Post Session Commentary - March 13 2009

Indian market extended its gain to more than 4% to close the day on a strong note on significant buying over the ground led by strong cues from the markets all over the world. Stocks on the domestic bourses witnessed sharp rally along with its other Asian peers. Sentiments got a boost on further ease in inflation for the week ended 28th Feb 2009, to around 7 years low of 2.43%. Firm US index futures along with positive European markets also contributed to the northward journey.

The domestic market opened on the positive note on the back of firm global cues. US stock markets on Thursday ended higher on the back of better-than-expected retail sales data, renewed buying interest in bellwether General Electric and positive comments from Bank of America''s CEO about the bank''s profitability. Benchmark indices continued to extend their gains on strong buying across the board. The markets maintained its upbeat move on the back of strong global markets and sign of recovery in domestic economy. Auto sales went up in past few months and interest rates are dropped. Sustained upward movement stopped up only on the closing of trading. BSE Sensex ended above 8,700 mark and NSE Nifty above 2,700 level. From the sectoral front, all indices ended in green. Among those, Auto, Bank, Oil & Gas, Metal, IT, FMCG and Capital Goods stocks contributed mostly to the strong rally. BSE Mid Cap and Small Cap stocks were also on buyers' radar.

Among the Sensex pack 28 stocks ended in green territory and 8 in red. The market breadth indicating the overall health of the market remained strong as 1583 stocks closed in green while 854 stocks closed in red and 114 stocks remained unchanged in BSE.

The BSE Sensex closed higher by 412.86 points at 8,756.61 and NSE Nifty ended up by 101.80 points at 2,719.25. BSE Mid Caps and BSE Small Caps ended with gains of 75.96 points and 56.79 points at 2,640.36 and 2,934.06 respectively. The BSE Sensex touched intraday high of 8,793.21 and intraday low of 8,480.74.

Gainers from the BSE Sensex pack are DLF Ltd (11.47%), Tata Motors (10.72%), Tata Power (9.18%), ICICI Bank (8.60%), Hindalco (7.99%), Sterlite Industries (7.93%), HDFC (7.53%), Tata Steel (6.89%), L&T Ltd (6.76%), Reliance (6.69%) and TCS Ltd (6.57%).

Losers from the BSE Sensex pack are NTPC Ltd (2.04%) and Sun Pharma (0.36%).

On the global markets front the Asian markets which opened before the Indian market, ended higher on expectations of a fresh stimulus measures in China and Japan. Japan announced today that it was planning a new 100-trillion-yen ($1.03 trillion) economic stimulus package. Hang Seng, Nikkei 225, and Straits Times index ended higher by 524.27, 371.03 and 83.99 points at 12,525.88, 7,569.28 and 1,577.52 respectively. However, Shanghai Composite lost 5.03 points at 2,128.85

European markets which opened after the Indian market are trading in green tracking Wall Street gains overnight. Market is witnessing decent buying led by banks and oil producers leading a broad-based advance. In London FTSE 100 is trading higher by 66.92 points at 3,778.91 and in Frankfurt the DAX index is trading down by 41.44 points at 3,997.66.

The BSE Reality index outperformed the benchmark indices and ended up by (7.57%) or 99.15 points at 1,408.56 on hopes lower rates will spur housing demand. Gainers are DLF Ltd (11.47%), Akruti City (9.27%), Mahindra Life (8.16%), Housing Dev (6.48%) and Indiabull Real (5.67%).

The BSE Metal index gained (6.26%) or 286.07 points to close at 4,852.53. Main gainers are JSW Steel (9.55%), NALCO (8.22%), Welspan Guajrat Sr (8.12%), Hindalco (7.99%) and Sterlite Industries (7.93%).

The BSE Bank index closed with increase of (5.15%) or 219.63 points at 3,973.85 on hopes lower interest rates may boost lending growth. Scrips that gained are Axis Bank (8.61%), ICICI Bank (8.60%), Bank of Boroda (7.17%), Indian Overseas Bank (6.65%) and IDBI Bank (6.46%).

The BSE IT stocks also joined the rally as advanced by (5.63%) or 116.79 points to close at 2,190.32. Main gainers are NIIT Ltd (9.52%), HCL Tech (7.19%), Oracle Fin (6.97%), TCS Ltd (6.57%) and Infosys Tech (5.64%).

The BSE Oil & Gas index ended higher by (4.71%) or 273.88 points to close at 6,088.52 as crude oil prices surged 11% on the New York Mercantile Exchange on Thursday. Aban Offshore (10.79%), Reliance Natural Resources (7.33%), Reliance (6.69%), Reliance Pet (6.44%) and Cairn Ind (3.98%) ended in positive territory.

