Market gallops on bargain hunting

The market rose on bargain hunting last week after declining in past three consecutive weeks. Data showing resumption of buying of Indian stocks by foreign funds underpinned sentiment. Key benchmark indices rose in three out of five trading sessions. The BSE Sensex rose 358.74 points or 2.13% to 17,197.93. The 50-unit S&P CNX Nifty rose 115.85 points or 2.27% to settle at 5,215.70. The BSE Mid-Cap index rose 3.14% and the BSE Small Cap index rose 2.96%. Both these indices outperformed the Sensex. The Sensex has jumped 1743.01 points or 11.27% in calendar 2012 so far (till 3 August 2012). From a 52-week low of 15,135.86 on 20 December 2011, the Sensex has risen 2,062.07 points or 13.62%. From a 52-week high of 18,523.78 on 22 February 2012, the Sensex has lost 1,325.85 points or 7.15%. Foreign institutional investors (FIIs) bought shares worth Rs 140.13 crore on 2 August 2012, as per provisional figures on the stock exchanges. FIIs bought shares worth Rs 438.50 crore from the secondary equity markets on 1 August 2012, as per data from Securities & Exchange Board of India. FIIs made substantial purchases of Indian stocks last month. FIIs bought shares worth net Rs 9691 crore from the secondary equity markets in July 2012. The India Meteorological Department (IMD) on Thursday, 2 August 2012, said the El Nino weather pattern is likely to reduce rains again in the second half of the June to September monsoon season. The IMD said rains over the entire June to September season are now expected to be less than 90% of long-term average. This is lower than IMD's previous forecast of 96%. Monsoon rains are considered deficient -- a drought in layman's terms -- if they fall below 90% of a 50-year average. Between June 1 and August 1, rainfall was about 19% below normal. The IMD expects normal rains in August -- a critical month for summer crops. It expects rainfall to be 5-6% below average in September due to the possibility of El Nino. The weather office said rainfall during August-September is expected to be 91% of the long-term average. India's services output growth held steady in July, helped by resilient demand, although a weak global economy and moderate growth in local industry could constrain expansion in the coming months, a survey showed on Friday, 3 August 2012. The seasonally adjusted HSBC Service Sector Business Activity Index, released by Markit, was 54.2 in July, little changed from June's 54.3. A figure below 50 indicates contraction. New orders at private sector companies rose steeply in July with services firms signaling a faster increase than those engaged in manufacturing. The HSBC India Composite Output Index fell to 54.4 in July from 55.7 in June. July's expansion is the slowest in three months, HSBC said. Trading for the week started on a positive note. Key benchmark indices edged higher on Monday, 30 July 2012, with firm global stocks and data showing resumption of buying of Indian stocks by foreign institutional investors (FIIs) boosting sentiment. The BSE Sensex jumped 304.49 points or 1.81% to settle at 17,143.68. The S&P CNX Nifty jumped 99.95 points or 1.96% to settle at 5,199.80. Key benchmark indices edged higher on Tuesday, 31 July 2012, with the market sentiment boosted by data showing resumption of buying of Indian stocks by foreign funds. The BSE Sensex rose 92.50 points or 0.54% to 17,236.18. The S&P CNX Nifty rose 29.20 points or 0.56% to 5,229. Key benchmark indices eked out small gains on Wednesday, 1 August 2012, after witnessing intraday volatility. The BSE Sensex rose 21.20 points or 0.12% to settle at 17,257.38. The S&P CNX Nifty rose 11.50 points or 0.22% to settle at 5,240.50. Key benchmark indices snapped four day winning streak on Thursday, 2 August 2012, as investors nervously awaited the latest policy decision from the European Central Bank. The BSE Sensex fell 33.02 points or 0.19% to settle at 17,224.36. The S&P CNX Nifty fell 12.75 points or 0.24% to settle at 5,227.75. Key benchmark indices fell for the second straight day on Friday, 3 August 2012, as a downward revision in 2012 monsoon forecast from the state-run India Meteorological Department (IMD) on Thursday, 2 August 2012, hurt