Volatile week ends with gains

The market managed to end the volatile week on a positive note. The market fell in three out of five trading sessions. Most of the gains were recorded in the last trading session of the week on Friday, 28 September 2012, when the market rose on the back of a global rally that was triggered by Spain announcing a crisis budget for 2013 on Thursday, 27 September 2012, based mostly on spending cuts. The BSE Sensex rose 9.91 points or 0.05% to 18,762.74. The 50-unit S&P CNX Nifty rose 12.15 points or 0.21% to settle at 5,703.30. The BSE Mid-Cap index rose 2.72% and the BSE Small Cap index rose 3.06%. Both these indices outperformed the Sensex. The Sensex has gained 1,333.18 points or 7.64% in September month. The Sensex has jumped 3,307.82 points or 21.4% in calendar 2012 so far (till 28 September 2012). From a 52-week low of 15,135.86 on 20 December 201, the Sensex has risen 3,626.88 points or 23.96%. Foreign institutional investors (FIIs) have bought shares worth net Rs 19261.50 crore in September 2012 so far (till 27 September 2012). They had purchased shares worth net Rs 10803.90 crore in August 2012. FIIs have bought shares worth net Rs 82331 crore in calendar 2012 so far (till 27 September 2012). FIIs offloaded shares worth a net Rs 2714.20 crore in 2011. Trading for the week began on a weak note as key benchmark indices declined on Monday, 24 September 2012, on global growth jitters, European sovereign-debt crisis and on ongoing tension between China and Japan. The BSE Sensex lost 79.49 points or 0.42% to settle at 18,673.34. The S&P CNX Nifty shed 21.55 points or 0.38% to settle at 5,669.60. Key benchmark indices eked out small gains on Tuesday, 25 September 2012, as index heavyweights ITC and Reliance Industries (RIL) edged higher. Data showing that foreign funds remained net buyers of Indian stocks on Monday, 24 September 2012, underpinned sentiment. The BSE Sensex rose 21.07 points or 0.11% to settle at 18,694.41. The S&P CNX Nifty rose 4.30 points or 0.08% to settle at 5,673.90. Key benchmark indices edged lower on Wednesday, 26 September 2012, as global growth jitters, euro-zone debt worries and ongoing territorial dispute between China and Japan hit investor sentiment adversely. The BSE Sensex shed 62.24 points or 0.33% to settle at 18,632.17. The S&P CNX Nifty shed 10.45 points or 0.18% to settle at 5,663.45. Key benchmark indices edged lower in volatile trade on Thursday, 27 September 2012, as traders rolled over positions in the futures & options (F&O) segment from the near month September 2012 series to October 2012 series. The September 2012 F&O contracts expired on 27 September 2012. The BSE Sensex fell 52.67 points or 0.28% to settle at 18,579.50. The S&P CNX Nifty shed 13.95 points or 0.25% to settle at 5,649.50. Key benchmark indices edged higher on Friday, 28 September 2012, with market sentiment was boosted by data showing that foreign funds remained buyers of Indian stocks on Thursday, 27 September 2012. The BSE Sensex jumped 183.24 points or 0.99% to settle at 18,762.74. The S&P CNX Nifty jumped 53.80 points or 0.95% to 5,703.30. Among 30 Sensex shares, 16 rose and the remaining shares declined. India's largest tractor maker by sales Mahindra & Mahindra (M&M) topped the Sensex gainers. The stock rose 6.97% to Rs 864.50. The stock edged higher on favourable outlook for Rabi or winter crop following wide-spread rains in August and September. Winter crops will gain from high soil moisture and brimming water reservoirs, which have filled up in the past four weeks after dipping to alarmingly low levels following a prolonged dry patch at the start of monsoon season. Shares of most power generation, transmission and distribution companies and power equipment makers rose on renewed buying after the Cabinet Committee on Economic Affairs on Monday (24 September 2012) evening approved the scheme for financial restructuring of state distribution companies (Discoms). India's largest state-run power equipments maker by sales Bhel jumped 6.26% to Rs 246.85. Private sector power utility Tata Power rose 4.14% to Rs 106.95. However, state-run power utility NTPC fell 0.47% to Rs 167.85. Most FMCG stocks rose on favourable outlook for Rabi or winter crop following wide-spread rains in August and September. FMCG firms derive substantial revenue from rural India. Index heavyweight and cigarette maker ITC rose 3.92% to Rs 271.90. FMCG major Hindustan Unilever rose 2.83% to Rs 544.55. India's largest car maker by sales Maruti Suzuki India rose 2.83% to Rs 1349.90. The company will unveil its vehicle sales data for September on 1 October 2012. India's second largest motorcycle maker by sales Bajaj Auto gained 1.79% to Rs 1,832.50. The stock hit a record high of Rs 1,850 in intraday trade on Friday, 28 September 2012. The company will declare its Q2 results on 20 October 2012. However, India's largest motorcycle maker by sales Hero MotoCorp fell 2.17% to Rs 1879.30. Engineering and construction major Larsen & Toubro rose 0.79% to Rs 1,596.75. The company said during market hours on Friday, 28 September 2012, that its construction division secured new orders valued Rs 2130 crore across various business segments in September 2012. The stock hit a 52-week high of Rs 1,619 in intraday trade on Friday. Cipla (up 5.33%), Sun Pharmaceuticals Industries (up 3.59%), Hindalco Industries (up 2.38%), State Bank of India (up 1.14%) and Wipro (up 1.01%), edged higher from the Sensex pack. Index heavyweight Reliance Industries (RIL) fell 1.55% to Rs 836.70. RIL has purchased 3.9 crore shares and spent Rs 2794.73 crore (excluding brokerage, service tax, Securities Transaction Tax, Stamp Duty, Exchange Transaction Charges and Sebi fees) till 18 September 2012 under the company's 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. India's largest listed telecom operator by sales Bharti Airtel topped the Sensex losers. The stock fell 5.11% to Rs 264.85. The company after trading hours on Thursday, 27 September 2012, announced restructuring of its board of directors and that of its subsidiary Bharti Infratel. The changes have been effected in