BSE Small-Cap, Mid-Cap indices slide over 1% each

Key benchmark indices managed gains as investors resorted to bargain hunting after recent steep slide in share prices. The latest data showing food inflation easing sharply to a near four-year low also aided sentiment. Easing of inflation may prompt the central bank to cut interest rates to revive sagging economic growth. The market fell in three out of five trading sessions in the week gone by.

The food inflation eased sharply to 1.81% in the year to 10 December 2011, from an annual 4.35% rise in the previous week, government data showed on Thursday, 22 December 2011. The fuel inflation remained unchanged at 15.24% in the latest week compared with the prior week, data showed, while the primary articles price index rose 3.78%, compared with an annual rise of 5.48% in the previous week.



A news agency on Wednesday, 21 December 2011, quoted an unnamed senior finance ministry official as saying that the government is looking at all options to attract foreign capital inflows. The finance ministry official said India can expect robust inflows of funds from foreign institutional investors in the long term and that current foreign fund outflows from India are temporary.

The BSE Sensex jumped 247.35 points or 1.6% to 15,738.70 in the week ended Friday, 23 December 2011. The S&P CNX Nifty gained 62.40 points or 1.34% to 4714.

The BSE Mid-Cap index fell 1.74% and BSE Small-Cap index dropped 1.29%. Both these indices underperformed the Sensex.

Key benchmark indices edged lower for the fourth day in a row on Monday, 19 December 2011, as data showing sustained selling by foreign funds over the past few days, ongoing worries about euro-zone sovereign debt crisis and geopolitical worries arising from death of North Korean leader Kim Jong-il hurt sentiment adversely. The BSE Sensex lost 112.01 points or 0.72% to settle at 15,379.34, its lowest closing level since 21 August 2009.

A late sell-off pushed the key benchmark indices to their lowest level in 28 months on Tuesday, 20 December 2011. The market fell for the fifth straight trading session. The BSE Sensex lost 204.26 points or 1.33% to settle at 15,175.08, its lowest closing level since 20 August 2009.

Key benchmark indices surged to attain their highest closing level in nearly one week on Wednesday, 21 December 2011, after Moody's Investors Service raised India's local-currency debt rating by one level to investment grade from the highest junk grade. Higher global stocks also aided rally in battered Indian shares. The BSE Sensex jumped 510.13 points or 3.36% to settle at 15,685.21, its highest closing level since 15 December 2011.

Key benchmark indices erased initial losses and settled higher for the second straight day to attain their highest closing level in one week on Thursday, 22 December 2011, helped by firm European stocks and easing domestic food inflation. The BSE Sensex surged 128.15 points or 0.82% to settle at 15,813.36, its highest closing level since 15 December 2011.

Key benchmark indices reversed direction after hitting one-week highs on Friday, 23 December 2011, as data showing selling by foreign funds continuously over the past few days hurt sentiment adversely. The BSE Sensex declined 74.66 points or 0.47% to 15,738.70.

From the 30-share Sensex pack, 16 stocks fell and 14 of them rose.

Index heavyweight Reliance Industries (RIL) rose 3.24%. The director general of hydrocarbons S.K. Srivastava on Wednesday, 21 December 2011, said that RIL is planning workover operations to revive sick wells at its D6 block in the Krishna-Godavari basin, off India's east coast. Srivastava said production at the KG-D6 block may increase post the workover program. Oil secretary G. C. Chaturvedi on Wednesday, 21 December 2011, said RIL is currently producing 38-39 million metric standard cubic meters per day of gas at KG-D6.

RIL late last month said that it has initiated arbitration proceedings against the government to seek an independent view of a tribunal on the issue of the company's entitlement of recovery of entire costs on KG-D6 gas blocks from the revenue generated from the blocks. RIL said it has initiated arbitration proceedings against the Government of India (GoI) in a bid to finally resolve the cost recovery issue so as not to hinder future investments in this block.

RIL said its investment in KG-D6 production facilities has been only partly recovered and the return on the investment so far is less than the cost of the capital. The production sharing contract (PSC) with the Government of India (GoI) contains no provision which entitles the GoI to restrict the costs recovered by the company by reference to factors such as the level of production or the extent to which field facilities are utilised, RIL said.

Meanwhile, RIL has reportedly acquired a minority stake in US-based nuclear design and engineering company Terra Power LLC for an undisclosed sum. Washington-based Terra Power is founded by former Microsoft executive Nathan Myhrvold's high-profile invention and patenting firm Intellectual Ventures.

Metal stocks declined on worries global economic slowdown could crimp demand. Jindal Steel & Power (down 5.87%), Tata Steel (down 4.85%), Hindalco Industries (down 3.07%), edged lower.

But, Sterlite Industries gained 2.4% on bargain hunting after a recent sharp slide. The stock has slumped 50% so far this year.