The BSE Teck index gained (4.48%) or 73.19 points at 1,707.31. Gainers are Jagran Prak (11.33%), Sun TVNet (9.56%), NIIT Ltd (9.52%), Tel Eighteen (9.35%) and Tata Comm (9.07%).

Tata Motors gained 10.72% as entered into an understanding with State Bank of Travancore for financing its range of passenger vehicles. The finance facility will be available at all branches of the bank and also at Tata Motors 470 sales touch points.

Dr. Reddy''s increased by 3.33%. The Pharma Company received favorable summary judgment ruling in the Omeprazole Mg OTC litigation. US District Court (Southern District, New York) has granted a summary judgment that the Omeprazole Mg OTC ANDA filed by Dr. Reddy''s does not infringe the patents in suit related to Astra Zeneca's Prilosec OTC.

Tata Communication ended higher by 9.07%. The company said on Thursday that it has raised $350 million in the form of debt and there is no liquidity problem in the company.

Reliance Industries Ltd advanced 6.69%, on reports the company has recommenced crude oil production from its predominantly gas-rich KG-D6 block.

Cairn India gained 3.98% to as crude oil prices surged 11% on the New York Mercantile Exchange on Thursday, 12 March 2009.

Wipro rose 5.87% after its unit won an outsourcing contract worth Rs. 1182.00 crore from an Indian government agency. The deal is for a period of six and half year.

Sun Pharma Industries lost 0.36% despite reports the company has secured US Food and Drug Administration (USFDA) approval to go ahead approval for anti-cancer injections.

FII activity, global equities hold key

Key benchmark indices may track movements in global equities and foreign institutional investor activity will be closely watched in a near term. Sings of recovery in the economy and expectations of further rate cuts by the central bank after recent sharp fall in inflation, may provide support to the markets.

A section of the market expects further rate cuts by the Reserve Bank of India. Foreign securities firm Nomura expects another 100 basis points cut in both the repo and reverse repo rates each from the Reserve Bank of India (RBI) by mid-2009. Inflation based on the wholesale price index (WPI) rose 2.43% in the year through 28 February 2009, much lower than previous week's 3.03% rise, data released by the government on, 12 March 2009, showed. It was the smallest annual rise in inflation since 8 June 2002 when inflation was at 2.18%. Its lowest ever was 1.13% on 2 February 2002.

The sharp fall in inflation over the past few months has provided room for the central bank to cut interest rates to protect the domestic economy from the negative impact of the global financial sector crisis and the recession in key global economies. The Reserve Bank of India (RBI) on 4 March 2009 cut the repo rate and reverse repo rate by 50 basis points each, with immediate effect. At that time, RBI said it will continue to maintain ample liquidity in the system. Repo rate is the rate at which RBI lends to commercial banks and reverse repo rate is the rate at which RBI accepts deposits from banks.

Meanwhile, there are signs that the stimulus packages announced by the government since December 2008 and an aggressive rate cuts announced by the central bank since October 2008 have started having some positive impact - lower interest rate have helped automobile sales rebound in the past few months. Interest rates have dropped drastically over the past few months.

A pick up the production of consumer goods and capital goods point to a rise in investment and consumption demand. Government data released during trading hours on Thursday, 12 March 2009, showed consumer durables output rose 2.5% in January 2009, moving into positive territory after three months of decline on the back of high growth in automobile sales. The capital goods sector saw strong growth, with output rising 15.4%, led by an impressive expansion in production of machinery and equipment. The pick up in production in these two segments also indicates that there is an improvement in the credit availability to the industry.

Further, a large government spending plan may help pump-prime the economy. The economy will also get another stimulus in the form of a huge spending by the political parties for the forthcoming Lok Sabha elections. As per reports, around Rs 6,000 crore would be pumped into the system as political parties and candidates splurge on their campaign and the Election Commission pays a huge bill for conducting the election. And the main beneficiary would be the services sector that often spurs growth.

Another plus point is that prospects look bright for the Rabi harvest in contrast to the previous kharif harvest which saw coarse grains recording lower output. Agriculture remains the mainstay of the economy and if rabi output increases as has been projected, rural demand may rise in the coming months, though perhaps not as much as had been hoped.

