Market gains as monsoon picks up, food inflation eases

Pick up in monsoon rains and easing of food inflation helped equities registers gains during the week ended Friday, 22 July 2011. Trading was choppy due to stock specific action based on Q1 June 2011 result announcements. A second bailout package for Greece boosted world stocks on Friday, 22 July 2011.

The Sensex rose 160.38 points or 0.86% to settle at 18,722.30 in the week ended Friday, 22 July 2011, its highest closing level since 8 July 2011. The 50-unit S&P CNX Nifty rose 52.85 points or 0.95% to settle at 5,633.95, its highest closing level since 8 July 2011.



The BSE Mid-Cap index underperformed the Sensex, rising 39.37 points or 0.56% to 7,046.12. The BSE Small-Cap index outperformed the Sensex, rising 100.27 points or 1.20% to 8,463.49.

Annual inflation in the Food Articles group declined to 7.58% in the week ended 9 July 2011, from 8.31% in the previous week, the Commerce & Industry Ministry said in a statement. Inflation in the Primary Articles group inched lower to 11.13% in the week under review, from 11.58% in the week ended 2 July 2011. Inflation in the Fuel & Power group remained static at 11.89% as compared to the previous week, the data showed.

Trading for the week began on a negative note. Key benchmark indices edged lower for the second straight day on Monday, 18 July 2011, as world stocks fell on Europe's sovereign-debt worries and amid a political standoff in the US over raising the US government's debt limit. The BSE Sensex was down 54.88 points or 0.3% to 18,507.04. The S&P CNX Nifty was down 14.05 points or 0.25% to 5,567.05.

Key benchmark indices surged to their highest closing level in more than a week on Tuesday, 19 July 2011, as European stocks and US index futures rose on the back of solid financial results from Swiss pharmaceuticals group Novartis AG and an upward revision in full year earnings forecast on Monday, 18 July 2011, from IBM, the world's biggest computer-services company. The BSE Sensex advanced 146.83 points or 0.79% to settle at 18,653.87. The S&P CNX Nifty rose 46.50 points or 0.84% at 5,613.55.

Comments from Finance Minister Pranab Mukherjee that inflation is expected to remain high between August-December 2011 pulled the market lower in what was a choppy trading session on Wednesday, 20 July 2011. Mukherjee's comments that India's exports growth may not be sustained on lingering concerns over the euro zone debt woes, also weighed on the sentiment. The BSE Sensex was down 151.49 points or 0.81% to 18,502.38. The S&P CNX Nifty was down 46.50 points or 0.83% to 5,567.05.

Weak global cues pushed Indian stocks lower for the second straight session on Thursday, 21 July 2011. European stocks dropped on Thursday after data from China and Europe pointed to a sharp slowdown in manufacturing activity. The BSE Sensex fell 66.19 points or 0.36% to 18,436.19. The S&P CNX Nifty fell 25.45 points or 0.46% to 5,541.60.

Indian shares surged to attain two-week closing highs on Friday, 22 July 2011, as world stocks advanced after European Union officials on Thursday, 21 July 2011, hammered out a new aid package for Greece and plans to prevent the spread of the sovereign debt crisis. The BSE Sensex rose 286.11 points or 1.55% to 18,722.30. The S&P CNX Nifty rose 92.35 points or 1.67% to 5,633.95.

Among the 30 Sensex shares, 19 gained and the others declined.

India's largest listed cellular services provider Bharti Airtel was the biggest Sensex gainer last week. The stock rose 4.67% to Rs 410.95. The company unveils its Q1 results on 3 August 2011.

India's second largest IT company by sales Infosys was the second biggest Sensex gainer. The stock rose 3.47% to Rs 2825.35 on bargain hunting after a recent decline triggered by disappointing Q1 June 2011 results announced on 12 July 2011. Consolidated net profit as per International Financial Reporting Standards fell 5.3% to Rs 1722 crore on 3.2% growth in revenue to Rs 7485 crore in Q1 June 2011 over Q4 March 2011.

India's largest copper maker by sales Sterlite Industries was the third biggest Sensex gainer. The stock rose 3.43% to Rs 168.65. The company unveils its Q1 results on Monday, 25 July 2011.