India's largest oil & gas exploration firm by sales ONGC jumped 4.58%.

Interest rate sensitive auto stocks rose after data released on Thursday showed food inflation eased to four-year low, cementing expectations of a steady easing in overall price pressures. Easing of inflation pressure may prompt the central bank to cut interest rates to revive sagging economic growth. Purchases of automobiles, including that of cars, utility vehicles and commercial vehicles are substantially driven by financing.

India's biggest sport utility vehicle maker by sales Mahindra & Mahindra (M&M) surged 5.28%. The company plans to raise prices of its vehicles by up to 3% in January 2012 to offset the effects of rising raw-material costs. The company's total auto sales jumped 52.7% to 40,722 units in November 2011 over November 2010. The company plans to unveil new models from its recently acquired South Korean unit Ssangyong Motor Co at the New Delhi Auto Expo 2012 next month.

India's largest small car maker by sales Maruti Suzuki India advanced 4.8%. Maruti plans to launch a new multi-utility vehicle Ertiga at the auto expo. It will also display two small cars based on the K-car platform that are sold in Japan.

India's largest passenger vehicle maker by sales Tata Motors surged 7.2% and was the top gainer from the Sensex pack.

But, two wheeler makers declined. India's largest bike maker by sales Hero MotoCorp fell 3.71%. India's second largest motorcycle maker by sales Bajaj Auto shed 3.24%.

Banking stocks edged higher after data released on Thursday showed food inflation eased to four-year low, cementing expectations of a steady easing in overall price pressures. India's largest private sector bank by branch network ICICI Bank rose 6.79%.

India's second largest private sector bank by branch network HDFC Bank gained 5.2%. The bank will raise interest rates on non-resident savings deposits to 9% from 3.82% from Friday, 23 December 2011, taking advantage of recent deregulation to attract dollars.

India's largest bank by net profit and branch network State bank of India (SBI) fell 1.91%.

The central bank on Wednesday, 21 December 2011, relaxed some restrictions on borrowing by banks from it, in another move aimed at easing the cash crunch in the banking system. The Reserve Bank of India (RBI) has allowed banks to avail themselves of funds from RBI on overnight basis, under Marginal Standing Facility (MSF), against their excess SLR holdings. Additionally, banks can also avail themselves of funds, on overnight basis below the stipulated SLR, up to one per cent of their respective Net Demand and Time Liabilities outstanding at the end of second preceding fortnight. In the event the banks' SLR holdings fall below the statutory requirement, banks will not have the obligation to seek a specific waiver for default in SLR compliance arising out of use of this facility in terms of notification issued under sub section (2A) of Section 24 of the Banking Regulation Act, 1949, RBI said in a circular.

India's biggest dedicated housing finance firm by operating income HDFC gained 5.75%.

IT stocks rose on strong economic data in the US, the biggest outsourcing market for IT services exporters. India's third largest software services exporter by revenues Wipro advanced 0.61%.

India's largest software services exporter by revenues Tata Consultancy Services (TCS) gained 1.12%. TCS early this week announced that it will expand its operations in the state of Maharashtra by building a new software development campus in Nagpur with an investment of Rs 600 crore in the first phase.

India's second largest software services exporter by revenues Infosys fell 0.82%. During market hours on Tuesday, 20 December 2011, the company said its business process outsourcing subsidiary -- Infosys BPO has signed a definitive agreement to acquire all of the outstanding share capital in Australia-based Portland Group Pty, a leading provider of strategic sourcing and category management services. The purchase consideration for the deal is Australian dollar (AUD) 37 million. Portland Group reported revenue of about AUD 31.3 million for the year ended 30 June 2011.

Capital goods pivotals were mixed. Engineering and construction major L&T shed 6.24% to Rs 1008.70. The stock slipped to a 52-week low of Rs 971 on Wednesday, 21 December 2011. L&T early this week said it bagged new orders valued at Rs 1000 crore across various business segments in Q3 December 2011.

India's largest dam builder by sales Jaiprakash Associates shed 9.14% to Rs 53.65 and was the top loser from the Sensex pack. The stock hit a 52-week low of Rs 51.25 on Wednesday, 21 December 2011.

India's largest power equipment maker by sales Bhel gained 0.62% to Rs 241.95. The stock hit a 52-week low of Rs 225 on Tuesday, 20 December 2011.

India's largest FMCG company by sales Hindustan Unilever rose 4.99% to Rs 411.60. The stock hit a record high of Rs 414.40 on Friday, 23 December 2011. Cigarette maker, ITC jumped 4.3%.

Sun Pharmaceutical Industries (down 2.9%), Bharti Airtel (down 1.74%), NTPC (down 1.58%) and DLF (down 0.49%) edged lower.