Meanwhile, the fourth tranche of advance tax payments of India Inc is due on 15 March 2009. Companies have to pay 25% of their annual tax bill in the March installment. Despite the economic slowdown, the income tax department expects advance tax collections to be marginally better than the collections in the third quarter. Corporate India had paid Rs 45400 crore as the third tranche of advance tax by 15 December 2008, much lower than the Rs 54900 crore companies shelled out in the third tranche a year before.

However, investor sentiment may remain edgy due to sustained selling by foreign funds. FII outflow in March 2009 totaled Rs 2276.20 crore (till 12 March 2009). FII outflow in calendar year 2009 totaled Rs 9217.20 crore (till 12 March 2009). Globally, investors are pulling out money from hedge funds, forcing hedge fund managers to dump assets.

Also due to political uncertainty, investors are unlikely to build large positions with general election to be held in mid-April 2008 to mid-May 2009. More so at a time when it is highly unlikely that either Congress or BJP comes to power on its own i.e. without the support of other smaller/regional parties.

The market may recover if a coalition led either by Congress or BJP comes to power. But the recovery will be subject to BJP or Congress led coalition coming to power without a support from the Left front which is against key economic reforms. The market will then look for whether the new government which comes to power undertakes second generation reforms that could bring India back on a strong growth path witnessed in five years between 2003 and 2008.

Market vaults on signs of economic recovery

Indian equities jumped in a truncated week on signs that the stimulus packages announced by the government since December 2008 and an aggressive rate cuts announced by the central bank since October 2008 have started having some positive impact - lower interest rate have helped automobile sales rebound in the past few months. Interest rates
have dropped drastically over the past few months. Expectations of further rate cuts by the central bank after recent sharp fall in inflation also aided the rally.

The market gained in 2 out of 3 trading sessions in the week. The market remained shut on Tuesday, 10 March 2009 for Id-E-Milad and Wednesday, 11 March 2009 for the Holi festival.

Auto sales rose 10.61% to 10.4 lakh units in February 2009 over February 2008, data released by Society of Indian Automobile Manufacturers (SIAM) on 9 March 2009, showed.

Inflation based on the wholesale price index (WPI) rose 2.43% in the year through 28 February 2009, much lower than previous week's 3.03% rise, data released by the government on 12 March 2009, showed. It was the smallest annual rise in inflation since 8 June 2002 when inflation was at 2.18%. Its lowest ever was 1.13% on 2 February 2002.

Recovery in global stocks also supported the market. Most Asian markets gained for a fourth day on Friday, 13 March 2009, helped by a smaller-than-expected decline in US retail sales and hopes that the largest US banks will survive without a government takeover.

The BSE 30-share Sensex rose 430.79 points or 5.17% to 8,756.61 in the week ended 13 March 2009. The S&P CNX Nifty gained 99.10 points or 3.78% to 2,719.25 in the week.

The Sensex is down 890.70 points or 9.23% in calendar 2009 from its close of 9,647.31 on 31 December 2008. The S&P CNX Nifty is down 239.90 points or 8.1% in calendar 2009 from its close of 2,959.15 on 31 December 2008.

The BSE Mid-Cap index gained 54.06 points or 2.09% to 2,640.36 and the BSE Small-Cap index was up 22.33 points or 0.77% to 2, 934.06 in the week.

The BSE Metal index (up 7.24%), the BSE Bankex (up 6.34%), the BSE Auto index (up 6.81%), the BSE IT index (up 5.69%) outperformed the Sensex.

The BSE Realty index (up 4.58%), the BSE Capital Goods index (up 4.09%), the BSE Power index (up 1.92%), the BSE FMCG index (up 1.6%) underperformed the Sensex.

Foreign institutional investors (FIIs) outflow in March 2009 totaled Rs 2276.20 crore (till 12 March 2009). FII outflow in calendar year 2009 totaled Rs 9217.20 crore (till 12 March 2009).

The BSE 30-share Sensex lost 165.42 points or 1.99%, to settle at 8,160.40 its lowest closing since 2 November 2005 on Monday, 9 March 2009 as subdued-to-weak trend in global markets, a dismal US job data, a weak rupee and concerns of sustained outflow by foreign funds weighed on the domestic bourses.

The Sensex jumped 183.35 points, or 2.25%, to 8,343.75 on Thursday, 12 March 2009. Expectations of further cut in policy rates by the central bank helped the market shrug off a weak data on industrial output. Easing inflation raised hopes for further monetary-policy easing. Sell-off in Bharti Airtel capped sharp gains in the key benchmark indices triggered by rally in battered index pivotals Reliance Industries and ICICI Bank.

