A steep rate cut by the US Federal Reserve, decline in inflation
for the fifth successive week and market buzz the government is
considering more measures to pump in liquidity in the financial
system, triggered a solid surge on the bourses. The BSE Sensex
jumped 743.55 points or 8.22%.
After a strong rally in mid-morning trade, the market came off the
higher level on weak opening of the European markets only to bounce
back again in late trade. Bank stocks spurted on fall in inflation.
IT stocks jumped on rise in American depository receipts (ADR)
overnight. The market breadth was strong indicating a broad-based
buying.
The wholesale price index (WPI)-based year-on-year inflation
dropped to 10.68% in the week ended 18 October from 11.07% in the
previous week. Following the steady decline in headline inflation,
economists expect inflation to enter single digit domain by
end-November 2008.
Global markets had rallied on Thursday, 30 October 2008, after the
US Federal Reserve cut its main policy rate to 1% on Wednesday, 29
October 2008, to stave off the credit crunch. The Indian market was
closed on Thursday on for a public holiday and therefore it reacted
to the global rally today.
The BSE 30-share Sensex was up 743.55 points or 8.22% to 9,788.06.
The index jumped 825.91 points at the day's high of 9.870.42 in
late trade. The Sensex rose 317.15 points at day's low of 9,361.66
in early trade.
The S&P CNX Nifty was up 188.55 points or 6.99% to 2,885.60.
There has been a massive erosion in investors' wealth this year.
The barometer index BSE Sensex is down 10.498.93 points or 51.75%
in the calendar year 2008 so far from its close of 20,286.99 on 31
December 2007. It is 11,418.71 points or 53.84% below its all-time
high of 21,206.77 struck on 10 January 2008.
BSE clocked a turnover of Rs 3,699 crore today, 31 October 2008 as
compared to a turnover of Rs 3,104.10 on 29 October 2008.
Nifty November 2008 futures were at 2915, at a premium of 29.40
points as compared to spot closing of 2885.60. NSE's futures &
options (F&O) segment turnover was Rs 36,959.23 crore, which was
lower than Rs 54,223.24 crore on Wednesday, 29 October 2008.
The BSE Mid-Cap index was up 3.41% at 3,200.02 and the BSE
Small-Cap index was up 2.46% at 3,765.11. Both the indices
underperformed the Sensex.
The BSE Metal index (up 10.2% to 5,367.60), the BSE Oil & Gas index
(up 9.11% to 6,195.62) outperformed the Sensex.
The BSE Bankex (up 7.21% to 5,011.24), the BSE Teck index (up 6.6%
to 2,161.45),the BSE Auto index (up 6.39% to 2,685.62), the BSE IT
index (up 5.77% to 2,861.94), the BSE Power index (up 5.54% to
1,583.37), the BSE Capital Goods index (up 5% to 7,017.61), the BSE
FMCG index (up 3.32% to 1,799.83), the BSE HealthCare index (up
3.23% to 2,778.64), the BSE PSU index (up 2.74% to 4,564.92), the
BSE Realty index (up 2.3% to 1,978.24) and the BSE Consumer
Durables index (up 2.25% to 2,072.98) underperformed the Sensex.
The market breadth was strong. On BSE, 1577 shares advanced as
compared to 916 that declined. 82 shares remained unchanged.
India's largest private sector company by market capitalization and
oil refiner Reliance Industries (RIL) surged 13.81% to Rs 1,37.75,
after the petroleum ministry said the $4.20 per metric million
British thermal units (mmBtu) price fixed by an empowered group of
ministers for gas from Reliance Industries' KG-D6 was only for the
purpose of valuation of government share and the selling price
could be higher.
Jaiprakash Associates (up 16.55% to Rs 71.85) and Tata Power
Company (up 11.86% to Rs 689.65) were from the major gainers from
the Sensex pack.
India's largest drug maker by sales Ranbaxy Laboratories fell 1.97%
to Rs 169.45, off day's high of Rs 200. The company reported a net
loss of Rs 352.93 crore in Q3 September 2008 compared to a net
profit of Rs 168.15 crore in Q3 September 2007. It announced the
result after the market hours today.
Telecom stocks rose after mixed Q2 results. India's largest telecom
service provider by sales Reliance Communications jumped 13.76% as
net profit on consolidated basis, rose 17.33% to Rs 1530.78 crore
on 23.29% rise in total income to Rs 5645 crore in Q2 September
2008 over Q2 September 2007.
