Sensex, Nifty near 2-week highs

Key benchmark indices reached their highest closing level in nearly two weeks as strong economic data in the US boosted sentiment. US is the world's biggest economy. The barometer index, BSE Sensex, came within striking distance of the psychological 16,000 level in late trade. The Sensex provisionally jumped 232.05 points or 1.47%, up about 210 points from the day's low and off close to 30 points from the day's high. Volumes were thin as major Asian markets viz. Hong Kong and Singapore, and European markets were closed for holidays. Except BSE Healthcare index, all the other 12 sectoral indices on BSE were in the green. The market breadth was strong.



The Sensex has fallen 152.71 points or 0.94% so far this month. The Sensex has slumped 4,538.34 points or 22.12% in calendar 2011. From a 52-week high of 20,664.80 on 3 January 2011, the Sensex has lost 4,694.05 points or 22.71%. From a 52-week low of 15,135.86 on 20 December 2011, the Sensex has risen 834.89 points or 5.51%..

Coming back to today's trade, IT shares rose after strong economic data in the US, the biggest outsourcing market for Indian IT services exporters. Index heavyweight Reliance Industries edged higher. FMCG giant Hindustan Unilever hit a record high. Interest rate sensitive realty stocks extended recent gains after data released last week showed food inflation eased to four-year low, cementing expectations of a steady easing in overall price pressures.

Capital goods stocks gained on bargain hunting after recent steep losses. Telecom stocks rose after Telecom Disputes Settlement and Appellate Tribunal (TDSAT) on Saturday, 24 December 2011, asked the government not to take any "coercive" action over an order to ban 3G roaming pacts among firms until the next hearing of the case following an appeal filed by telecom firm with the telecom tribunal.

The market edged higher in early trade on strong US economic data. The market extended initial gains to hit its highest level in nearly 1-1/2 week in morning trade. The market moved in a narrow range in mid-morning trade. The market continued to move in a tight range in early afternoon trade. Key benchmark indices hit fresh intraday highs in afternoon trade. Key benchmark indices regained strength soon after trimming intraday gains in early afternoon trade. The market trimmed gains after hitting a fresh intraday high in late trade.

High volatility is expected on the bourses this week as traders roll over positions in futures & options (F&O) segment from the near-month December 2011 series to January 2012 series. The near-month December 2011 F&O contracts expire on Thursday, 29 December 2011.

The BSE Sensex jumped 232.05 points or 1.47% to settle at 15,970.75, its highest closing level since 13 December 2011. The index rose 259.74 points at the day's high of 15,998.44 in late trade. The index rose 22.48 points at the day's low of 15,761.18 in early trade.

The S&P CNX Nifty jumped 65 points or 1.38% to settle at 4,779, its highest closing level since 13 December 2011. The Nifty hit a high of 4,787.25 and a low of 4,718.15 in intraday trade.

The BSE Mid-Cap index rose 0.83% and the BSE Small-Cap index gained 0.98%. Both these indices underperformed the Sensex.

BSE clocked turnover of Rs 1282 crore, lower than Rs 1798.79 crore on Friday, 23 December 2011.

The market breadth, indicating the overall health of the market, was strong. On BSE, 1,736 shares advanced and 986 shares declined. A total of 140 shares were unchanged.

Among the 30-member Sensex pack, 27 gained while only three of them declined. Cipla fell 0.64% and was the top loser from the Sensex pack.

Index heavyweight Reliance Industries (RIL) rose 1.94% to Rs 760.95. The director general of hydrocarbons S.K. Srivastava last week 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.

India's largest FMCG company by sales Hindustan Unilever rose 1.87% to Rs 419.30. The stock hit a record high of Rs 420 in intraday trade today, 26 December 2011. The stock has been on the rise on expectations of higher rural sales following good rains this year. Cigarette maker ITC rose 0.42%.

