 78.89 crore (Rs 64.16 crore). The net profit rose 33.1% to Rs 60.87 crore in the year ended March 2007 (FY 2007) compared to Rs 45.72 crore in the year ended March 2006. Sales rose 23% to Rs 279.95 crore (Rs 216.06 crore). The results were announed after trading hours on Monday, 28 May 2007.

Mahindra & Mahindra (M&M) advanced 3.88% to Rs 769 after it reported a 17.9% increase in consolidated net profit to Rs 1497.15 crore in FY 2007 compared with Rs 1269.72 crore in FY 2006. The company's total income was up 41.6% at Rs 17,912.28 crore in FY 2007 (Rs 12,648.41 crore). The results hit market during trading hours on 28 May 2007.

M&M also said that future outlook for the company remains positive. However, high interest rates, moderation in credit growth and uncertainties on the inflation front were a few worrisome factors.

Indraprastha Gas spurted 6% at Rs 120, after it reported 35.61% rise in net profit to Rs 40.06 crore in Q4 FY 2007 as against Rs 29.54 crore in Q4 FY 2006. Sales increased 21.08% to Rs 164.30 crore (Rs 135.70 crore). Profits jumped 29.98% to Rs 137.96 crore in FY 2007 as against Rs 106.14 crore in FY 2006. Sales scaled up 17.90% to Rs 614.10 crore (Rs 520.88 crore). The results were announced after trading hours on Monday (28 May 2007).

Adani Enterprises plunged 10% to Rs 212.25 after the market regulator on Monday, 28 May 2007, banned promoters of Adani group from dealing in stock markets for two years for their involvement in the Ketan Parekh securities scam. The regulator said that the promoters of Adani Enterprises, formerly Adani Exports, Adani Agro, Adani Impex, Crown International, Shahi Property Developers, Adani Properties and Advance Intercontinental India have been restrained from accessing the securities market either directly or indirectly for two years.

Easun Reyrolle rose 2% to Rs 885 after the company announced after trading hours on Monday, 28 May 2007 that its board will consider stock split on Wednesday, 30 May 2007, along with FY 2007 (year ended 31 March 2007) results.

Product design and system integrator Tata Elxsi surged 10.15% to Rs 360.30. The company was recently in news for its expansion plan in India by adding two more locations.

Power Finance Corporation jumped 9.06% to Rs 163.65 on value buying. It also struck an all time high of Rs 165.50 today.

Gayatri Projects rose 1.13% to Rs 272 after the firm said it had secured five orders aggregating Rs 455 crore.

The Nikkei rose 0.48% on Tuesday, 29 May 2007, as Sanyo Electric Co. surged after posting strong earnings. The Nikkei added 84.97 points to 17,672.56.

FIIs were net buyers to the tune of Rs 324 crore on Monday, 28 May 2007.

Finance Minister P Chidambaram said on Tuesday, 29 May 2007, that he aims to bring down inflation to 4%-4.5%, urging states to maintain adequate supplies of food for ensuring price stability.

The Reserve Bank of India (RBI) on Monday, 28 May 2007, asked Securitisation Companies/Reconstruction Companies (SC/RC) to declare their net asset values (NAVs) to enable investors know the value of their investment in the securities issued by such companies.

RBI has asked the SC/RC companies to use the ratings obtained from SEBI-registered rating agencies like Crisil, Icra etc for the purpose of arriving at NAV. The NAV should be calculated according to the past experience of the company in recoveries.

Commerce Minister Kamal Nath expects foreign direct investment (FDI) equity flows of $30 billion in the fiscal year ending in March 2008, almost doubling from the previous year. FDI equity flows increased almost three times to $15.7 billion in 2006/07, from $5.5 billion in 2005/06.

Crude oil prices bounced back to $70 per barrel in London on Tuesday due to concerns over Nigerian crude production at the beginning of the summer driving season in US. London Brent crude was up 29 cents at $70 per barrel after hitting $70.05 earlier. It had slipped 98 cents on Monday, 28 May 2007, after Nigerian oil unions called off the two-day strike that had threatened to halt oil supplies.