Market rallies on the back of firm Asian markets

The market followed the rally in Asian markets after comments by US Federal Reserve chairman Ben Bernanke rose hopes of further cuts in interest rates. Better-than-expected July-September GDP numbers of India also boosted the market sentiment. The market opened on a positive note at 19,136, up 133 points and strong optimism among investors kept the Sensex firm above the 19,200 mark for the better part of the session. In the last hour of the trading session the buoyancy among front-line metal, realty, information technology, and oil stocks lifted the Sensex to touch the day's high of 19,425. The market remained buoyant thereafter and finally ended the session with a gain of 360 points at 19,363, while the Nifty closed the session at 5,763, up 128 points.

The breadth of the market was positive. Of the 2,860 stocks traded on the Bombay Stock Exchange (BSE0, 1,746 stocks advanced, 1,056 stocks declined and 59 stocks ended unchanged. Among the sectoral indices, the BSE Metal index jumped 5.09% at 17,731 followed by the BSE Realty index (up 3.94% at 10,626), the BSE IT index (up 2.74% at 4,198) and the BSE Oil & Gas index (up 2.62% at 12,360).

Most of the heavyweights ended at higher levels. On the Sensex, DLF shot up by 7.04% at Rs944, Reliance Energy soared 4.47% at Rs1,738, TCS surged 3.81% at Rs1,014, HDFC advanced by 3.59% at Rs2,785, Satyam Computer added 3.37% at Rs440, Tata Steel moved up 2.94% at Rs826, Bharti Airtel scaled up 2.60% at Rs939 and ONGC was up 2.59% at Rs1,171. Among the laggards, HLL dropped 1.45% at Rs207, while Ambuja Cement, Bajaj Auto and BHEL closed marginally lower.

Metal stocks were in the limelight and closed with strong gains. Sterlite Industries jumped by 12.58% at Rs1,035, Welspun Gujrat soared 9.18% at Rs419, Ispat Industries surged 6.63% at Rs51, Jindal Steel added 6.15% at Rs13,508, Sesa Goa gained 5.80% at Rs3,453 and JSW Steel advanced by 4.42% at Rs1,009.

Over 3.39 crore Ispat Industries shares changed hands on the BSE followed by Reliance Natural Resources (2.81 crore shares), Reliance Petroleum (2.59 crore shares), Essar Oil (2.08 crore shares) and IFCI (1.83 crore shares).

Reliance Petroleum clocked a turnover of Rs568 crore on the BSE followed by Essar Oil (Rs491 crore), Reliance Natural Resources (Rs459 crore), Mundra Port (Rs282 crore) and Reliance Energy (Rs218 crore).

Market posts decent gains in volatile week

The market posted decent gains in the week ended Friday, 30 November 2007 as buying momentum picked up in the later half of the week. However volatility was high due to alternate bouts of buying and selling by FII caused by redemption pressure in their home countries and fears of a US recession arising from US housing slump and credit crisis. The market advanced in three out of five trading sessions in the week.

 

The BSE Sensex rose 510.32 points or 2.70% to settle at 19,363.19 while the S&P CNX Nifty rose 154.15 points or 2.74% to 5762.75, in the week ended Friday, 30 November 2007.

 

Trading for the week started on strong note with the 30-share BSE Sensex surging 394.67 points to 19,247.54, on Monday, 26 November 2007 tracking firm global markets.

 

On Tuesday, 27 November 2007, the Sensex lost 119.81 points to 19127.73. Losses in the US markets on renewed worries over the fallout from the US subprime mortgage crisis dampened the sentiment

 

Selling continued on Wednesday, 28 November 2007 as BSE Sensex declined 188.86 points to 18,938.87. The market reversed early gains in the latter part of the day on unwinding of positions by traders ahead of expiry of derivatives contracts.

