Sensex, Nifty scale two-week highs on Greek bailout deal

A pick up in monsoon rains and a second bailout deal for Greece boosted sentiment with the key benchmark indices attaining two-week closing highs. The BSE Sensex jumped 286.11 points or 1.55%, up 188.87 points from the day's low and off 24.76 points from the day's high. The market breadth was strong. Stocks rose across the globe 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.



Index heavyweight Reliance Industries (RIL) gained ahead of its Q1 results due on Monday, 25 July 2011. Cigarette major ITC struck a record high on expectations of good Q1 results. Telecom stocks surged with Bharti Airtel, Idea Cellular hitting 52-week highs. Auto stocks rose on expectations that sales will pick up in the second half of the year. Bank stocks rose after US banking major Morgan Stanley on Thursday, 21 July 2011, posted better-than-expected second quarter results. IT pivotals rose after Microsoft, the word's largest software maker, and Advanced Micro Devices, the second-biggest manufacturer of processors for personal computers, both reported profits that beat Wall Street estimates.

The market pared gains soon after a firm start triggered by a new aid package for Greece. The market surged in morning trade. The market pared gains after hitting a fresh intraday high in afternoon trade. The market hit a fresh intraday high in mid-afternoon trade. The market hit a fresh intraday high in late trade.

The BSE Sensex was up 286.11 points or 1.55% to 18,722.30, its highest closing level since 8 July 2011. The Sensex jumped 310.87 points at the day's high of 18,747.06 in late trade. The index rose 97.24 points at the day's low of 18,533.43 in early trade.

The S&P CNX Nifty was up 92.35 points or 1.67% to 5,633.95, its highest closing level since 8 July 2011. The Nifty hit a high of 5,642.20 in intraday trade.

The market breadth, indicating the overall health of the market, was strong. On BSE, 1,715 shares advanced and 1,250 shares declined. A total of 121 shares remained unchanged.

The BSE Mid-Cap index was up 1.25% and the BSE Small-Cap index rose 0.82%. Both these indices underperformed the Sensex.

The total turnover on BSE amounted to Rs 3187.31 crore, higher than Thursday's turnover of Rs 2718 crore.

The BSE Consumer Durables index was the lone loser among the 13-sectoral indices on BSE. The Bankex (up 2.14%), the BSE TecK (up 2.06%), and the BSE Auto (up 1.76%), outperformed the Sensex. The BSE Consumer Durables (down 0.57%), BSE Realty (up 0.27%) and the BSE FMCG (up 0.67%), underperformed the Sensex.

Among the 30-member Sensex pack, 26 rose while only four of them declined. DLF (down 0.64%), Hindalco (down 0.37%), Jindal Steel and Power (down 0.22%), and Hindustan Unilever (down 0.03%) edged lower from the Sensex pack.

Index heavyweight Reliance Industries (RIL) advanced 1.5% to Rs 873.70 after swinging between Rs 876.40 and Rs 863.15. 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.

In a significant post market development, the Cabinet Committee on Economic Affairs has reportedly approved British Petroleum's (BP) plan to buy a stake in the oil and gas blocks operated by RIL for $7.2 billion.

Telecom stocks were the star performers of the day. India's largest listed cellular services provider Bharti Airtel jumped 4.1% to Rs 411.40 on high volume of 50.71 lakh shares boosted by multiple bulk deals. The stock hit a high of Rs 412.80 in intraday trade, which is a 52-week high for the counter.

India's second largest listed cellular services provider Reliance Communications rose 3.43%. The stock gained on bargain hunting reversing a two-day 4.98% decline. Idea Cellular jumped 6.95% to Rs 85.40 after hitting a 52-week high of Rs 85.75. MTNL rose 1.04%.

India's largest engineering and construction company Larsen & Toubro (L&T) rose 2.01%. L&T Finance Holdings, a unit of L&T, has set a price band of Rs 51-59 a share for its Rs 1245 crore initial public offering (IPO). L&T Finance Holdings' IPO opens for bidding on 27 July 2011. Subscriptions will close on 29 July 2011.

