Nifty strikes at all time high

The Sensex started the day on strong note, but settled with marginal gains, amid high degree of volatility. A smooth rollover of positions in the derivatives market and firm Asian markets triggered a rally in first half of the day, taking the Sensex to highest level in nearly four months since 9 February 2007. However, sustained selling since afternoon on profit taking at higher levels capped gains. IT and banking stocks saw buying interest, while FMCG stocks came under selling pressure.

The 30-share BSE Sensex gained 26.29 points or 0.18% at 14,570.75. It opened higher above the 14,600 mark at 14,610.28 tracking firm Asian markets and also surged to strike an intra-day high of 14,682.10, by noon trade. This is its highest level in nearly four months since 9 February 2007. The Sensex was not able to strike all time high. It had hit an all-time high of 14,723.88 on 9 February 2007.

However, the S&P CNX Nifty, managed to strike all time high of 4,325.80 by afternoon trade today. It settled with gain of 1.25 points or 0.03% at 4,297.05, an all time closing high.

As per market data, marketwide rollover in the derivatives market was 82.8% from May 2007 contracts to June 2007 contracts. This is slightly higher than 82.5% during the April 2007 expiry. Nifty futures rollover was 75% as compared to 71.7% in the previous expiry. Higher rollover of positions indicates a bullish trend.

The total turnover on BSE amounted to Rs 4,678.12 crore.

The breadth, which indicates the overall health of the market, was positive on BSE, with 1,377 shares advancing as compared to 1218 that declined. 94 stocks remained unchanged. In the opening session, the breadth was strong when 1,141 shares had advanced as compared to 436 that had declined.

The BSE Mid-Cap Index rose 41.88 points or 0.67% to 6,264.28. The BSE Small-Cap Index ended at 7,473.87, up 60.84 points or 0.82%, from its previous close.

All the European markets, except Italy’s MIBTel index (down 0.01%) were trading with gains, while most of Asian markets advanced. The Nikkei average rose 0.47% to close at its highest in three months on Friday, 1 June 2007, as trading firms rose on Morgan Stanley's higher target prices and retail investors bought steel and other value stocks. The Nikkei added 83.13 points to 17,958.88, the highest close since 27 February 2007.

The Hang Seng index was down 0.15% or 31.60 points to 20,602.87

Among the 30-member Sensex pack, 17 advanced while the rest declined.

Pharma major Cipla advanced 2.92% to Rs 224 on 10.88 lakh shares, and was the top gainer. Buying interest seems to be returning in the stock after it had plunged sharply, when it had announced poor results late last month.

Shares from banking sector advanced despite market rumors of hike in CRR, due to easy liquidity in the money market and the RBI’s latest predisposition to use this blunt tool to suck out liquidity. BSE's banking sector index Bankex advanced 75.29 points or 0.99% at 7,682.64.

ICICI Bank (up 1% to Rs 928), State Bank of India (up 1.67% to Rs 1375), and HDFC Bank (up 1.65% to Rs 1158.50) advanced from banking and financial space.

Analysts expect a CRR hike of 25-50 basis points (100 basis points make 1%) from RBI to suck out liquidity in June 2007, when the equity market will see big issues (DLF and ICICI Bank) and high foreign inflows are expected.

They see Reserve Bank of India (RBI) continuing to tighten its fists on the monetary side, after the government, on Thursday, 31 May 2007, announced sparkling gross domestic product (GDP) growth of 9.4% in the year ended March 2007

IT pivotals posted gains for the second straight day today on renewed buying despite rupee inching towards its recent high. The BSE IT index surged 56.95 points or 1.17% at 4908.38, and was the top gainer among sectoral indices on BSE.

IT scrips had remained weak over the last few weeks. Satyam Computers (up 1.15% to Rs 475), TCS (up 0.89% to Rs 1219.35) and Infosys (up 0.87% to Rs 1937) rose.

IT stock have not performed in the market's recent surge due to stronger rupee. 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.

Rupee inched towards a recent a nine-year high today, 1 June 2007, as traders anticipated a burst of capital inflows into local equities, but was blocked again by state-run banks which bought dollars.

State-run engineering major Bharat Heavy Electricals advanced 0.86% to Rs 1,411. It had turned ex-bonus (bonus ratio 1:1) yesterday, 31 May 2007. Buoyed by liberal bonus issue and capex of Rs 3,200 crore to increase manufacturing capacity from the current 6,000 Mega Watt (MW) to 15,000 MW per annum, the stock has been buzzing on the bourses since the past few days.