 

On Thursday, 29 November 2007, the market witnessed high volatility and came sharply off higher level in late trade due to expiry of November 2007 derivatives contracts. It however settled at 19,003.26, up 64.39 points for the day.

 

The 30-share BSE Sensex surged 359.93 points or 1.89% to 19,363.19 on Friday, 30 November 2007. Robust Q2 GDP growth data and healthy rollover of derivative contacts frm November 2007 series to December 2007 series aided the surge.

 

Reliance Industries (RIL) gained 1.40% to Rs 2850.75 in the week. The company sold 4.01% equity stake in its subsidiary Reliance Petroleum (RPL) by transactions through the stock exchanges. The aggregate sale consideration was Rs. 4,023 crore and post-sale RIL's stake in RPL has come down to 70.99% from 75%.

 

Tata Steel rose 0.63% to Rs 825.70 in the week. The company may reportedly pick up a 35% stake in its newly formed Mozambique joint venture for a consideration of Australian $100 million.

 

Reliance Communications slipped 1.05% to Rs 674.85 in the week. The company reportedly plans to sell another 5% stake in its wireless tower business in the second such transaction in this calendar year.

 

Reliance Energy gained 0.75% to Rs 1738.10 in the week. The company has entered into a joint venture with the country's main transmission utility Power Grid Corporation of India to execute about 300 kilometre (km) transmission lines from Parbati to Koldam and Koldam to Ludhiana.

 

DLF rose 8.66% to Rs 943.90 after the company said on Tuesday, 27 November 2007, it had partnered the founder of Aman Resorts for a stake in the luxury hotel chain. Aman Resorts is one of the world's leading hospitality and lifestyle business and currently owns and operates 22 luxury hotels, many with residences, in 12 countries.

 

IT stocks advanced as the Indian rupee weakened against the US dollar. TCS rose 5.62% to Rs 1013.95, Wipro gained 4.13% to Rs 460.30, Satyam Computers advanced 5.57% to Rs 439.95 while Infosys Technologies rose 2.96% to Rs 1604.45.

 

Infosys Technologies expects to maintain margins in coming quarters and the US subprime crisis had not hit IT spending by US clients, the company said on Thursday, 29 November 2007.

 

On 27 November 2007, Mundra Port and Special Economic Zone settled at Rs 961.70 on BSE, a premium of 118.56% over the IPO price of Rs 440.

 

As per data released on Friday, 30 November 2007, the gross domestic product (GDP) rose 8.9% in the second quarter ended 30 September 2007, which was below a robust 9.3% growth recorded in the first quarter ended June 2007.

 

The wholesale price index rose 3.21% in the 12 months to 17 November 2007, above the previous week's rise of 3.01%, government data released today, 30 November 2007 showed. The annual inflation rate was 5.56% during the corresponding week of the previous year.

 

FII outflow in the spot market in November 2007, till 28 November 2007, reached Rs 4872.30 crore. FIIs had made heavy purchases in September 2007 and October 2007. FIIs had bought shares worth a net Rs 16132.60 crore in September 2007 and Rs 20590.90 crore in October 2007

 

The National Stock Exchange (NSE) on 28 November 2007, said it has decided to add 15 stocks to futures & options (F&O) segment with effect from Friday, 30 November 2007. The 15 new inclusions for trading in F&O segment include Jindal Saw, KPIT Cummins Infosystems, Development Credit Bank, Hindustan Zinc, MICO, Info Edge, NIIT, Great Offshore, Wire & Wireless India, Redington (India), Network18 Fincap, Global Broadcast News, Ispat Industries, Hindustan Oil Exploration and Gitanjali Gems.

 

On Tuesday, 27 November 2007, Bombay Stock Exchange announced that it will shift 414 scrips from trade to trade to normal rolling settlement effective from Monday, 3 December 2007. Among the stocks being shifted back to normal rolling settlement from trade to trade include ABG Heavy Industries, Aksh Optifibre, Ambalal Sarabhai Enterprise, Andrew Yule & Company, Assam Company, Birla VXL, BPL, Cable Corporation of India, Dhanalakshmi Bank, Emkay Share & Stock Brokers, Jai Corp, Jhunjhunwala Vanaspati, L.M.L., Ramkrishna Forgings.