investor sentiment adversely. The BSE Sensex was down 26.43 points or 0.15% to 17,197.93. The S&P CNX Nifty was down 12.85 points or 0.23% to 5,215.70. Among the 30 Sensex shares, 24 rose and the rest declined. State-run NTPC was the top Sensex gainer last week. It jumped 8.66% to Rs 166.30. NTPC's management said at a conference call held in Mumbai on Thursday, 2 August 2012, that the company has targeted capacity addition of 14,038 MW during the 12th Plan Five year plan (FY 2013 to FY 2017) post which the company's total capacity will increase to 51.05 Giga-Watt (GW). State-run power equipment maker Bhel rose 7.88% to Rs 224.65. Bhel's net profit rose 12.92% to Rs 920.90 crore on 16.46% growth in total income to Rs 8805.28 crore in Q1 June 2012 over Q1 June 2011. The company announced the results on 26 July 2012. The company's order book position declined to Rs 132900 crore as on 30 June 2012 from Rs 134681 crore as on 31 March 2012. India's largest engineering and construction company by revenue L&T rose 4.72% to Rs 1382.20. The company's recurring profit after tax rose 19% to Rs 890 crore on 26% growth in gross revenue to Rs 12078 crore in Q1 June 2012 over Q1 June 2011. The company announced the first quarter results last month. L&T said the healthy revenue growth in Q1 June 2012 was on the back of a strong order book and good progress in execution of various jobs. International sales constituted 17% of the total revenue in Q1 June 2012, L&T said in a statement. L&T's order inflow jumped 21% to Rs 19594 crore in Q1 June 2012 over Q1 June 2011 despite weak investment sentiment and prevailing global uncertainties, the company said. The major orders came from infrastructure, buildings & factories and power transmission & distribution sectors, L&T said in a statement. L&T's order book stood at Rs 153095 crore as on 30 June 2012. With regard to future business outlook, L&T said that with its enhanced capacities and presence in the diverse sectors, the company is in a good position to harness the opportunities as they emerge. The superior execution capabilities and growing order book provide visibility to sustained revenue growth in the medium term, L&T said in a statement. On the international front, select markets in the Middle East, South East Asia and CIS countries hold promising prospects where the company is strengthening its presence, L&T said in a statement. Drug maker Cipla rose 7.17% to Rs 349.95. The company said after market hours on Tuesday, 31 July 2012, its profit after tax jumped 58.2% to Rs 400.76 crore on 23.6% growth in income from operations to Rs 2012.44 crore in Q1 June 2012 over Q1 June 2011. The stock hit a 52-week high of Rs 363.60 in intraday trade on 1 Aug 2012. Cipla said its domestic sales grew by more than 30% and export sales grew by about 18% in Q1 June 2012. Drug maker Sun Pharmaceuticals Industries rose 4.71% to Rs 660.05. The stock hit a record high of Rs 663.60 in intraday trade on Friday, 3 August 2012. The company will announce Q1 results on 10 August 2012. India's largest commercial vehicle maker by sales Tata Motors rose 3.81% to Rs 220.90. The company's total sales (including exports) of Tata commercial and passenger vehicles rose 15% to 73,491 vehicles in July 2012 over July 2011. The company's domestic sales of Tata commercial and passenger vehicles rose 18% to 68,627 units in July 2012 over July 2011. Cumulative sales (including exports) during April-July 2012 rose 2% to 2.62 lakh units from the year ago period. State Bank of India (SBI) rose 3.31% to Rs 2005.55. SBI said on Thursday, 2 August 2012, said it has decided to revise downwards the interest rate on domestic term deposits for tenors of 5 years and above to 8.5% from 7 August 2012. Index heavyweight Reliance Industries (RIL) rose 3.12% to Rs 742.90. RIL has bought back 3.66 crore shares for about of Rs 2617.57 crore till 24 July 2012 under its ongoing share buyback program. RIL has set maximum buyback price of Rs 870 per share. The company has set aside Rs 10440 crore for share buyback. The buyback program opened on 1 February 2012 and closes on 19 January 2013. RIL chairman Mukesh Ambani said at the company's Annual General Meeting in June 2012 that the