Battered commodities help market snap record losing streak

The key benchmark indices snapped last nine days losing streak as a sharp fall in crude oil prices eased macroeconomic worries. Interest rate sensitive banking and realty stocks rose as fall in crude oil prices eased inflationary concerns and expectations of further hike in interest rates to tame inflation. Auto stocks gained as sharp fall in crude oil prices eased concerns of hike in fuel prices. Index heavyweight Reliance Industries extended initial gains. PSU OMCs and airlines stocks surged on fall in crude oil prices. The market breadth was positive. The BSE 30-share Sensex was up 308.23 points or 1.69%.



The market edged higher in early trade. It extended initial gains to hit fresh intraday highs in morning trade. It trimmed gains in mid-morning trade. It continued to trade firm in early afternoon trade. Market slipped to day's low only to rebound thereafter in volatile afternoon session of trade. It surged to hit fresh intraday highs in mid-afternoon trade. It extended gains in late trade.

Crude oil prices extended Thursday's sharp slump. US crude futures were down $ 2.53 or 2.54% at $97.27 a barrel on Friday. The global crude oil prices had surged in past few months fuelling inflationary pressures. India imports majority of its crude oil requirements and high oil prices have raised concerns about widening current account deficit (CAD). High oil prices raise concerns about higher oil subsidy bill for the government and its negative impact on the government's fiscal position.

The BSE 30-share Sensex was up 308.23 points or 1.69% to 18,518.81. The index rose 357.90 points at the day's high of 18,568.48 in late trade. The Sensex gained 61.10 points at the day's low of 18,271.68 in afternoon trade.

The S&P CNX Nifty was up 91.60 points or 1.68% to 5,551.45.

The BSE Mi-Cap index rose 0.93% and the BSE Small-Cap index gained 0.67%. Both these underperformed the Sensex.

BSE clocked turnover of Rs 2990 crore higher than Rs 2734.96 crore on Thursday, 5 May 2011.

The market breadth, indicating the health of the market, was just about positive. On BSE, 1636 shares advanced while 1172 shares declined. A total of 121 shares remained unchanged.

Among the 30-member Sensex pack, 24 advanced while rest of them declined.

Index heavyweight Reliance Industries (RIL) rose 0.62%, gaining for the second straight day on reports company is planning to become a world leader in the rubber business and plans to invest $12 billion in the chemicals business to tap the rapidly growing market for hygiene and healthcare products in India. As per recent reports, the upstream regulator has asked RIL, the operator of the offshore KG-D6 field, to drill 11 more wells during the current financial year to reverse the decline in production of natural gas from the field.

State-run oil marketing companies (PSU OMCs) rose on sharp fall in crude oil prices. HPCL, Indian Oil Corporation and BPCL rose by between 2.63% to 3.62%.

Lower crude oil prices could decrease under-recoveries of state-run oil marketing companies (PSU OMCs) on domestic sale of diesel, LPG and kerosene at controlled prices. The government has already freed pricing of petrol.

Interest rate sensitive realty stocks rose as fall in crude oil prices eased worries of inflationary pressures and further hike in interest rates to tame inflation. The purchases of most of the residential and commercial properties are driven by finance. BSE realty index rose 1.45% and underperformed the Sensex. DLF, Orbit Corporation, Unitech, Indiabulls Real Estate, Anant Raj Industries rose by between 1.36% to 2.27%.

Banking pivotals rose across the board as fall in crude oil prices eased inflationary concerns and expectations of further hike in interest rates to tame inflation. BSE Bankex jumped 3.71% and outperformed the Sensex. India's largest bank by net profit and branch network State Bank of India rose 1.55%. The bank will review its interest rates next month, bank's Chairman Pratip Chaudhuri said on Tuesday after the central bank raised interest rates by a sharper-than-expected 50 basis points.

India's second largest private sector bank by net profit HDFC Bank gained 3.55%. India's largest private sector bank by net profit ICICI Bank jumped 5.16%.

Auto stocks gained as sharp fall in crude oil prices eased concerns of hike in fuel prices. The rise in fuel prices could affect demand in already rising interest rate scenario. BSE Auto index jumped 3.13% and outperformed the Sensex. India's top bike maker by sales Hero Honda Motors added 3.93% after jumping 6.11% on Thursday on bargain hunting after declining 10.41% in the prior eight trading sessions.

India's largest truck maker by sales Tata Motors rose 5.65%. Tata Motors' total sales rose 13% to 64,383 in April 2011 over April 2010. Truck and bus sales in the month surged 19% to 30,963 vehicles while exports grew 36% to 4,258 vehicles. Tata Motors' domestic sales of its car and sport-utility vehicles rose 1.2% to 23,387 autos in April 2011 over April 2010, aided primarily by the more-than-doubling sales of the Nano minicar. The company sold 10,012 Nanos in the month.