India's largest telecom service provider by market share Bharti
Airtel rose 5.52% despite a 0.9% fall in net profit to Rs 1604.78
crore on 35.6% rise in total income to Rs 8302.8 crore in Q2
September 2008 over Q2 September 2007.
India's largest real estate major by market capitalization DLF
gained 8.79% ahead of Q2 September 2008 result today.
Metal stocks shrugged off fall in metal prices on the London Metal
Exchange yesterday, 30 October 2008 triggered by fears of fall in
demand as the US economy shrank at a 0.3% annual rate in the third
quarter, its sharpest contraction in seven years. Tata Steel,
Hindustan Zinc, Sterlite Indusries rose by between 0.13% to 14.48%.
India's second largest steel maker by sales Steel Authority of
India fell 0.18%.
India's largest aluminum maker by sales Hindalco Industries jumped
13.26% as net profit rose 13.26% to Rs 719.95 crore on 15.42% rise
in total income to Rs 5,859.95 crore in Q2 September 2008 over Q2
September 2007. State-run aluminium major National Aluminium
Company (Nalco) jumped 7.43% after net profit rose 1.07% to Rs
444.46 crore on 12.3% growth in total income to Rs 1654.50 crore in
Q2 September 2008 over Q2 September 2007.
Banking stocks jumped as the fifth successive week of decline in
inflation has given more room for the central bank to cut rates.
The BSE's banking sector index Bankex rose 7.21% and was the third
biggest gainer form the sectoral indices on BSE. India's largest
private sector bank by net profit ICICI Bank jumped 15.5% as ADR
spurted 13.64% overnight. India's largest commercial bank State
Bank of India rose 0.79%.
India's second largest private sector bank by net profit HDFC Bank
gained 8.29% to Rs 981 off day's high of Rs 1,059, as ADR soared
11.38% overnight.
ICICI Bank, State Bank of India and HDFC Bank have a weightage of
24.21%, 22.44% and 20.55%, respectively in the BSE Bankex.
Punjab National Bank rose 4.56% on 31.3% rise in net profit to Rs
707.09 crore on 35.1% rise in total income to Rs 5313.18 crore in
Q2 September 2008 over Q2 September 2007.
Kotak Mahindra Bank rose 3.1% even as net profit fell 36.50% to Rs
47.86 crore in Q2 September 2008 over Q2 September 2007.
India's largest home loan lender by sales HDFC rose 17.48%.
There is speculation and anticipation in the market that the
Reserve Bank of India may cut cash reserve ratio (CRR) -- the cash
deposits that banks are required to keep with the central bank -- by
one percentage point from the existing 6.5% to 5.5%.
IT stocks gained as rally in ADRs offset a stronger rupee. India's
third largest IT exporter by sales Satyam Computer Services rose
7.61%, as ADR rose 7.61%. India's fourth largest IT exporter by
sales Wipro rose 6.16%, as ADR jumped 7.78%. India's second largest
IT exporter by sales Infosys gained 6.06%, as ADR jumped 4.98%.
India's largest IT exporter by sales Tata Consultancy Services fell
0.93%.
The Indian rupee crept higher in opening deals on Friday on
expectations the local stock market will rise and help revive
investor appetite. The partially convertible rupee was at 49.50 per
dollar, 0.4% stronger than Wednesday's close of 49.69/70 per
dollar. A stronger rupee affects IT firms negatively as they earn
most of their revenues in dollar terms.
PSU OMCs fell as weak results by BPCL and Indian Oil Corporation
offset fall of crude oil prices. Bharat Petroleum Corporation
declined 7.12% after the company reported a net loss of Rs 2625.27
crore in Q2 September 2008 as compared to net profit of Rs 1038.16
crore in Q2 September 2007.
Indian Oil Corporation declined 3.05% after the company reported a
net loss of Rs 7047.13 crore in Q2 September 2008 as compared to
net profit of Rs 3817.75 crore in Q2 September 2007.
US crude oil futures by more than $2 a barrel to below $64 a barrel
on Friday after bearish U.S. economic data rekindled worries about
falling demand. Lower oil prices will reduce underrecoveries at the
state-run oil firms on domestic sale of petrol, diesel, LPG and
kerosene at a controlled price., diesel, LPG and kerosene at a
controlled price.