view of the proposed IPO of Bharti Infratel, which is a leading provider of passive telecom infrastructure in India, Bharti Airtel said in statement. Mr. Manish Kejriwal and Ms. Obiageli Katryn Ezekwesili are the new appointees on the board of Bharti Airtel. Meanwhile, Telecom Secretary R. Chandrashekhar said Department of Telecommunications is likely to issue notices to wireless operators on Friday, 28 September 2012, asking them to immediately stop offering third-generation roaming services in areas where they don't hold bandwidth. The operators will be asked to stop services immediately, while they will be given 60 days to respond on the reasons for the breach of licensing terms, he said. Idea Cellular, Bharti Airtel and the local unit of UK-based Vodafone Group PLC had in July 2011 signed agreements between them that allowed their customers to avail 3G services in areas where at least one the companies has bandwidth. In late December, the telecom department asked the companies to stop the services, saying the terms of their 3G licenses don't allow such pacts. Bharti, Idea, and Vodafone India then went to the Telecom Disputes Settlement and Appellate Tribunal, which initially stayed the ban. However, a two-member bench of the tribunal in July gave a split verdict on whether or not operators could continue providing services in areas where they don't hold 3G bandwidth. Sterlite Industries (down 4.65% to Rs 99.35), ONGC (down 4.41% to Rs 280.40), Coal India (down 3.35% to Rs 359.45), Tata Motors (down 2.87% to Rs 267.45), Infosys (down 2.34% to Rs 2534) and Tata Steel (down 2.02% to Rs 400.75), edged lower from the Sensex pack. The Reserve Bank of India (RBI) in consultation with the Government of India after trading hours on Thursday, 27 September 2012, announced the government's borrowing programme for the second half of the current financial year. As per the plan, the government will borrow Rs 2 lakh crore during the period from 1 October 2012 to 31 March 2013. As hitherto, all the auctions covered by the calendar will have the facility of non-competitive bidding scheme under which five per cent of the notified amount will be reserved for the specified retail investors, RBI said press release. Like in the past, the Government of India/RBI will continue to have the flexibility to bring about modifications in the above calendar in terms of notified amount, issuance period, maturities etc. and to issue different types of instruments depending upon the requirement of the Government of India, evolving market conditions and other relevant factors after giving due notice, RBI said. The eight core industries, which have a combined weight of 37.9% in the Index of Industrial Production (IIP), registered a growth 2.1% in August 2012, compared with 3.8% growth in August 2011. The moderation in growth was on account of decline in production of natural gas, cement, fertilizers and crude oil and also due to decline in the growth rate in production of steel and electricity generation during the month, the Ministry of Commerce & Industry said in a statement on Friday, 28 September 2012. During April-August 2012, the cumulative growth rate of the core industries was 2.8% as against their growth at 5.5% during the corresponding period last year. Finance Minister P. Chidambaram Thursday, 27 September 2012, said the recent pro-business measures that the government took to rein in its gaping fiscal deficit and attract investments were necessary and unavoidable. While speaking to reporters after a meeting the UPA co-ordination committee, Mr. Chidambaram said the government is considering more economic steps. The need to do more reforms was discussed at the meeting, he said. The specific measures will come before the cabinet (for approval), he said. The prime minister has underlined the need for a number of measures that will ensure that there is no volatility in the rupee, and that investment will continue to flow into India as well as stimulate domestic investors so that they will also invest in the economy, Mr. Chidambaram said. Moody's Investors Service on Wednesday, 26 September 2012, said it will retain its 'stable' outlook on India, expecting economic growth to improve on the back of consumer demand, although the country is still constrained by its fiscal deficit. Recent actions by the government to undertake key reforms showed some determination to take unpopular steps, Atsi Sheth, vice-president of the sovereign risk group at Moody's Investors Service, said in a conference call with reporters. Sheth added Moody's still expected the country to overshoot a fiscal deficit target of 5.1 percent of gross domestic product for 2012/13 fiscal year ending March. "A credit challenge for India is its fiscal positions," Sheth said, adding Moody's will wait to see more efforts towards ensuring that India's fiscal position is less vulnerable to slowdown in economic growth. Moody's currently has Baa3 rating on the sovereign. The outlook for Rabi or winter crops has improved due to the annual monsoon rains' delayed withdrawal, which has provided crops with badly needed moisture after months of insufficient rainfall. The monsoon rains usually leave India by 1 September, but this year rainfall began to pick up in late August, after insufficient rain in preceding months forced four major agricultural states to declare a drought. The four-month southwest monsoon season that starts from June accounts for almost 70% of total annual moisture that Indian soil receives in a year. The Centre has advised state government to go for early sowing of Rabi crops, especially in rainfed areas to make use of the moisture available in the soil due to wide-spread rains in August and September. State-run India Meteorological Department (IMD) on 24 September 2012 said that the southwest monsoon has started withdrawing. The government has set food grain target for 2012-13 at 249.52 million tonnes. The Ministry of Agriculture on 24 September 2012 said as per the first advance estimates of production of Kharif crops, 117.18 million tonnes (MT) foodgrains is likely to be produced in the current Kharif season.