Metal stocks rose as LMEX, a gauge of six metals traded on the London Metal Exchange, gained 0.71% on Friday, 23 December 2011. Sterlite Industries (India), Nalco, Hindustan Zinc, Jindal Steel & Power, Jindal Saw, Tata Steel, Sail and JSW Steel gained by between 0.56% to 3.01%. But, Hindalco Industries fell 0.53%.

Interest rate sensitive realty stocks extended recent gains after data released last week 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. Lower interest rates may revive property demand. Purchases of both residential and commercial property are largely driven by finance. DLF, HDIL, Orbit Corporation, and Unitech rose by between 1.34% to 6.3%.

Capital goods stocks gained on bargain hunting after recent steep losses. India's largest power equipment maker by sales Bhel rose 0.68% to Rs 243.60. The stock had hit a 52-week low of Rs 225 on 20 December 2011.

Engineering and construction major L&T gained 1.69% to Rs 1025.75. The stock had slipped to a 52-week low of Rs 971 on 21 December 2011. L&T early last week said it bagged new orders valued at Rs 1000 crore across various business segments in Q3 December 2011.

Telecom stocks rose after Telecom Disputes Settlement and Appellate Tribunal (TDSAT) on Saturday, 24 December 2011, asked the government not to take any "coercive" action over an order to ban 3G roaming pacts among firms until the next hearing of the case following an appeal filed by telecom firm with the telecom tribunal. Bharti Airtel, Idea Cellular, MTNL, and Tata Teleservices (Maharashtra) rose by between 1.37% to 4.44%.

TDSAT has set 3 January 2012 as the next date for hearing the case. The telecom ministry had told telecom carriers on Friday, 23 December 2011, that they are not allowed to offer 3G services beyond the zones where they have their own radio airwaves, such as via roaming pacts with one another, asking them to comply with the order within 24 hours. The ministry's decision came as a blow to Bharti Airtel, Vodafone's India unit and Idea Cellular -- three of the country's top four carriers -- which currently provide 3G services beyond their licensed zones through roaming pacts. The three firms along with Tata Teleservices and Aircel challenged the order, saying the 3G roaming agreements were compliant with telecom licensing rules and the telecoms ministry's clarifications to firms before the 3G airwaves auction last year.

Reliance Communications rose 3.5% on reports the company is in the final stages of talks with private equity firms Carlyle and Blackstone to sell its tower unit.

IT stocks rose on strong economic data in the US, the biggest outsourcing market for IT services exporters. India's largest software services exporter by revenues Tata Consultancy Services (TCS) rose 2.73%. TCS early last 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 rose 2.91%. The company said last week 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.

India's third largest software services exporter by revenues Wipro gained 0.3%.

Interest rate sensitive auto stocks extended recent gains after data released last week 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. Lower interest rates may help revive demand for vehicles. Purchases of automobiles, including that of cars, utility vehicles and commercial vehicles are substantially driven by financing.

India's largest passenger vehicle maker by sales Tata Motors rose 0.89%, with the stock gaining for the fourth straight day. The company is upgrading the starter motor of all old Nano models to the one installed in its new 2012 edition, launched in November 2011, a news agency quoted an unnamed Tata Motors spokesman as saying on Monday, 26 December 2011. The replacement being offered to all customers, free of cost, is not due to any safety concerns, he said.

India's largest bike maker by sales Hero MotoCorp jumped 4.75%. India's second largest motorcycle maker by sales Bajaj Auto gained 0.66%.

India's biggest sport utility vehicle maker by sales Mahindra & Mahindra (M&M) rose 0.82%. 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 fell 0.57%. Maruti plans to launch a new multi-utility vehicle Ertiga at the New Delhi Auto Expo 2012 next month. It will also display two small cars based on the K-car platform that are sold in Japan.

Sugar stocks fell on reports that the announcement of poll schedule in Uttar Pradesh and four other states may delay government's approval for further sugar exports. Bajaj Hindusthan, Balrampur Chini Mills and Shree Renuka Sugars shed by between 0.96% to 5.48%.

Interest rate sensitive banking stocks rose after data released last week 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. India's largest private sector bank by branch network ICICI Bank rose 0.86%.