Index heavyweight Reliance Industries (RIL) shed 0.76% at Rs 1,746.85 on 4.55 lakh shares. It surged to an intra-day high of Rs 1779, while its low for the day was Rs 1,745.30. It’s all-time high is at Rs 1,785.

Auto stocks were under selling pressure. A rise in crude oil prices coupled with margin pressure concerns pulled these stocks lower. Hero Honda declined 2.63% to Rs 713.10, on 1.14 lakh shares. Tata Motors (down 1.40% to Rs 747), and Maruti Udyog (down 0.91% to Rs 810.20) edged lower.

Car marker Maruti Udyog slipped 0.10% to Rs 817, after it said today, 1 June 2007, it had sold 59,400 vehicles in May 2007, up 11.2% from 53,396 units sold in May 2006. Earlier during the day, the stock had hit a high of Rs 830.50. Maruti sold 55,952 units in the domestic market in May 2007, up 9.9% from 50,904 units a year earlier. Its exports gained 38.4% to 3,448 units, from 2,492 units a year earlier.

The BSE FMCG index lost 16.85 points or 0.88% at 1890.53. ITC (down 1.41% to Rs 161.30), Hindustan Lever (down 1.23% to Rs 201), Nirma (down 2.53% to Rs 192.80), and Dabur India (down 1.86% to Rs 97.60), were the losers from the pack.

MIC Electronics was the top traded counter on BSE with total turnover of Rs 281.40 crore followed by Indiabulls Real Estate (Rs 243 crore), State Bank of India (Rs 99.20 crore), Unitech (Rs 86 crore) and Reliance Industries (Rs 80.35 crore).

Reliance Natural Resources (RNRL) topped in terms of volumes with 75.40 lakh shares changing hands on BSE. RNRL was followed by MIC Electronics (70 lakh shares), Petronet LNG (68.45 lakh shares), Himachal Futuristic Communications (HFCL) (60.25 lakh shares) and Indiabulls Real Estate (59.80 lakh shares).

Shares of some fertiliser manufacturers rallied, after staying flat in the recent market rally. Mangalore Chemicals (up 9.69% to Rs 18), Deepak Fertisilers (up 6.16% to Rs 92.25), RCF (up 4.01% to Rs 40.25), National Fertisilers (up 1.58% to Rs 22.45), GSFC (up 4.42% to Rs 182) and Chambal Fertilisers (up 2.94% to Rs 35.05) advanced. These shares generally come into action during the monsoon season when the demand for fertisilers goes up.

Shreyas Shipping & Logistics surged 7.39% to Rs 122 after it today, 1 June 2007, reported 82.3% surge in net profit in Q4 March 2007 to Rs 13.2 crore as against Rs 7.24 crore in Q4 March 2006. Total income increased 28.7% to Rs 40.82 crore (Rs 31.71 crore).

Sanghvi Movers advanced 5% to Rs 834.70 on renewed buying after the company came out with robust Q4 March 2007 results, on 29 May 2007. Sanghvi Movers’ net profit jumped 70.16% to Rs 15.11 crore in Q4 March 2007 as against Rs 8.88 crore Q4 March 2006. Sales rose 23.62% to Rs 52.13 crore (Rs 42.17 crore). The net profit jumped 99.81% to Rs 64.30 crore in FY 2007 as against Rs 32.18 crore FY 2006. Sales moved up 19.85% to Rs 178.63 crore (Rs 149.05 crore). At the time of announcement of results on 29 May 2007, the company had also announced a stock split in the ratio of five equity shares of Rs 2 each for every existing equity share of Rs 10.

SREI Infrastructure Finance surged 20% to Rs 86.15 as strong buying momentum continued after the company announced the tie-up with BNP Paribas, for equipment finance in India during trading hours, on 31 May 2007. The alliance involves setting up of a new 50:50 joint venture (JV) company. The current infrastructure equipment financing business of SREI Infrastructure Finance along with its insurance broking activity will be transferred to this new JV. The joint venture would be formed with an initial networth of Rs 800 crore.

For the third straight day, McDowell Holdings (MHL) rose. The stock jumped 20% to Rs 281.60. Listed on 30 May 2007, MHL had hit the roof on the first day of its debut to Rs 195.60, surging 20%, compared to the base price of Rs 163.