Thermax rose 1.65% after consolidated net profit rose 28.14% to Rs 85.60 crore on 48.56% rise in total income to Rs 1240.40 crore in Q1 June 2011 over Q1 June 2010. The company announced Q1 results during trading hours today, 22 July 2011.

Praj Industries jumped 16.44% after net profit surged 31.95% to Rs 13.67 crore on 75.39% jump in net sales to Rs 164.29 crore in Q1 June 2011 over Q1 June 2010. The company announced the results during trading hours today, 22 July 2011.

Kirloskar Pneumatic Company surged 15.95% after net profit soared 1026.4% to Rs 26.02 crore on 144.58% rise in net sales to Rs 212.01 crore in Q1 June 2011 over Q1 June 2010. The company announced Q1 result during trading hours today, 22 July 2011.

Auto stocks rose on expectations that sales will pick up in the second half of the year. Utility vehicles and tractors major Mahindra & Mahindra (M&M) shot up 3.01% on expectations that good monsoon rains will boost rural demand.

During market hours today, 22 July 2011, Ssangyong Motor Company, the South Korean subsidiary of M&M, reported 43% growth in revenue to KRW 1349.2 billion in the first half of the calendar 2011 over the previous corresponding period. Ssangyong Motor's sales rose 53% to 55,873 vehicles in the first half of the calendar 2011 over in the first half of the calendar 2010. This is the highest level of sales volume achieved by the company in a half year period since 2007.

India's largest truck maker by sales Tata Motors rose 1.97%. India's largest car maker by sales Maruti Suzuki India rose 0.43%.

India's largest bike maker by sales Hero Honda Motors gained 1.63%, extending Thursday's 1.57% gains triggered by stronger-than-expected Q1 results. During market hours on Thursday, 21 July 2011, the company announced that net profit rose 13.46% to Rs 557.89 crore on 32.2% growth total turnover to Rs 5683.33 crore in Q1 June 2011 over Q1 June 2010. The growth in net profit surpassed market expectations even as revenue growth slightly lagged expectations. Hero Honda Motors was seen reporting 10.85% growth in net profit to Rs 545.06 crore on 32.92% growth in operating income to Rs 5711.34 crore in Q1 June 2011 over Q1 June 2010, as per average estimate of 11 brokerages.

Hero Honda's Managing Director and CEO Pawan Munjal said that the immediate focus of the management is to maintain operational excellence in the light of volatile costs of commodities such as steel, aluminium and rubber. Munjal said that Hero Honda will also carry on strengthening its product portfolio through new launches, network expansion and other customer outreach initiatives.

India's second largest motorcycle maker by sales Bajaj Auto advanced 1.87%.

Fag Bearings India jumped 7.9% to Rs 1350.05 after striking a record high of Rs 1409.85 after net profit surged 32.15% to Rs 44.72 crore on 16.45% rise in net sales to Rs 315.79 crore in Q2 June 2011 over Q2 June 2010. The company declared its results during trading hours today, 22 July 2011.

Exide Industries dropped 3.48%, extending Thursday's 8.77% slide triggered by weak Q1 results. Net profit fell 1.29% to Rs 163.20 crore on 8% growth in net sales to Rs 1244 crore in Q1 June 2011 over Q1 June 2010. The decline in Exide's net profit in the first quarter was in contrast with market expectations of a small rise. The 8% revenue growth reported by the firm also fell short of market expectations. The slower growth in automotive vehicle segment and lower demand for inverter batteries is now reflected in the company's financial performance for the quarter under review, the company said.

Exide Industries Managing Director and CEO T V Ramanathan said, "The demand growth that was seen in the country's automotive industry over the last several quarters has not been sustained, resulting in lower demand from original equipment manufacturers. The prevalent power supply situation and pleasant weather conditions in the north Indian markets also resulted in a lower inverter battery sales during the quarter. The demand contraction reduced the company's ability to pass on, in full, the cost of lead which surged 21% on year-on-year basis. These factors dampened sales and profitability".