India's largest tractor maker by sales Mahindra & Mahindra (M&M) rose 2.98%. Sales at the company's automotive division rose 23% to 32,090 vehicles in April 2011 over April 2010. Domestic sales grew 21% to 30,349 while exports more than doubled to 1,741 units. The company sold 15,459 units of its utility vehicles Bolero, Scorpio and Xylo and sedan Verito, up 20% from a year earlier. Total sales of tractors were up 14% at 18,530 units.

India's second largest bike maker by sales Bajaj Auto gained 2.62%. The company announces its Q4 March 2011 result on 18 May 2011. Total sales rose 17% to 3.67 lakh units in April 2011 over April 2010.

India's largest car maker by sales Maruti Suzuki India rose 1.04%. Total sales rose a muted 4.4% to 97,155 units in April 2011 over April 2010. Domestic vehicle sales rose 8.9% to 87,144 units in April 2011 over April 2010 while exports fell 23.1% to 10,011 units in April 2011 over April 2010.

India's largest listed cellular services provider by sales Bharti Airtel declined 1.92% extending Thursday's 3.25% losses after consolidated net profit as per International Financial Reporting Standards (IFRS) declined 31.48% to Rs 1400.70 crore on 51.31% rise in net sales to Rs 16265.40 crore in Q4 March 2011 over Q4 March 2010. The Q4 result was announced before market hours on Thursday.

India's second largest listed cellular services provider by sales Reliance Communications rose 0.84%. Idea Cellular slipped 1.53%.

IT stocks rose on bargain hunting after the recent losses triggered by concerns profit margin may take a hit going forward. BSE IT index gained 1.84% and outperformed the Sensex. India's second largest software services exporter Infosys Technologies rose 1.54%. The company had on Saturday, 30 April 2011, announced top-level changes with veteran banker K. V. Kamath appointed as Chairman. The company appointed S.D. Shibulal as managing director and chief executive officer and named current chief executive officer S. Gopalakrishnan as co-chairman. N.R. Narayana Murthy will become chairman emeritus. These appointments are effective 21 August 2011.

India's largest IT exporter by sales TCS gained 2.7%. At the time of announcing Q4 March 2011 results on 21 April 2011, TCS management said wage hikes and currency volatility are the main threats to profit margins. TCS plans to increase wages by 12% to 14% for India-based staff. The company plans to raise wages by 2% to 4% in major overseas markets and 2% to 14% in emerging markets.

India's third largest IT exporter by sales Wipro rose 2.29%. Wipro Infotech, IT business unit of company said on Wednesday that it has been selected by the Government of Rajasthan as the implementation agency for enabling Rajasthan state portal through the implementation of e-form applications, state service delivery gateway and associated computing infrastructure. On 27 April 2011, the company said proposed wage hike would impact operating margins.

Capital goods stocks rose on bargain hunting. BSE Capital Goods index rose 1.3% and underperformed the Sensex. Praj Industries, Bhel, L&T, Thermax, Punj Lloyd, BEML and Siemens rose by between 0.07% to 2.98%.

Metal stocks were mixed. BSE Metal index rose 0.52% and underperformed the Sensex. Sterlite Industries, Sesa Goa, Hindustan Zinc and Hindalco Industries fell by between 0.02% to 2.71%. JSW Steel, Nalco, Jindal Steel & Power, Sail and Tata Steel rose by between 0.06% to 3.63%. LMEX, a gauge of six metals traded on London Metal Exchange, fell 3.99% on Thursday, 5 May 2011.

Cipla rose 0.54% reversing initial losses. The company announced after market hours on Thursday that net profit fell 22.33% to Rs 214 crore on 19% rise in total income to Rs 1689.55 crore in Q4 March 2011 over Q4 March 2010.

Airline stocks jumped as lower crude oil prices eased concerns about higher operating costs. Jet fuel prices are linked to crude oil prices. Jet fuel constitutes 40% of the operating cost for airliners. Jet Airways, Kingfisher Airlines and SpiceJet rose by between 10.46% to 11.87%.

Shares of Muthoot Finance settled at Rs 176.25 on BSE, a 0.71% premium over the initial public offer price of Rs 175 per share. The stock debuted at Rs 180, a premium of 2.85% to the initial public offer (IPO) price.

Muthoot Finance clocked highest volume of 2.26 crore shares on BSE. Bharti Airtel (1.61 crore shares), Cals Refineries (86.88 lakh shares), HFCL (72.40 lakh shares) and SpiceJet (65.13 lakh shares) were the other volume toppers in that order.

Bharti Airtel clocked highest turnover of Rs 566.93 crore on BSE. Muthoot Finance (Rs 399.60 crore), ICICI Bank (Rs 90.74 crore), State Bank of India (Rs 85.68 crore) and Tata Motors (Rs 62.06 crore) were the other turnover toppers in that order.

