Bulls were in command as key benchmark indices continued their
upward journey in mid-afternoon trade. Optimism about Q2 September
2009 which will start trickling in from the second week of October
2009, gains in European stocks and higher US index futures,
bolstered sentiment. The BSE 30-share Sensex was up 238.37 points
or 1.41%. The barometer index was trading above the psychological
17,000 level after crossing that level in morning trade. The BSE
Sensex and the S&P CNX Nifty today hit their highest level in more
than 16 months.
After a modest start, the market surged in mid-morning trade. The
market extended gains later. The market hit a fresh intraday high
in afternoon trade. A small correction pulled the market lower
later. The market surged in mid-afternoon trade with the Sensex
hitting a fresh intraday high on higher US index futures.
Metal, banking and IT stocks led the rally. Oil India was currently
trading at a premium of 9.25% over the IPO price of Rs 1,050.
Traders may refrain from building large positions this week because
this is a truncated trading week as the market remains closed on
Friday, 2 October 2009, on account of Gandhi Jayanti. Further,
shares bought in the cash segment on Tuesday, 29 September 2009,
cannot be sold today, 30 September 2009, due to settlement related
issues because commercial banks are closed today for half-yearly
closing of accounts.
There is optimism about Q2 September 2009 results after advance tax
collections registered a positive growth in the second quarter
after witnessing a negative growth in the first quarter. Corporate
advance tax and advance personal income-tax were up by 14.7% and
1.7%, respectively in the September 2009 quarter. Infosys
kickstarts the reporting season on 9 October 2009.
Latest economic data has been strong. The index of six core
industries having a combined weight of 26.7% in the index of
industrial production (IIP) registered a growth of 7.1% in August
2009 compared to a growth of 2.1% in August 2008. During
April-August 2009-10, six core industries registered a growth of
4.8% as against 3.3% during the corresponding period of the
previous year. Coal and cement sector boosted overall growth in the
six infrastructure industries in August 2009.
Meanwhile, the Reserve Bank of India (RBI) deputy governor K C
Chakrabarty has said that rising inflationary pressures could limit
the scope for a sustained growth supported monetary policy stance.
The central bank has aggressively cut policy rates and pumped huge
liquidity in the system in the aftermath of the global financial
crisis last year. It may be recalled Finance Minister Pranab
Mukherjee recently spoke of the need for the fiscal stimulus to
continue for a few more quarters until the economy is back on
track.
Coming back to equities, a section of the market is, however,
concerned that a glut in share sales may suck liquidity from the
secondary market. The corporate sector has raised large sums of
money through equity and equity related instruments in the past six
months or so to either to retire high cost debt or to fund
expansion. The supply of paper by Indian firms appear limitless,
raising concerns that additional share sales will suck liquidity
from the secondary market.
As per one report, companies plan to raise at least Rs 40,000 crore
through initial public offers (IPOs)/follow on public offers (FPOs)
in the second half of the current financial year. Power companies
such as GMR Energy, Indiabulls Power and JSW Energy and state-run
Bharat Heavy Electricals and NTPC are likely to tap the primary
market. Reliance Infratel also announced on Tuesday, 22 September
2009, its intention to raise Rs 5,000 crore from the primary
market. A number of companies are also in the fray to raise funds
by way of qualified institutional placement (QIP), reports suggest.
S. Pradhan, the joint secretary of the department of disinvestment,
Government of India, today said the government plans to sell stakes
in at least five state-run firms by the end of the fiscal year in
March 2010 following successful IPOs of two firms that raised $1.8
billion. His statement comes close on the heels of media reports
that the government is planning to announce a blueprint for selling
its stake in state-owned firms in the first week of October 2009.
The policy is expected to suggest how the government will
eventually bring down its stake in public sector companies to 75%
over a period of time.
European shares rose on Wednesday powered by gains in energy and
mining stocks, as commodity prices firmed on the final day of the
quarter, offsetting weakness in banks. The key benchmark indices in
France, Germany and UK were up by between 0.24% to 0.5%.
Asian stocks were mixed after a surprise fall in US consumer
confidence. Key benchmark indices in Japan, South Korea Hong Kong
and Singapore were down by between 0.39% to 1%. Key benchmark
indices in China, Japan and Taiwan were up by between 0.33% to
1.07%.
A gauge of China's manufacturing activity released Wednesday
indicated expansion for the sixth straight month in September,
although conditions cooled slightly from August, suggesting the
rebound in industrial activity remains intact but is beginning to
level off.
Japanese manufacturers increased production for a sixth month in
August, capping the longest stretch of gains in 12 years, as
emergency spending by governments worldwide rekindled global trade.