The listing of MHL on the bourses took place following a restructuring scheme undertaken at United Spirits (USL): the investment business of USL was transferred to MHL as a going concern.

TVS Motor Company spurted 5.86% to Rs 69.55 even though its two-wheeler sales declined 13.3% in May 2007. TVS Motor sold 1.08 lakh units in May 2007 compared to 1.24 lakh units sold in May 2006. Motorcycle sales fell 36.6% to 49,651 units from 78,271 units, but those of scooterettes rose 24% to 25,280 units from 20,396 units. Exports jumped 15% to 9,849 units.

TVS Electronics soared for the second straight session to Rs 60.20. The share price had jumped 20% to Rs 50.20 on Thursday, 31 May 2007, when TVS Electronics announced during market hours, that it has executed the business transfer agreement for transfer of the Contract Manufacturing Services Business at Tumkur (CMS Business) for a consideration of Rs 41.12 crore with Incap Contract Manufacturing Services (subsidiary of Incap Corporation, Finland).

Punj Lloyd rose 2.17% to Rs 220.95. It posted a 22% growth in net profit to Rs 23.18 crore in Q4 March 2007, from Rs 18.99 crore in Q4 March 2006. Sales spurted 91.06% to Rs 798.26 crore (Rs 417.81 crore).

Net profit surged 75.22% to Rs 61.59 crore in the year ended March 2007 from Rs 35.15 crore in FY 2006. Sales jumped 63.63% to Rs 2238.85 crore (Rs 1368.22 crore). The results were announced after trading hours on Thursday, 31 May 2007.

Sintex Industries slipped 0.02% to Rs 226.10, after surging to a high of Rs 237.50. It acquired 81% shareholding of US based Wausaukee composites Inc, a company organized under the laws of the State of Wisconsin. The acquisition of the shares of WCI is being undertaken by the company's step down subsidiary Sintex Holding USA, Inc.

WCI has an established presence in the medical imaging, mass transit, industrial/agricultural equipment, wind energy, commercial furnishings, recreation and corrosion-resistant materials handling sectors.

Cummins India was up 2.71% to Rs 313 after reporting a 21% rise in net profit in Q4 March 2007 to Rs 65.68 crore as against Rs 54.10 crore Q4 March 2006. Sales surged 30.25% to Rs 504.91 crore (Rs 387.66 crore). Net profit soared 37.76% to Rs 242.05 crore in the year ending March 2007 as against 175.70 crore in FY 2006. Sales flared up 25.84% to Rs 1840.78 crore (Rs 1462.77 crore). The results were announced after trading hours on Thursday, 31 May 2007.

India's inflation fell to its lowest level in nearly 10 months in mid-May 2007, data released today noon showed. The wholesale price index rose 5.06% in the 12 months to 19 May 2007, slowing from 5.27% a week earlier and well below a two-year high of 6.69% of late January 2007.

The central bank aims to keep inflation close to 5% this fiscal year, and bring it down to 4%-4.5% over the medium term.

On Thursday, 31 May 2007, the Dow Jones industrial average slipped 5.44 points, or 0.04%, to 13,627.64, after reaching a new all time high of 13,673.07. On Wednesday, 30 May 2007, the Dow had surged over 111 points and set a new closing high of 13,633.08.

However, the broader stock indices managed gains. The Standard & Poor's 500 index advanced 0.39 point, or 0.03%, to 1,530.62, after soaring to a record close Wednesday, 30 May 2007, for the first time since March 2000. The technology-dominated Nasdaq composite index showed more pronounced movement, rising 11.93 points, or 0.46%, to 2,604.52.

Crude oil prices rose on Friday, 1 June 2007, after a US government weekly fuel supply report showed an unexpected decline in crude oil stockpiles. Light, sweet crude for July 2007 delivery added 17 cents to $64.18 a barrel in Asian electronic trading on the New York Mercantile Exchange, mid-morning in Singapore.

Sterling performances by services and manufacturing sectors helped Indian economy grow 9.4% in 2006-07, the fastest rate in 18 years.

The growth even exceeded the government’s projection of 9.2% and is next only to 10.5% GDP expansion achieved in 1988-89. The figures were impressive also from the point of view that it is on the high base of 9% growth in 2005-06.

FIIs were net buyers to the tune of Rs 310.40 crore on 31 May 2007.