As per provisional data, foreign institutional investors (FIIs) sold shares worth Rs 779.48 crore and domestic institutional investors (DIIs) bought shares worth Rs 937.23 crore on Thursday, 5 May 2011.

The Reserve Bank of India (RBI) at its annual 2011-2012 monetary policy review on Tuesday, 3 May 2011, raised repo rate, the rate at which the RBI provides credit to banks, by 50 basis points to 7.25% and the reverse repo rate, the rate at which bank park funds with RBI, by 50 basis points to 6.25%. The RBI kept cash reserve ratio and bank rate unchanged at 6% each. The RBI increased savings banks deposit rate to 4% from 3.5% effective immediately.

While the growth momentum remained relatively firm during 2010-11, signs of moderation emerged in the latter half of the year, particularly with respect to capital goods and investment activity, the RBI said. Growth in GDP is expected to decelerate from 8.6% in 2010-11 to around 8% in 2011-12, which should contribute to some easing of demand-side inflationary pressures, particularly in the second half, as the full impact of monetary tightening is realised, the RBI said. However, even as this trend unfolds, persistently high rates of inflation raise the risks of inflationaryexpectations becoming unhinged, the RBI said.

The central bank said several factors will play a role in the inflation outlook, going forward. Keeping in view the domestic demand-supply balance and the global trends in commodity prices and the likely demand scenario, the baseline projection for WPI inflation for March 2012 is placed at 6% with an upward bias, the RBI said. Inflation is expected to remain at an elevated level in the first half of the year due to expected pass-through of increase in international petroleum product prices to domestic prices and continued pass-through of high input prices into manufactured products. Real estate shares slide after RBI's rate hike.

While the persistence of inflation over the next few months has been incorporated in this policy, the Reserve Bank of India will continue to persevere with its anti-inflationary stance, the central bank said in its guidance.

India's services sector gained momentum in April, with strong growth in new business orders despite stubbornly high inflation andexpectations of further interest rate increases, a survey showed on Wednesday. The seasonally adjusted HSBC Markit Business Activity Index, based on a survey of over 400 firms, edged up to 59.2 in April from 58.8 in March, marking its two-year anniversary above the 50 level that divides growth from contraction.

India's manufacturing sector maintained its strong rate of expansion in April, helped by higher output and employment, a survey showed. The HSBC Markit Purchasing Managers' Index, based on a survey of around 500 companies, nudged up to 58 in April, a tad up from March's 57.9, underlining considerable strength in the manufacturing sector.

The food price index rose 8.53% and the fuel price index climbed 13.53% in the year to 23 April 2011 government data on Thursday showed. In the previous week, annual food and fuel inflation stood at 8.76% and 13.53% respectively. The primary articles price index was up 12.11% compared with an annual rise of 12.08% a week earlier.

The India Meteorological Department (IMD) has predicted the southwest monsoon 2011 to be 98% (normal) of the long period average (LPA) with a model error of plus/minus 5%. IMD has indicated that there is very low probability for the season rainfall to be deficient (below 90% of LPA) or excess (above 110% of LPA).

Good rains, if they arrive on time and if they are well spread, would help ease food inflation and boost rural income. Rainfall that comes within 96% to 104% of the long-term average is considered a normal monsoon season, but this alone doesn't guarantee a good crop. The timing and spread of the rains are equally important. The quantity and geographical spread of rainfall during the monsoon season is crucial for India's agriculture sector, which lacks irrigation facilities on more than half its farm land. Monsoon rains usually enter India's mainland through the southern state of Kerala in the first week of June, gradually progressing to cover most of central and northern India by July, before retreating in September.

The corporate results announced so far have been good. The combined net profit of a total of 928 companies rose 16.6% to Rs 45922 crore on 24.8% rise in sales to Rs 410072 crore in Q4 March 2011 over Q4 March 2010.

European shares were mixed ahead of U.S. payrolls report. The key benchmark indices in France and Germany rose 0.1% and 0.47%, respectively. UK's FTSE 100 shed 0.43%.

Asian stocks declined on Friday after Wall Street was hit by a massive sell-off in commodities as a surge in weekly claims for jobless benefits intensified worries over a faltering economic recovery. The key benchmark indices in China, Hong Kong, Indonesia, Japan, Singapore, South Korea and Taiwan fell by between 0.29% to 1.52%.

US index futures were volatile. Trading in US index futures indicates that Dow could gain 5 points at the opening bell on Friday, 6 May 2011.

Wall Street stock indexes fell for a fourth straight day on Thursday as a massive sell-off in commodities spilled over into other markets, forcing investors out of higher-risk assets and rattling equities markets before Friday's U.S. payrolls data. Adding to a recent spate of poor economic data, weekly applications for unemployment insurance rose to an eight-month high, setting off alarms a day before the April unemployment report.