"However, we feel that these setbacks are short term and our faith and confidence in the vibrancy of the Indian economy is very strong and there is no reason to worry about the longer term growth prospects of the company," Ramanathan added. He said various brand building and related marketing initiatives have been undertaken since June 2011 and the favorable impact of these initiatives will be reflected by Q3 December 2011.

IT pivotals rose after Microsoft, the word's largest software maker, and Advanced Micro Devices, the second-biggest manufacturer of processors for personal computers, both reported profits that beat Wall Street estimates. India's third largest IT exporter by sales Wipro rose 1.2% and India's second largest IT company by sales Infosys advanced 2.01%. India's largest IT company by sales TCS gained 0.83%

3i Infotech fell 1.04% after consolidated net profit declined 27.04% to Rs 46.03 crore on 26.42% fall in net sales to Rs 479.39 crore in Q1 June 2011 over Q4 March 2011. The company announced Q1 results after market hours on Thursday, 21 July 2011.

India's largest cigarette maker by sales ITC rose 0.15% to Rs 206.80 after striking a record high of Rs 209. The stock extended three-day 2.60% gain on expectations of good Q1 results.

Bank stocks rose after US banking major Morgan Stanley on Thursday, 21 July 2011, posted better-than-expected second quarter results. India's second largest private sector bank by net profit HDFC Bank advanced 1.09% to Rs 501.70. The stock had hit a record high of Rs 519.50 on 19 July 2011. 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.

India's largest private sector bank by net profit ICICI Bank gained 2.78%. ICICI Bank raised its base rate by 25 basis points to 9.5% per annum with effect from 4 July 2011. The private sector bank also raised its benchmark prime lending rate (BPLR) and its floating reference rate (FRR) for consumer loans, including home loans. BPLR and FRR are used for determining interest rates on loans and advances sanctioned up to 30 June 2010.

India's largest commercial bank by branch network State Bank of India (SBI) rose 1.58%. Reportedly the government on Thursday approved acquisition of State Bank of India Commercial and International Bank (SBICI) by its parent SBI to eliminate costs in operating the former as a separate entity. SBICI is a wholly-owned subsidiary of SBI and has two branches in Mumbai.

State Bank of Mysore fell 1.06% after net profit declined 42.3% to Rs 64.28 crore on 21% rise in operating income to Rs 1291.81 crore in Q1 June 2011 over Q1 June 2010. The bank announced Q1 results after market hours on Thursday, 21 July 2011.

Allahabad Bank gained 4.64% after net profit rose 20.45% to Rs 418.13 crore on 41.98% surge in total income to Rs 3835.77 crore in Q1 June 2011 over Q1 June 2010. The bank declared its results during trading hours today, 22 July 2011.

Axis Bank surged 4.41% after net profit rose 27.02% to Rs 942.35 crore on 16.69% growth in total income to Rs 1167.87 crore in Q1 June 2011 over Q1 June 2010. The bank announced Q1 result during trading hours today, 22 July 2011. The bank said that pursuant to the approval by the board of directors in November 2010, the bank is in process of obtaining requisite approvals for the acquisition of certain businesses of Enam securities. Since there are pending approvals from various regulatory authorities, no effect of acquisition is given in Q1 June 2011 results.

Metal stocks rose after Hindustan Zinc on Thursday reported strong Q1 results. JSW Steel (up 1.5%), Sail (up 1.7%), Sterlite Industries (up 1.5%), National Aluminium Company (up 0.31%), and Tata Steel (up 2.08%), gained.

Hindustan Zinc surged 3.11%, extending Thursday's gains triggered by strong Q1 results. Net profit rose 67.8% to Rs 1494.91 crore on 44.6% rise in net sales to Rs 2821.35 crore in Q1 June 2011 over Q1 June 2010. The result was announced during market hours on Thursday, 21 July 2011.

Sesa Goa rose 2.7% to Rs 285.55. The stock hit day's low of Rs 265.80 after consolidated net profit slumped 35.4% to Rs 840.59 crore on 12.5% fall in net sales to Rs 2094.74 crore in Q1 June 2011 over Q1 June 2010. The company announced the results after market hours on Thursday, 21 July 2011.