Factory output rose 1.8% last month after climbing 2.1% in July,
the Trade Ministry said today in Tokyo.
The International Monetary Fund (IMF) will reportedly raise its
2010 growth forecast for the world economy to 3.1% from 2.5% to
reflect improving economic conditions. The IMF is due to update its
forecasts in its World Economic Outlook to be released in Istanbul
on Thursday, 1 October 2009. The IMF is likely to revise its global
forecast for this year to a 1.1% contraction from a negative 1.4%
predicted earlier.
Trading in US index futures indicated the Dow could gain 31 points
at the bell on Wednesday, 30 September 2009.
US markets ended lower on Tuesday, 29 September 2009 as a drop in
consumer confidence dragged on the market. The Dow Jones Industrial
Average fell 47.16 points, or 0.5%, to 9,742.20. The S&P 500 index
dropped 2.38 points, or 0.2%, to 1,060.60, and the Nasdaq Composite
index shed 6.70 points, or 0.3%, to 2,124.04.
The US consumer-confidence index dropped to 53.1 in September from
54.5 in August. Economists had expected the gauge to rise to 57.
Meanwhile, the S&P/case-shiller home price report for July was
better-than-expected. The report showed a 13.3% year-over-year
decline, which was better than the 14.2% decline expected. Home
prices continued to rebound, up for a third straight month in July,
after a three-year slide.
At 14:20 IST, the BSE 30-share Sensex was up 238.37 points or 1.41%
to 17091.28. The Sensex rose 253.89 points at the day's high of
17,106.80 in mid-afternoon trade, its highest since 21 May 2008.
The barometer index rose 15.55 points at the day's low of 16,868.46
in early trade.
The S&P CNX Nifty was up 65.75 points or 1.31 % to 5,072.60. It hit
a high of 5,076.35 so far in the day, its highest level since 22
May 2008.
The market breadth, indicating the overall health of the market was
strong. On BSE, 1,535 shares rose as compared with 1,126 that
declined. A total of 86 shares remained unchanged.
Among the 30-member Sensex pack, 25 rose and rest fell.
The BSE Mid-Cap index rose 0.66% and the BSE Small-Cap index rose
1.02%.
Index heavyweight Reliance Industries (RIL) rose 1.8% to Rs
2204.90. In the face of opposition from the Power Ministry and Anil
Ambani group firm Reliance Infrastructure on the marketing margins
charged, Reliance Industries (RIL) has justified the levy saying it
was essential to cover risks and costs incurred in marketing of
gas.
Terming as illegal the market margin, Reliance Infra had refused to
pay the levy prompting RIL to issue a notice for suspension of fuel
supply for "default". NTPC has sought to know whether the margins
levied by RIL had government's approval.
RIL had said on 24 September 2009 it has signed gas supply
agreement with state-run utility NTPC to supply gas for some of its
power plants for five years. Reliance will supply 0.61 million
standard cubic metres a day (mscmd) to NTPC, and expects to start
supplies within a week.
Meanwhile, recent report suggest the outlook for Asian oil
refiners, previously hit by a sharp fall in margins, is now
improving on a likely ramp-up in demand and slowing capacity
expansion.
Oil exploration stocks were mixed on a decent debut of Oil India.
India's biggest state-run oil exploration firm by revenue Oil &
Natural Gas Corporation (ONGC) fell 1.36% to Rs 1170, off the day's
high of Rs 1213. ONGC on 23 September 2009 said it will invest over
Rs 5000 crore in the next two years in bringing new oil and gas
finds into production. Cairn India rose 0.42%.
India's second biggest oil and gas exploration firm by revenue Oil
India was trading at Rs 1,146.85, a premium of 9.22% over the IPO
price of Rs 1050. The stock debuted on the BSE at Rs 1019, a
discount of 2.95% over the IPO price of Rs 1050.
Metal stocks rose as LMEX, a gauge of six metals traded on the
London Metal Exchange gained 0.25% on Tuesday, 29 September 2009.
Tata Steel, Steel Authority of India, National Aluminum Company,
Hindustan Zinc, Hindalco Industries, JSW Steel rose by between
0.02% to 1.43%.
India's largest copper maker by sales Sterlite Industries rose
2.94%. A US bankruptcy judge on 24 September 2009 rejected attempts
by India's Sterlite Industries to sweeten its offer for U.S. copper
miner Asarco LLC, and recommended for the second time that rival
bidder Grupo Mexico SAB de CV regain control of the company.
Sterlite, however, maintained it was still in the race to acquire
the copper miner.