Key benchmark indices surged on Friday, 13 March 2009 led by a rally in global equities. The BSE 30-share Sensex jumped 412.86 points or 4.95% to 8,756.61. Equities across the global rallied on speculation the worst might be over for the financial sector. Apart from strong global markets, signs of a recovery in the domestic economy, bolstered investor sentiment.

India's third largest IT exporter by sales Wipro jumped 5.32% to Rs 224.55 in the week. The firm announced on 12 March 2009 that its unit won an outsourcing contract worth Rs 1,182 crore from an Indian government agency.

India's largest electric equipment maker by sales Bharat Heavy Electricals rose 4.69% to Rs 1,374.10. The company on 9 March 2009 announced bagging an order worth Rs 81 crore.

India's largest copper maker by sales Sterlite Industries (India) jumped 13.18% to Rs 283. Foreign brokerage Credit Suisse retained its 'outperform' rating on stock with a target price of Rs 500.

Auto shares were in demand on reports that the Indian defence forces are planning to place immediate orders to buy vehicles to meet their requirements for two years. The major vehicle suppliers for the three defence forces - Mahindra and Mahindra (up 8.8% to Rs 344.80), Ashok Leyland (up 8.75% to Rs 17.40), Maruti Suzuki (up 9.74% to Rs 712.35) advanced.

India's largest commercial vehicle maker by sales Tata Motors surged 16.68% to Rs 161.60. The British government announced a monetary grant to its Jaguar Land Rover unit for producing a new eco-friendly car.

India's largest cellular services provider by market share Bharti Airtel tumbled 7.22% to Rs 558.70 after the telecom regulator announced a cut in a key expense item for network operators, pressuring firms to lower call tariffs. The Telecom Regulatory Authority of India (Trai) reduced termination charges on all domestic phone calls by 33% to 20 paise per minute from 30 paise per minute.

Another reason why Bharti Airtel slumped was news of its chief executive, Manoj Kohli, offloading his holding in the telecom firm through open-market transactions. Kohli, who owned 1,23,000 shares, sold 53,000 shares on 6 March and 70,000 shares on 9 March 2009.

After trading hours on 12 March 2009, Kohli, however, clarified that he sold the shares for personal reasons and that he continues to be the chief executive officer and joint managing director of the company. He further said he still held 1,80,000 options in the company.

India's largest IT exporter by sales Tata Consultancy Services (TCS) spurted 5.36% to Rs 506.55. The company on 10 March 2009 announced signing a multi-year IT solutions contract with German semiconductor maker Infineon Technologies AG.

India's largest bank in terms of assets and branch network State Bank of India rose 1.3% to Rs 953.05. The biggest domestic institutional investor Life Insurance Corporation of India hiked its stake in the state-run bank to 9.16% through open market purchases.

Reliance Industries (up 9.55% to Rs 1,282.35), Larsen & Toubro (up 6% to Rs 614.95), ICICI Bank (up 14.63% to Rs 308.70) and Infosys Technologies (up 6.33% to Rs 1,296.35), were among the major gainers in the week.

Industrial production declined for the second month in a row in January 2009, data released by the government on 12 March 2009, showed. Industrial production declined 0.5% in January 2009 compared to a revised 0.6% fall in December 2008. Manufacturing production fell 0.8% in January 2009 from a year earlier.

The market regulator Securities & Exchange Board of India (Sebi) on Thursday 12 March 2009 proposed relaxing the disclosure norms for rights issues to reduce overall cost of issuance. Rights issues are further issuance of capital made by listed entities to its existing shareholders.

Sebi said it may suffice to have a more restricted set of disclosures rather than exhaustive disclosure requirements about the rights issue and the entity. The argument is that the certain information about the entities that are listed and traded on the exchanges is already available in the public domain.

Sensex surges the most in 3 months

Key benchmark indices recorded their biggest rally in a single trading session in three months mirroring a rally in global markets and on signs of a recovery in the domestic economy. The BSE 30-share Sensex jumped 412.86 points, or 4.95%. The barometer index hit a 2-week high. Equities across the global rallied on speculation the worst might be over for the financial sector.

All the BSE sectoral indices logged gains. The market breadth was strong. BSE clocked a turnover of Rs 3,219 crore, higher than Rs 2,726.77 crore on Thursday, 12 March 2009.

The Income Tax department's optimism that the fourth tranche of advance tax payments of India Inc, due on 15 March 2009, will be healthier than the previous one, also lifted sentiment. Companies have to pay 25% of their annual tax bill in the March installment.