India's largest power generation firm by capacity, state-run NTPC, rose 0.25%. The company today said that the Ministry of Coal, Government of India, through letter dated 14 June 2011 has conveyed the decision of Government to de-allocate Kerandari, Chatti Bariatu and Chatti Bariatu (South) coal blocks allocated to NTPC due to delay in the development of coal blocks. Further, Ministry of Coal has also decided to de-allocate Brahmini and Chichro Patsimal coal block allocated to a JV company formed between Coal India (CIL) and NTPC due to delay in development of coal block.

However, NTPC has represented to the Ministry of Coal, Government of India to review the decision of de-allocation of coal blocks. NTPC, through letter dated 28 June 2011, has informed Ministry of Coal that NTPC is going ahead with all the project activities of these coal blocks. Secretary (Ministry of Power) has also requested Secretary (Coal) to review the Government's decision of de-allocation of coal and restore it to NTPC.

Varun Industries jumped 4.03% after the company said Varun Energy Corporation, Madagascar, a group company, has signed a pact with a public sector unit to sell entire heavy mineral concentrate. The company made the announcement during trading hours today, 22 July 2011.

Rallis India surged 9.68% after consolidated net profit rose 58.9% to Rs 23.12 crore on 48.7% growth net sales to Rs 291.59 crore in Q1 June 2011 over Q1 June 2010. The company announced Q1 results after market hours on Thursday, 21 July 2011.

Akzo Nobel India advanced 5.08% after net profit surged 54.71% to Rs 67.98 crore on 19.78% rise in net sales to Rs 338.56 crore in Q1 June 2011 over Q1 June 2010. The company announced the results during trading hours today, 22 July 2011.

Jet Airways (India) rose 1.75%. During trading hours today, 22 July 2011, the company reported a net loss of Rs 123.16 crore in Q1 June 2011 compared with net profit of Rs 3.52 crore in Q1 June 2010. Total income rose 18.49% to Rs 3582.39 crore in Q1 June 2011 over Q1 June 2010.

Bharti Airtel clocked the highest turnover of Rs 203.83 crore on BSE. Rushil Decor (Rs 150.20 crore), Varun Industries (Rs 104.45 crore), Amrutanjan Healthcare (Rs 88.04 crore) and Axis Bank (Rs 84.84 crore), were the other turnover toppers on BSE in that order.

Cals Refineries reported a highest volume of 3.78 crore shares on BSE. Sanra Software (1.46 crore), Praj Industries (86.28 lakh shares), Rushil Decor (83.54 lakh shares) and Resurgere Mines (52.17 lakh shares), were the other volume toppers on BSE in that order.

As the crucial corporate earnings season gathers steam, investors will closely watch the post-Q1 June 2011 result management commentary to gauge the future earnings outlook at a time when Indian firms are witnessing cost pressures amid rising interest rates and staff costs. A hike in transportation costs will add to cost pressure of India Inc. As per reports, freight rates have gone up by 8% to 9% on all routes across India following the recent hike in diesel prices.

Godrej Consumer Products reports Q1 earnings tomorrow, 23 July 2011. Reliance Industries and Sterlite Industries will announce Q1 results on 25 July 2011. Car major Maruti Suzuki, steel major JSW Steel, power equipment major Bhel, decorative paints major Asian Paints and Shriram Transport Finance Company are set to unveil Q1 results on 26 July 2011. UltraTech Cement, HCL Technologies, GAIL (India), Bank of Baroda, Infrastructure Development Finance Company (IDFC), Oil India and Lupin unveil results on 27 July 2011.

State-run oil exploration giant ONGC, FMCG giant Hindustan Unilever, Cigarette major ITC, Sun Pharma, cement majors--ACC and Ambuja Cements, Jindal Steel & Power, state-run Punjab National Bank, and GSFC unveil results on 28 July 2011. ICICI Bank, Power Finance Corporation, Bhushan Steel, Idea Cellular and TVS Motor unveil Q1 results on 29 July 2011. Sun TV announces Q1 results on 1 August 2011. Power Grid Corporation unveils Q1 results on 2 August 2011.