India's second largest private sector bank by branch network HDFC Bank gained 1.34%. The bank raised 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 commercial bank by net profit and branch network State bank of India (SBI) rose 0.99%.

Shares of tea companies gained on reports tea prices in India rose more than 2% at the auction held during 20-22 December 2011, as the leaf offered was good quality, which helped demand. Asian Tea & Exports, Assam Company and Warren Tea rose by between 2.97% to 6.94%. According to reports, price of CTC (crush-tear-curl) tea stood at Rs 122.87 per kilogram (kg), up 2.19% from Rs 120.23 at the previous weekly auction. Dust tea price gained 2.97% to Rs 118.26 per kg.

Oil exploration stocks rose as crude oil prices surged. Cairn India, and ONGC rose by between 0.27% to 2.25%. But, Oil India fell 0.26%. Higher crude oil prices will result in higher realizations from crude sales for oil exploration firms.

US crude oil futures for February 2012 delivery jumped 6.6% last week to settle at $99.68 a barrel on Friday 23 December 2011 on the New York Mercantile Exchange, the highest settlement since 13 December 2011, as US economic reports signaled that growth in the world's biggest crude-consuming country will accelerate.

PSU OMCs fell as crude oil prices surged. BPCL, HPCL and Indian Oil Corporation (IOCL) fell by between 0.88% to 1.34%. Higher crude oil prices will increase under-recoveries of state-run oil marketing companies (PSU OMCs) on domestic sale of diesel, LPG and kerosene at controlled prices.

PSU OMCs may reportedly raise petrol prices by around Rs 1 per litre from next month as the rupee's depreciation has pushed up refining costs. Last month, the PSU oil firms had cut in the petrol prices twice. But its prices have been hiked four times this year. Oil firms are also losing money on the sale of diesel, kerosene and LPG at the subsidized rates. Petrol prices are already deregulated by the government.

NTPC rose 1.32% after the company said during market hours today that the unit 2 of 660 megawatts (MW) of Sipat Super Thermal Power Project has been commissioned on 24 December 2011. With this, the total capacity of NTPC group has become 36,014 MW. With the commissioning of this unit, the total installed capacity of Sipat Super Thermal Power Project has become 2,320 MW.

Cals Refineries clocked highest volume of 1.44 crore shares on BSE. GVK Power & Infrastructure (79.84 lakh shares), Mahan Industries (48.89 lakh shares), IFCI (35.51 lakh shares) and Suzlon Energy (28.38 lakh shares) were the other volume toppers in that order.

SBI clocked highest turnover of Rs 80.25 crore on BSE. RIL (Rs 47.36 crore), Tata Steel (Rs 44.17 crore), Tata Motors (Rs 30.90 crore) and Infosys (Rs 30.36 crore) were the other turnover toppers in that order.

Foreign funds bought equity shares worth Rs 84.27 crore on Friday, 23 December 2011, as per provisional data from the stock exchanges. Before Friday's (23 December 2011), FIIs were net sellers for ten days in a row from 9 to 22 December 2011. FIIs have sold shares worth a net Rs 1602.35 crore so far this month (till 22 December 2011), as per provisional data from the stock exchanges.

Advance tax collection from the country's top 100 companies, as per the final numbers, declined by 1.4% to Rs 30763 crore in the third quarter of 2011-12, indicating sluggishness in economy. Advance taxes are collected in four installments -- 15% by 15 June; 40% by 15 September; 75% by 15 December and 100% by 15 March.

A government statement in parliament last month dashed hopes of a relief in securities transaction tax (STT). Junior finance minister S.S. Palanimanickam has said that the government has no proposal to lower the securities transaction tax (STT). There has been a speculation that the government will reduce STT in Union Budget 2012-2013 in a bid to revive sagging volumes on the bourses. Palanimanickam said in a written reply to Rajya Sabha that the securities transaction tax receipts had declined by around 18% to Rs 2960 crore during the first six months in the current fiscal year from a year ago period.