Sterlite said on 21 September 2009 said that it would release Grupo
Mexico from a potential legal liability of nearly $8 billion if the
Indian miner can win control of bankrupt US copper miner Asarco
LLC.
In a court document filed on Monday, Sterlite said that if a
federal court approves its plan to acquire Asarco over rival bidder
Grupo Mexico's offer, it would not hold Grupo Mexico liable for
more than about $900 million of liability related to the 2003
transfer of a Peruvian mine. Sterlite, a unit of India-focused
mining company Vedanta Resources, has been facing off with Mexican
miner Grupo Mexico for acquiring control Asarco, which has been
under bankruptcy protection since 2005.
Banking stocks rose after Finance secretary Ashok Chawla on Tuesday
said there is a need to look at consolidation of banks and that
government is not discouraging Indian banks from making
acquisitions abroad. Bank stocks also got support on higher advance
tax payment by some top banks in the second installment this
fiscal.
India's largest bank by net profit and branch network State Bank of
India rose 4%. Chairman O.P. Bhatt on 8 September 2009 said the
bank's earnings are likely to grow 30-35% in Q2 September 2009 over
Q2 September 2008.
India's largest private sector bank by net profit ICICI Bank rose
3.12%. Its ADR rose 0.28% on Tuesday. India's second largest
private sector bank by net profit HDFC Bank rose 1.49% even as its
ADR fell 0.26% on Tuesday.
IT stocks rose for the second straight day as an increase in the
mergers & acquisitions in the United States suggested that
companies are more optimistic about the business outlook. US is the
biggest market for Indian IT firms. India's third largest software
services exporter by sales Wipro rose 3.11% as its American
depository receipt (ADR) rose 1.45% on Tuesday.
India's second largest software services exporter by sales Infosys
rose 1.28% as its ADR rose 0.42% on Tuesday.
India's largest IT exporter by sales Tata Consultancy Services rose
1.45% after the company said before market hours today it had
signed a multi-million dollar deal with a Singapore state
organisation to provide annual application management services for
two years.
A news agency recently quoted TCS chief executive S. Ramadorai as
saying that the company expects a recovery in the global banking
sector to boost its revenues this year. Ramadorai said the company
was seeing some signs of a recovery in the demand for outsourcing,
especially from the banking, financial services and insurance
sectors that account for 43% of its business.
India's largest engineering and construction firm by sales Larsen &
Toubro rose 1.92% on reports company is close to launching a $600
million share sale to institutional investors. Citigroup, Morgan
Stanley and Bank of America Merrill Lynch are the arrangers to the
offer.
Meanwhile, Larsen & Toubro is reportedly eyeing big bucks from the
nuclear power business with annual revenue projections of Rs
7,000-8,000 crore. The company, has already entered into agreement
with four major global vendors of nuclear power equipment.
India's largest power equipment maker by sales Bharat Heavy
Electricals rose 2.29% after the company said on Wednesday it had
won a Rs 270 crore ($56 million) contract in Belarus to build a 120
megawatts power plant.
Dr Reddys Laboratories fell 2.08% after the company voluntarily
recalled four products from its key US market as they had been
observed to contain some oversized tablets.
Wednesday, September 30, 2009
Sensex crosses 17,000 mark
The key benchmark indices extended gains in mid-morning trade. The
BSE 30-share Sensex was up 172.84 points or 1.03%. The BSE Sensex
crossed psychological 17,000 mark. The BSE Sensex and S&P CNX Nifty
hit their highest level in more than 16 months. IT, auto and
banking stocks rose. Oil exploration stocks also in demand after a
decent debut from state-run Oil India. The stock was currently
trading at a premium of 7.87% over the IPO price of Rs 1,050. The
market breadth was strong.
Overall volumes on the bourses may remain low as traders may
refrain from building large positions this week because this is a
truncated trading week as the market remains closed on Friday, 2
October 2009, on account of Gandhi Jayanti. Further, shares bought
in the cash segment on Tuesday, 29 September 2009, cannot be sold
today, 30 September 2009, due to settlement related issues because
commercial banks are closed today for half-yearly closing of
accounts
Meanwhile government disinvestment official said sees at least 5
stake sales in state firms by March 2010. Meanwhile, the government
is reportedly planning to announce a blueprint for selling its
stake in state-owned firms in the first week of October 2009. The
policy is expected to suggest how the government will eventually
bring down its stake in public sector companies to 75% over a
period of time.