India's largest oil exploration firm by revenue ONGC rose 3.04%
despite a 5.7% fall in net profit to Rs 4808 crore in Q2 September
2008 over Q2 September 2007 caused by a steep rise in the subsidy
burden.
Cairn India galloped 10.85% after the company reported a net profit
of Rs 81.44 crore in Q3 September 2008 as compared to net loss of
Rs 8.39 crore in Q3 September 2007.
Aban Offshore jumped 13.2% as net profit surged 72.3% to Rs 81.34
crore in Q2 September 2008 over Q2 September 2007.
Essar Oil surged 11.1% on posting a net profit of Rs 26 crore in Q2
September 2008 compared to a net loss of Rs 14 crore in Q2
September 2007.
Cement stocks rose despite south based India Cements posting weak
results. India Cements surged 15.83% even as net profit fell 39.69%
to Rs 134.27 crore on 23% rise in total income to Rs 1096.59 crore
in Q2 September 2008 over Q2 September 2007. ACC, Ultratech
Cements, Grasim Industries and Birla Corporation rose by between
0.21% to 5.49%.
Rate sensitive auto stocks jumped on hopes lower interest rates.
Maruti Suzuki India, Mahindra & Mahindra gained by between 4% to
23.09%. However, India's largest motorbike maker by sales Hero
Honda Motors fell 1.42%. Lower interest rates may spur auto sales
which are largely driven through finance.
India's largest commercial vehicle maker by sales Tata motors rose
9.11% on a lower-than-expected 34.13% fall in net profit to Rs
346.99 crore in Q2 September 2008 over Q2 September 2007.
Realty stocks were mixed amid a capital crunch being faced by
realty firms. Indiabulls Real Estate and Unitech fell by between
3.27% to 3.71%. India's largest real estate major by market
capitalization DLF gained 8.79% ahead of Q2 September2008 result
today.
IVRCL Infrastructure & Projects surged 6.68% as net profit rose
61.98% to Rs 57.10 crore in Q2 September 2008 over Q2 September
2007.
Suzlon Energy fell 3.79% on reports of initiating talks with
private equity firms for sale of shares to raise funds
EID Parry India gained 4.43% after the company reported net profit
of Rs 611.89 crore in Q2 September 2008 as compared to a net loss
of Rs 5.74 crore in Q2 September 2007.
Rashtriya Chemicals & Fertilizers moved up 3.26% as net profit
surged 116.6% to Rs 84.37 crore in Q2 September 2008 over Q2
September 2007.
Tata Chemicals surged 18.1% as net profit jumped 51.39% to Rs
215.80 crore in Q2 September 2008 over Q2 September 2007.
MMTC rose 1.45% as net profit rose 24.98% to Rs 46.78 crore on
110.92% rise in total income to Rs 12497.23 crore in Q2 September
2008 over Q2 September 2007.
Kirloskar Electric Company rose 4.16% after the company decided to
set up a manufacturing unit for AC motors and AC generators.
Suzlon Energy clocked the highest volume of 1.68 crore shares on
BSE. Hindalco Industries (1.34 crore shares), Reliance Petroleum (1
crore shares), Unitech (84.98 lakh shares) and Core Projects &
Infrastructure (81.36 lakh shares) were the other volume toppers in
that order.
Reliance Industries clocked the highest turnover of Rs 435.8o crore
on BSE. Reliance Capital (Rs 186.92 crore), ICICI Bank (Rs 170.56
crore), State Bank of India (Rs 148.38 crore) and Reliance
Communications (Rs 135.56 crore) were the other turnover toppers in
that order.
European stocks fell as on concerns about the global economy
weighed on investors. Key benchmark indices in France, Germany and
UK were down by between 0.16% to 2.18%.
Japan's Nikkei average dropped 5% after a lower-than-expected 20
basis points cut in interest rate announced by Bank of Japan today,
31 October 2008. While Japanese stocks tumbled, other Asian stocks
were trading mixed. Key benchmark indices in China, Singapore and
Hong Kong, fell by between 0.66% to 3.09%. However, South Korea and
Taiwan rose by between 2.61% to 3.99%.
China cut rates on Wednesday, 29 October 2008 with Taiwan and Hong
Kong following up with rate cuts on Thursday.
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