Bharti Airtel unveils Q1 results on 3 August 2011. Adani Power and Mundra Port And Special Economic Zone announce Q1 results on 4 August 2011. IL&FS Transportation Networks announces Q1 results on 5 August 2011. M&M announces Q1 results on 8 August 2011. ABB and GMR Infrastructure announce quarterly results on 9 August 2011. Tata Power unveils Q1 results on 10 August 2011. Hindalco and Coal India unveil Q1 results on 12 August 2011.

The Reserve Bank of India on Thursday, 21 July 2011, said overseas companies with Indian rupee exposure as a result of trade with the South Asian economy can now hedge their currency risk. The move is in line with the central bank's aim of encouraging the use of the rupee in international trade, the Reserve Bank of India said. Firms with proof of an underlying trade deal denominated in rupees can now use either rupee forwards or options contracts to hedge their deals, it said.

The Reserve Bank of India (RBI) is seen raising its key lending rate by 25 basis points at its first quarter review of the monetary policy 2011-12 on Tuesday, 26 July 2011, to tame inflation, which remains much above the central bank's perceived comfort level of 5% to 6%.

Meanwhile, 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.

Gujarat, the country's largest producer of groundnut and cotton, had 80% below-average rains until the end of June, but now the gap has narrowed to 34%. However, poor rains in Andhra Pradesh are causing worries for rice plantings. As per reports, just about 9% of the state's rice area has been sown so far.

European stock markets rose on Friday, 22 July 2011, with banking stocks benefiting as investors viewed positively a plan by European Union officials to ease Greece's debt burden and prevent further regional contagion. The key benchmark indices in UK, France and Germany were up by 0.61% to 0.95%.

European Union officials on Thursday agreed to overhaul their financial rescue fund in order to ease pressure on Greece and other troubled European countries affected by the sovereign-debt crisis that has been sporadically wreaking havoc on the market for months. Greece will get a new aid package worth 109 billion euros ($157 billion) and that European Union leaders will amplify the role of the European Financial Stability Facility to allow it to lend to governments, which can then recapitalize banks, and to intervene in the secondary market to avoid contagion.

Asian shares surged on Friday, 22 July 2011, to join a global rally triggered by news of a second bailout for Greece and plans to prevent sovereign-debt contagion from spreading to other European countries. The key benchmark indices in China, Hong Kong, Japan, Indonesia, Singapore, South Korea and Taiwan rose by between 0.18% to 2.08%. Technology stocks rose after Advanced Micro Devices Inc posted strong earnings on Thursday.

Trading in US index futures indicated that the Dow could rise 48 points at the opening bell on Friday, 22 July 2011. US stocks climbed on Thursday as signs of progress on the US debt talks and concrete action from Europe on its own debt crisis heartened investors. Efforts to craft a broad $3 trillion deficit-reduction deal gained traction on Thursday as the White House and top lawmakers scrambled to sort through competing options and stave off a devastating US default.

Standard & Poor's reiterated on Thursday it sees a real risk that future US government deficits may meaningfully miss discussed targets and that there is a 50-50 chance the US AAA credit rating could be cut within three months, perhaps as soon as August. If an agreement is reached to raise the debt ceiling but nothing meaningful is done in terms of deficit reduction, the US would likely have its rating cut to the AA category, S&P said. The deficit reduction debate is coming up against an Aug. 2 deadline when the $14.3 trillion limit on America's borrowing capacity is exhausted.

The number of Americans filing new claims for unemployment benefits rose more than expected last week, pointing to a labour market that is struggling to regain momentum. Initial claims for state unemployment benefits increased 10,000 to a seasonally adjusted 418,000, the Labor Department said on Thursday.

US banking major Morgan Stanley on Thursday posted a second-quarter loss of $558 million, or 38 cents a share, but that was much better than the 61-cent-a-share loss the market had been expecting, with the bank's revenue also jumping.