The next trigger for the stock market is Q2 September 2009 results
of India Inc next month. There is optimism about Q2 September 2009
results after advance tax collections registered a positive growth
in the second quarter after witnessing a negative growth in the
first quarter. Corporate advance tax and advance personal
income-tax were up by 14.7% and 1.7%, respectively in the September
2009 quarter. Infosys kickstarts the reporting season on 9 October
2009.
Latest economic data has been strong. The index of six core
industries having a combined weight of 26.7% in the index of
industrial production (IIP) registered a growth of 7.1% in August
2009 compared to a growth of 2.1% in August 2008. During
April-August 2009-10, six core industries registered a growth of
4.8% as against 3.3% during the corresponding period of the
previous year. Coal and cement sector boosted overall growth in the
six infrastructure industries in August 2009.
Meanwhile, the Reserve Bank of India (RBI) deputy governor KC
Chakrabarty has said that rising inflationary pressures could limit
the scope for a sustained growth supported monetary policy stance.
The central bank has aggressively cut policy rates and pumped huge
liquidity in the system in the aftermath of the global financial
crisis last year. It may be recalled Finance Minister Pranab
Mukherjee recently spoke of the need for the fiscal stimulus to
continue for a few more quarters until the economy is back on
track.
Coming back to equities, a section of the market is concerned that
a glut in share sales may suck liquidity from the secondary market.
The corporate sector has raised large sums of money through equity
and equity related instruments in the past six months or so to
either to retire high cost debt or to fund expansion. The supply of
paper by Indian firms appear limitless, raising concerns that
additional share sales will suck liquidity from the secondary
market.
As per one report, companies plan to raise at least Rs 40,000 crore
through initial public offers (IPOs)/follow on public offers (FPOs)
in the second half of the current financial year. Power companies
such as GMR Energy, Indiabulls Power and JSW Energy and state-run
Bharat Heavy Electricals and NTPC are likely to tap the primary
market. Reliance Infratel also announced on Tuesday, 22 September
2009, its intention to raise Rs 5,000 crore from the primary
market. A number of companies are also in the fray to raise funds
by way of qualified institutional placement (QIP), reports suggest.
Most Asian stocks were mixed in volatile trade after a surprise
fall in U.S. consumer confidence. The key benchmark indices in
Japan, South Korea Hong Kong and Singapore fell by between 0.51% to
0.93%. Key benchmark indices in China, Japan and Taiwan were up by
between 0.01% to 1.46%.
Trading in US index futures indicated Dow could open flat today, 30
September 2009.
US markets ended lower on Tuesday, 29 September 2009 as a drop in
consumer confidence dragged on the market. The Dow Jones Industrial
Average fell 47.16 points, or 0.5%, to 9,742.20. The S&P 500 index
dropped 2.38 points, or 0.2%, to 1,060.60, and the Nasdaq Composite
index shed 6.70 points, or 0.3%, to 2,124.04.
The US consumer-confidence index dropped to 53.1 in September from
54.5 in August. Economists had expected the gauge to rise to 57.
Meanwhile, the S&P/case-shiller home price report for July was
better-than-expected. The report showed a 13.3% year-over-year
decline, which was better than the 14.2% decline expected. Home
prices continued to rebound, up for a third straight month in July,
after a three-year slide.
At 11:20 IST, the BSE 30-share Sensex was up 172.84 points or 1.03%
to 17025.75. The Sensex rose 175.88 points at the day's high of
17,028.79 in morning trade, its highest since 23 May 2008. The
barometer index rose 15.55 points at the day's low of 16,868.46 in
early trade.
The S&P CNX Nifty was up 40.85 points or 0.82 % to 5,047.70. It hit
a high of 5,051.40 its highest level since 23 May 2008.
The market breadth, indicating the overall health of the market was
strong. On BSE, 1355 shares rose as compared with 806 that
declined. A total of 65 shares remained unchanged.
Among the 30-member Sensex pack, 25 rose and rest fell.
The BSE Mid-Cap index rose 0.59% and the BSE Small-Cap index rose
0.8%.
BSE 30-share Sensex was up 172.84 points or 1.03%. The BSE Sensex
crossed psychological 17,000 mark. The BSE Sensex and S&P CNX Nifty
hit their highest level in more than 16 months. IT, auto and
banking stocks rose. Oil exploration stocks also in demand after a
decent debut from state-run Oil India. The stock was currently
trading at a premium of 7.87% over the IPO price of Rs 1,050. The
market breadth was strong.