DLF (up 3.24%), Tata Power Company (up 3.23%), ITC (up 2.98%), Bharat Heavy Electricals (up 2.55%), Bajaj Auto (up 2.03%), Tata Steel (up 1.92%) and HDFC (up 1.82%), edged higher from the Sensex pack.

India's largest private sector firm by market capitalisation Reliance Industries (RIL) was almost unchanged at Rs 873.60. The company will announce Q1 results on Monday, 25 July 2011. RIL is seen reporting decent Q1 results on Monday, 25 July 2011, as higher refining margins offset lower petrochemicals margins and lower KG-D6 gas production. RIL is seen reporting 15.44% growth in net profit to Rs 5600.35 crore on 28.7% growth in net sales to Rs 74951.47 crore in Q1 June 2011 over Q1 June 2010, as per average estimate of 10 brokerages. Analysts see RIL's average KG-D6 gas volume declining to 49 mmscmd in Q1 June 2011.

Engineering & construction major Larsen & Toubro rose 0.41% to Rs 1825.50 as its unit, L&T Finance Holdings, comes out with an initial public offering (IPO) on 27 July 2011. L&T Finance Holdings has set a price band of Rs 51-59 for its Rs 1245-crore IPO. Subscriptions will close on 29 July 2011.

India's largest commercial vehicle maker by sales Tata Motors was the biggest Sensex loser last week. The stock fell 3.79% to Rs 996.85. The company reported a 1% fall in its global auto sales to 89,846 units in June 2011 over June 2010, primarily due to lower demand for Jaguar sedans globally and its cars and sport-utility vehicles in India. Global sales of trucks and buses in the past month, however, grew 13% to 45,285 vehicles. The figure includes sales of Tata Daewoo and Tata Hispano Carrocera commercial vehicles. Global sales of cars and SUVs slipped 12% in June to 44,561 vehicles while those in India decreased 21% to 24,203 units. Total sales of Jaguar and Land Rover vehicles increased 1% to 20,358 units. Sales of Land Rover SUVs jumped 22% to 16,320 vehicles but that of Jaguar cars slumped 40% to 4,038 units.

State-run NTPC declined 3.07% to Rs 183.35. NTPC has signed a memorandum of understanding with the state government of Kerala on 18 July 2011 to develop 200 megawatts wind energy based power projects in the state.

India's third largest IT company by sales Wipro fell 2.16% to Rs 405.65. The company's consolidated net profit as per International Financial Reporting Standards rose a mere 1% to Rs 1335 crore on 18% growth in total revenue at Rs 8564 crore in Q1 June 2011 over Q1 June 2010. Wipro announced its results on 20 July 2011. Wipro expects 1.98% to 3.97% growth in revenues from the IT services business at $1.436 billion to $1.464 billion in Q2 September 2011 over Q1 June 2011. Wipro's IT services unit added 49 new customers in Q1 June 2011.

India's second largest private sector bank by net profit HDFC Bank fell 1.49% to Rs 501.40. The bank's net profit jumped 33.67% rise in net profit to Rs 1084.98 crore on 31.2% growth in total income to Rs 7098 crore in Q1 June 2011 over Q1 June 2010. The result was announced on 19 July 2011.

Hero Honda Motors (down 0.64%), Cipla (down 0.83%), Maruti Suzuki India (down 1.06%), TCS (down 1.34%), Jaiprakash Associates (down 1.57%) and Reliance Communication (down 2.14%), edged lower from the Sensex pack.

The pick up in the annual monsoon rains has improved crop prospects. Rainfall between July 14 and July 20 was 7% above the long-term average, according to the India Meteorological Department, following two successive weeks of below-average rains that raised concerns about crops. July is the crucial month for sowing rice, sugarcane, pulses and cotton. The seasonal rainfall deficit had widened to 3% below the long-term average last week, but now stands at 1% below normal. So far, 12% of the country has had below-average rainfall, while 88% had normal or excess showers. The June-September monsoon season brings about 70% of India's annual rainfall and is crucial for crops as about 60% of the country's farmland is rain-fed.