Sensex garners 360 points on hopes of Fed rate cut; metal, IT stocks rally

The market surged today led by rally in IT, banking, metal and realty stocks. Robust Q2 GDP growth data which was released by the government at about 11:00 IST today, boosted the market sentiment. Reliance Energy surged. The market breadth was strong. 26 out of 30 stocks from the Sensex pack were in green. European markets, which opened after Indian markets, were trading firm. Key Asian markets, except China, edged higher.

 

India's gross domestic product (GDP) rose 8.9% in the second quarter ended 30 September 2007, which was below a robust 9.3% growth recorded in the first quarter ended June 2007.

 

The wholesale price index rose 3.21% in the 12 months to 17 November 2007, above the previous week's rise of 3.01%, government data released today, 30 November 2007, afternoon showed. The annual inflation rate was 5.56% during the corresponding week of the previous year.

 

The 30-share BSE Sensex rose 359.93 points or 1.89% to 19,363.19. The Sensex hit a high of 19,424.99 in late trade. At day's high, the Sensex gained 421.73 points.

 

The broader based S&P CNX Nifty gained 128.15 points or 2.27% to 5762.75.

 

The BSE Mid-Cap index ended up 2.28% to 8,553.56. The BSE Small-Cap index ended up 1.31% to 10,526.02.

 

Market breadth was strong. 1745 stocks advanced, 1056 stocks declined and 59 stocks remained unchanged on BSE.

 

BSE clocked a turnover of Rs 8416 crore compared to Thursday (29 November 2007)'s Rs 7677 crore.

 

Nifty November 2007 futures were at 5791, a premium of 28.25 points as compared to spot closing of 5634.60.

 

NSE's futures & options (F&O) segment turnover was Rs 60313.99 crore, which was much lower than Rs 98225.56 crore on Thursday, 29 November 2007

 

India's largest private sector firm by market capitalisation and oil refiner Reliance Industries rose 1.15% to Rs 2850.75 on reports it plans to spend Rs 17000 crore on exploration in the next few years.

 

The BSE Bankex rose 2.54% to 10,870.88. Kotak Mahindra Bank surged 9.51% to Rs 1234, Bank of Baroda jumped 7.58% to Rs 381.90, Bank of India moved up 6.19% to Rs 350.70 and Union Bank (India) rose 4.39% to Rs 177.20.

 

India's largest private sector bank by assets ICICI Bank rose 1.53% to Rs 1177, off day's low of Rs 1192.

 

India's largest commercial bank State bank of India rose 1.34% to Rs 2300.30 after the union cabinet on Friday, 30 November 2007, approved enhancing the capital of the largest commercial bank by subscribing to its rights issue of equity shares worth Rs 10000 crore.

 

The BSE IT index rose 2.74% to 4,197.62. Financial Technologies jumped 4.97% to Rs 2447.20, TCS climbed up 3.81% to Rs 1013.95, Wipro gained 2.18% to Rs 460.30 and Satyam Computers gained 3.37% to Rs 439.95.

 

India's second largest software exporter by sales Infosys Technologies gained 2.19% to Rs 1604.95. The company expects to maintain margins in coming quarters and the US subprime crisis had not hit IT spending by US clients, T. V. Mohandas Pai, Infosys' director for human resources said on Thursday, 29 November 2007. He further said Infosys has successfully coped with the appreciation of the rupee against the dollar.

 

The BSE Metal index jumped 5.09% to 17,730.53. Copper makers surged after copper prices hit a two-week high on the London Metal Exchange on Thursday, 29 November 2007, on hopes that lower US interest rates would help boost economic growth as well as demand for industrial metals. Sterlite Industries surged 12.58% to Rs 1034.75, Hindalco gained 2.43% to Rs 182.45.