company's buyback program represents a highly accretive use of cash by the company and it will supplement earnings growth from operations, for higher EPS (earnings per share), in the near future. Index heavyweight and cigarette maker ITC rose 1.95% to Rs 259.35. The stock had hit a record high of Rs 262.05 in intraday trade on Thursday, 2 August 2012. The company last week reported 20.21% growth in net profit to Rs 1602.14 crore on 15.34% growth in net sales to Rs 6652.21 crore in Q1 June 2012 over Q1 June 2011. Despite series of tax hikes, ITC's performance in cigarettes business remains robust and displays pricing power for the company. India's largest private sector bank by net profit ICICI Bank rose 1.24% to Rs 939.70. The bank's profit after tax jumped 36% to Rs 1815 crore on 32% growth in net interest income to Rs 3193 crore in Q1 June 2012 over Q1 June 2011. ICICI Bank's net interest margin (NIM) improved to 3.01% for Q1 June 2012, from 2.61% for Q1 June 2011. The bank announced the results on 27 July 2012. Wipro (up 3.81%), HDFC (up 3.77%), GAIL (India) (up 3.50%), Dr Reddy's Laboratories (up 3.14%), Infosys (up 2.81%), Tata Power (up 2.8%), Bajaj Auto (up 1.98%) and Sterlite Industries (up 1.14%), edged higher from the Sensex pack. State-run Coal India fell 2.76% to Rs 343.95. The Children's Investment Fund Management LLP (TCI), a shareholder in Coal India has reportedly filed a petition in an Indian court seeking an increase in coal prices by the state-run company. According to reports, the UK-based hedge fund said in its petition to the Delhi High Court that India's coal ministry had illegally interfered in the setting of coal prices. In its petition, TCI asked the court to cancel an earlier coal ministry directive to revoke an increase in coal prices. In January, Coal India raised prices by an average 12.5%, but revoked the decision following the government's directive. TCI alleges that since the Indian regulation allows prices to be set independently by coal companies, the government's directive was illegal. The government holds 90% of the company. TCI has been pressing Coal India, the largest coal producer in the world, to change some of its policies, which it says are hurting the company's profit and the interests of the shareholders. TCI has written about this to Coal India executives, directors and officials in India's coal ministry over the past few months. TCI holds a 1.01% stake in Coal India. Motorcycle maker Hero MotoCorp (HMCL) declined 2.39% to Rs 1,958.90. The company's total sales declined 1.38% to 4.84 lakh units in July 2012 over July 2011. HMCL said new scooter, the recently-launched 110cc Maestro has already been contributing handsome volumes. Maestro, along with the Pleasure, has further strengthened the company's strong presence in the scooter segment, company said. Tractors and multi-utility vehicles maker Mahindra & Mahindra (M&M) fell 0.33% to Rs 685.40. The company on 1 August 2012, said its total tractors sales declined 1.02% to 16,521 units in July 2012 over July 2011. Domestic tractor sales declined 1.29% to 15,495 units in July 2012 over July 2011. Exports rose 3.32% 1,026 units in July 2012 over July 2011. The company on 1 August 2012, announced 19% growth in total auto sales to 47,059 units in July 2012 over July 2011. Domestic auto sales jumped 15% to 42,799 units in July 2012 over July 2011. The Passenger Vehicles segment (which includes the UVs and Verito) has registered a growth of 27%, having sold 22,011 units in July 2012, as against 17,312 units during July 2011, M&M said in a statement. The company and Telephonics Corporation (Telephonics) on Wednesday 1 August 2012 announced the formation of a joint venture (JV). The JV to be called Mahindra Telephonics Integrated Systems will provide the Indian Ministry of Defence and the Indian civil sector with radar and surveillance systems, identification friend or foe (IFF) devices and communication systems. In addition, the JV intends to provide systems for air traffic management services, homeland security and other emerging surveillance requirements. Bharti Airtel (down 3.44%), Hindalco Industries (down 0.64%) and Tata Steel (down 0.59%), edged lower from the Sensex pack.