Overall volumes on the bourses may remain low as traders may
refrain from building large positions this week because this is a
truncated trading week as the market remains closed on Friday, 2
October 2009, on account of Gandhi Jayanti. Further, shares bought
in the cash segment on Tuesday, 29 September 2009, cannot be sold
today, 30 September 2009, due to settlement related issues because
commercial banks are closed today for half-yearly closing of
accounts
Meanwhile government disinvestment official said sees at least 5
stake sales in state firms by March 2010. Meanwhile, the government
is reportedly planning to announce a blueprint for selling its
stake in state-owned firms in the first week of October 2009. The
policy is expected to suggest how the government will eventually
bring down its stake in public sector companies to 75% over a
period of time.
The next trigger for the stock market is Q2 September 2009 results
of India Inc next month. There is optimism about Q2 September 2009
results after advance tax collections registered a positive growth
in the second quarter after witnessing a negative growth in the
first quarter. Corporate advance tax and advance personal
income-tax were up by 14.7% and 1.7%, respectively in the September
2009 quarter. Infosys kickstarts the reporting season on 9 October
2009.
Latest economic data has been strong. The index of six core
industries having a combined weight of 26.7% in the index of
industrial production (IIP) registered a growth of 7.1% in August
2009 compared to a growth of 2.1% in August 2008. During
April-August 2009-10, six core industries registered a growth of
4.8% as against 3.3% during the corresponding period of the
previous year. Coal and cement sector boosted overall growth in the
six infrastructure industries in August 2009.
Meanwhile, the Reserve Bank of India (RBI) deputy governor KC
Chakrabarty has said that rising inflationary pressures could limit
the scope for a sustained growth supported monetary policy stance.
The central bank has aggressively cut policy rates and pumped huge
liquidity in the system in the aftermath of the global financial
crisis last year. It may be recalled Finance Minister Pranab
Mukherjee recently spoke of the need for the fiscal stimulus to
continue for a few more quarters until the economy is back on
track.
Coming back to equities, a section of the market is concerned that
a glut in share sales may suck liquidity from the secondary market.
The corporate sector has raised large sums of money through equity
and equity related instruments in the past six months or so to
either to retire high cost debt or to fund expansion. The supply of
paper by Indian firms appear limitless, raising concerns that
additional share sales will suck liquidity from the secondary
market.
As per one report, companies plan to raise at least Rs 40,000 crore
through initial public offers (IPOs)/follow on public offers (FPOs)
in the second half of the current financial year. Power companies
such as GMR Energy, Indiabulls Power and JSW Energy and state-run
Bharat Heavy Electricals and NTPC are likely to tap the primary
market. Reliance Infratel also announced on Tuesday, 22 September
2009, its intention to raise Rs 5,000 crore from the primary
market. A number of companies are also in the fray to raise funds
by way of qualified institutional placement (QIP), reports suggest.
Most Asian stocks were mixed in volatile trade after a surprise
fall in U.S. consumer confidence. The key benchmark indices in
Japan, South Korea Hong Kong and Singapore fell by between 0.51% to
0.93%. Key benchmark indices in China, Japan and Taiwan were up by
between 0.01% to 1.46%.
Trading in US index futures indicated Dow could open flat today, 30
September 2009.
US markets ended lower on Tuesday, 29 September 2009 as a drop in
consumer confidence dragged on the market. The Dow Jones Industrial
Average fell 47.16 points, or 0.5%, to 9,742.20. The S&P 500 index
dropped 2.38 points, or 0.2%, to 1,060.60, and the Nasdaq Composite
index shed 6.70 points, or 0.3%, to 2,124.04.
The US consumer-confidence index dropped to 53.1 in September from
54.5 in August. Economists had expected the gauge to rise to 57.
Meanwhile, the S&P/case-shiller home price report for July was
better-than-expected. The report showed a 13.3% year-over-year
decline, which was better than the 14.2% decline expected. Home
prices continued to rebound, up for a third straight month in July,
after a three-year slide.
At 11:20 IST, the BSE 30-share Sensex was up 172.84 points or 1.03%
to 17025.75. The Sensex rose 175.88 points at the day's high of
17,028.79 in morning trade, its highest since 23 May 2008. The
barometer index rose 15.55 points at the day's low of 16,868.46 in
early trade.
The S&P CNX Nifty was up 40.85 points or 0.82 % to 5,047.70. It hit
a high of 5,051.40 its highest level since 23 May 2008.
The market breadth, indicating the overall health of the market was
strong. On BSE, 1355 shares rose as compared with 806 that
declined. A total of 65 shares remained unchanged.
Among the 30-member Sensex pack, 25 rose and rest fell.
The BSE Mid-Cap index rose 0.59% and the BSE Small-Cap index rose
0.8%.
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