 

Sesa Goa gained 5.80% to Rs 3453.60, Jindal Stainless rose 3.25% to Rs 217.70, and Steel Authority of India (Sail) 3.19% to Rs 258.45.

 

India's largest steel firm by sales Tata Steel rose 2.94% to Rs 825.70 after the company said it has signed an agreement with Riversdale Mining to develop a hard coking and thermal coal project at key coal exploration tenements held by Riversdale in Mozambique.

 

The BSE Realty index moved up 3.94% to 10,626.31. DLF soared 7.04% to Rs 943.90, Phoenix Mills surged 10.71% to Rs 2516.60, Unitech gained 2.73% to Rs 382.60, and Puravankara Projects rose 3.80% to Rs 402.90.

 

Real estate developer Ansal Properties and Infrastructure jumped 4.12% to Rs 248.95 on reports that the company plans to foray into the field of bio-diesel.

 

Cement stocks were in demand. J K Cements soared 7.46% to Rs 234.80, JK Lakshmi Cements jumped 5.17% to Rs 196.45, Grasim Industries rose 2.59% to Rs 3792.35, ACC gained 1.87% to Rs 1089.45.

 

Among the public sector units, Shipping Corporation of India soared 10.70% to Rs 267.45, Neyveli Lignite surged 12.09% to Rs 235.55, MTNL jumped 6.59% to Rs 171.45, and Chennai Petroleum rose 6.45% to Rs 407.90.

 

India's largest cellular service provider by market share Bharti Airtel gained 2.60% to Rs 939.45.

 

India's second largest telecom service provider by sales Reliance Communications rose 1.47% to Rs 674.85 on reports that the company plans to place an order for 70 million GSM lines which could be valued at up to $5.6 billion. The order is likely to be placed sometime next year, the report added.

 

India's top tractor maker by sales Mahindra & Mahindra rose 1.60% to Rs 731.80, off day's low of 722.05.

 

India's largest listed airlines firm Jet Airways moved up 1.02% to Rs 830.75 on reports that the government has permitted the airline to fly to Barcelona, Paris, Manchester and Vienna under a code-share agreement with Brussels Airlines.

 

The UB Group firm United Breweries (Holdings) rose 3.83% to Rs 1163.35 on reports that the company's aviation vertical is likely to raise upwards of $200 million some time mid next year. It could be through a follow-on public offer, if Deccan-Kingfisher merger goes through, or convertible bonds or through private placement.

 

Anil Dhirubhai Ambani group firm Reliance Natural Resources jumped 9.76% to Rs 168.20 on huge volumes of 2.81 crore shares.

 

Mukesh Ambani-controlled Reliance Petroleum rose 1.26% to Rs 217.75 on volumes of 2.59 crore shares.

 

Engineering and construction firm Punj Lloyd jumped 7.36% to Rs 509.95 after the company said its subsidiary won a contract worth Rs 1270 crore for construction work in Singapore.

 

Abrasives maker Carborundum Universal moved up 6.93% to Rs 171.25 after said it sold off land and a manufacturing facility near southern city of Chennai for Rs 58 crore.

 

Software firm Parle Software was locked in upper limit of 10% at Rs 1,817 after its board recommended a three-for-one bonus share issue.

 

Reliance Petroleum clocked highest turnover of Rs 568.18 crore on BSE. Essar Oil (Rs 491.28 crore), Reliance Natural Resources (Rs 459.28 crore), Mundra Port & Special Economic Zone (Rs 282.85 crore) and Reliance Energy (Rs 218.14 crore), were the other turnover toppers on BSE in that order.