Prime Minister Manmohan Singh said on Thursday, 22 December 2011 he was disappointed to hear negative comments from industry leaders that the government's policies were leading to a slowdown. Singh, who met members of his Trade and Industry Council, said such comments strengthened negative forces who had no stake in the country's development. The UPA government has been battling criticism over its handling of the economy and the perception of policy paralysis in the aftermath of a string of scandals which hit the headlines since last year. Several top industrialists had written to the government expressing frustration at the slow pace of reforms and the gloomy atmosphere.

Credit rating agency Moody's Investors Service on 14 December 2011 said that the recent sharp decline in the value of the Indian rupee against the dollar is generally exerting only a moderate impact on rated Indian companies. Risks for companies holding large amounts of dollar denominated debt are also manageable in the near term, given that debt maturities are limited for this time frame, Moody's said in a new report. This means Indian companies rated by Moody's do not have a significant dollar outflow at a time when the Indian rupee is losing ground.

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.

At its mid-quarterly monetary policy review meet on Friday, 16 December 2011, the Reserve Bank of India (RBI) left its main lending rate unchanged in order to support faltering economic growth as inflation shows signs of cooling. While inflation remains on its projected trajectory, downside risks to growth have clearly increased, RBI said in a statement. From this point on, monetary policy actions are likely to reverse the cycle, responding to the risks to growth, RBI said.

RBI said inflation risks remain high and inflation could quickly recur as a result of both supply and demand forces. RBI also said that the rupee remains under stress. The timing and magnitude of further actions will depend on a continuing assessment of how these factors shape up in the months ahead, RBI said. The RBI has raised rates 13 times since March 2010.

India may face the risk of stagflation if the government doesn't take urgent steps to tame inflation and stimulate growth, a parliamentary panel on finance warned on Thursday, 22 December 2011. The Standing Committee on Finance blamed the Reserve Bank of India's 13 interest-rate increases over the past 21 months for stalling economic growth. "Measures taken by the government and the RBI so far have squarely failed to rescue the economy from unabated inflation. Instead, monetary measures initiated for this purpose have only resulted in worsening the condition of the economy further," the report said.

Finance minister Pranab Mukherjee on Sunday, 25 December 2011, said he did not think there was any problem in presenting the Budget for 2012-13 on schedule in the wake of the announcement of assembly elections in five states. Mukherjee, however, said the date for the presentation of the budget will be fixed after discussions at various levels. The Union Budget is presented on the last date of February every year.

The Election Commission on Saturday, 24 December 2011, announced the dates for the assembly polls in Uttar Pradesh, Punjab, Uttarakhand, Manipur and Goa. Uttar Pradesh will have polling on February 4, 8, 11, 15, 19, 23 and 28, while Uttarakhand and Punjab will go to polls on January 30. Manipur will have polls on January 28 and Goa on March 3.

Japanese stocks jumped on Monday, 26 December 2011, to catch up with broad gains in global equity markets after Friday's (23 December 2011) holiday. The Nikkei 225 average ended 1% higher, aided by Friday's strong finish on Wall Street and upbeat US economic data.

Other Asian markets were in red. Key benchmark indices in China, South Korea and Taiwan fell by between 0.26% to 0.67%. Stock markets in Hong Kong, Singapore, Indonesia and Malaysia were closed for holidays.

European stock markets were closed for holidays today, 26 December 2011. US market also remains closed today, 26 December 2011, for holiday.

US stocks headed into Christmas with their fourth straight gain on Friday, 23 December 2011, pushing the Dow Jones Industrial Average to a five-month high as investors cheered the accelerating US economy and a break in the latest congressional deadlock. Investors were encouraged by a break in the latest congressional deadlock, after lawmakers in the House of Representatives and the Senate voted to temporarily extend a payroll tax cut by two months and agreed to begin negotiations on a yearlong extension.

Investors also welcomed economic news confirming the belief that the US recovery is on track. The latest data showed an increase in US November durable-goods orders.