 

Ispat Industries registered highest volumes of 3.39 crore shares on BSE. Reliance Natural Resources (2.81 crore shares), Reliance Petroleum (2.59 crore shares), Essar Oil (2.08 crore shares) and IFCI (1.83 crore shares), were the other volume toppers on BSE in that order.

 

In Europe, key indices in UK, France and Germany were up between 0.82% to 1.25%.

 

Asian stocks extended gains on Friday, 30 November 2007, after comments on Thursday, 29 November 2007, by Federal Reserve Chairman Ben Bernanke reinforced expectations that the US central bank was willing to lower interest rates again at the 11 December 2007 meeting. Key benchmark indices in Hong Kong, Japan, South Korea, Singapore and Taiwan were up by between 0.57% to 1.65%. But China's Shanghai Composite index was down 2.63%.

 

US stocks ended nearly flat on Thursday, 29 November 2007 and the dollar stayed off its record lows against the euro.

 

Nifty futures saw a healthy rollover of 76% to December 2007 series from November 2007 series when the November 2007 derivatives contracts expired on Thursday, 29 November 2007. The overall rollover in the futures & options segment was about 72% to 75%.

RPL - who are the short sellers

The curious story of the Reliance Petroleum stock boils down to a single, unanswered question: Who are the players who began to short-sell the scrip in the derivatives segment just a few days before the company's promoters (Reliance Industries) started offloading a slice of their holding in the spot market?

 

These short-sellers in the futures and options market were either very brave — having the heart to take a big short call when spot prices were zooming — or they knew something that the rest of the market was clueless about.

 

These smart players went on a selling spree towards the end of October, selling shares to double the open interest position from 8 crore shares to 16 crores shares by November 6. Open interest of 16 crore shares simply means that if there was somebody who was buying contracts worth 16 crores shares, there was also somebody else who was selling as many.

 

Some of the reputed names in the market are believed to have suffered heavy losses by going short on the stock in the last couple of months when the stock was on a tear. So who are these short sellers who burst upon the scene suddenly?

 

For a stock whose average open interest position has been between 5 crore and 10 crore shares ever since it was listed in April '06, it must have required real conviction (or `knowledge') for someone to carry out an aggressive leveraged selling within the span of a week.

 

Open interest (triggered by such short-selling) peaked on the same day (i.e., November 6) when the promoters began selling the shares in the cash market. Between November 6 and November 23 — the period during which the promoters were selling the share — prices in the spot market plunged from Rs 267 to Rs 204, and those in the F&O segment fell from Rs 260 to Rs 204 (something that helped the short sellers make a pile).

 

On November 7, NSE banned the stock futures of RPL, making it the first stock among the 50 constituents of the Nifty Index to be put under F&O ban. In the seven-year history of derivatives in India, players could never muster the courage to sell so many shares of a blue-chip company that would cause the exchange to ban derivatives trading of the stock. Still, they chose to take on RPL.

 

But on Thursday, these operators chose to cover their positions with the RPL counter increasingly coming under the media glare. It is equally possible that some of the smart traders had sensed
their mood and also gone long on the stock.

 

Via Economic times

FIIs net sellers of Rs 1,113cr in cash market

Foreign institutional investors (FIIs) were net sellers of Rs 1,112.96 crore (provisional) today, according to data released by BSE.

 

While FIIs made gross purchases of Rs 5,155.11 crore, gross sales totalled Rs 6,268.07 crore.

 

Domestic institutional investors (DIIs) were net buyers of Rs 606.25 crore today. While DIIs made gross purchases of Rs 1,974.70 crore, gross sales totalled Rs 1,368.45 crore.

 

FIIs were net sellers of Rs 450 crore on Wednesday, November 28, according to data released by Sebi today. While FIIs made gross purchases of Rs 3,268.50 crore, gross sales totalled Rs 3,718.50 crore.

 

Mutual funds (MFs) were net buyers of Rs 57.10 crore on Wednesday. MFs made purchases of Rs 778.70 crore and sales of Rs 721.60 crore.