Despite the economic slowdown, the department expects advance tax collections to be marginally better than the collections in the third quarter. Corporate India had paid Rs 45400 crore as the third tranche of advance tax by 15 December 2008, much lower than the Rs 54900 crore companies shelled out in the third tranche a year before.

Indian equities rose for the second day in a row today on signs that the stimulus packages announced by the government since December 2008 and an aggressive rate cuts announced by the central bank since October 2008 have started having some positive impact - lower interest rate have helped automobile sales rebound in the past few months. Interest rates have dropped drastically over the past few months.

A pick up the production of consumer goods and capital goods point to a rise in investment and consumption demand. Government data released during trading hours on Thursday, 12 March 2009, showed consumer durables output rose 2.5% in January 2009, moving into positive territory after three months of decline on the back of high growth in automobile sales. The capital goods sector saw strong growth, with output rising 15.4%, led by an impressive expansion in production of machinery and equipment. The pick up in production in these two segments also indicates that there is an improvement in the credit availability to the industry.

Further, a large government spending plan may help pump-prime the economy. The economy will also get another stimulus in the form of a huge spending by the political parties for the forthcoming Lok Sabha elections. As per reports, around Rs 6,000 crore would be pumped into the system as political parties and candidates splurge on their campaign and the Election Commission pays a huge bill for conducting the election. And the main beneficiary would be the services sector that often spurs growth.

Another plus point is that prospects look bright for the Rabi harvest in contrast to the previous kharif harvest which saw coarse grains recording lower output. Agriculture remains the mainstay of the economy and if rabi output increases as has been projected, rural demand may rise in the coming months, though perhaps not as much as had been hoped.

A sharp slide in inflation over the past few months provides room for the central bank to cut policy rates further to shield the domestic economy from the negative impact of the global financial sector crisis and recession in key economies. The Reserve Bank of India (RBI) on 4 March 2009 cut the repo rate and reverse repo rate by 50 basis points each, with immediate effect. At that time, RBI said it will continue to maintain ample liquidity in the system.

According to a domestic brokerage, the latest RBI rate cut will set the ball rolling for lower interest rates in the economy and increase credit flow to individuals and the corporate sector. The latest rate cut brings the reverse repo to 3.5%, identical to the rate at which banks mobilize savings deposits. The lower repo rate in turn could dissuade banks from parking surplus funds with the RBI and increase lending, it notes in a recent report. Banks have been parking large sums of money with RBI through the repo window.

European markets advanced today, 13 March 2009 after signs of stabilisation in US consumer spending fuelled a sharp rise on Wall Street on Thursday. Key benchmark indices in UK, Germany and France were up by between 1.80% and 2.65%.

Most Asian markets gained for a fourth day on Friday, 13 March 2009 helped by a smaller-than-expected decline in US retail sales and hopes that the largest US banks will survive without a government takeover. Key benchmark indices in Hong Kong, Singapore and Taiwan were up by between 3% and 4.37%. South Korea's Seoul Composite fell 0.21% and China's Shanghai Composite index slipped 0.24%.

Japan's Nikkei 225 index jumped 5.15% on speculation the government will introduce additional stimulus measures to lift the sagging economy, which in the fourth quarter contracted at its sharpest rate in 35 years.

China, the engine of world growth in recent years, has rolled out a 4 trillion yuan ($585 billion) plan to expand and speed up government spending, and Premier Wen Jiabao today, 13 March 2009, said it was ready to do more.

Trading in US index futures indicated the Dow could rise 59 points at the opening bell on Friday, 13 March 2009. Earlier in the day, the Dow futures were in the red.

US stocks spurted on Thursday, 12 March 2009, on relief that a ratings cut by S&P in General Electric was just one notch and that no further cuts loomed, while retail sales data showed some stabilisation in consumer spending. The Dow Jones industrial average climbed 239.66 points, or 3.46%, to 7,170.06, the Standard & Poor's 500 Index jumped 29.38 points, or 4.07%, to 750.74 and the Nasdaq Composite index added 54.46 points, or 3.97%, to 1,426.10.

On Thursday, 12 March 2009 Bank of America followed Citigroup Inc. and JPMorgan Chase & Co in saying it was profitable in the first two months of 2009, easing concerns about the global credit crisis that has caused writedowns and losses at institutions worldwide to swell to more than $1.2 trillion. The comments from the banks triggered speculation the worst may be over for the financial sector. Massive losses at big banks tied to risky home loans triggered a dramatic seizure in credit markets that set off the worldwide recession.

The BSE 30-share Sensex jumped 412.86 points, or 4.95%, to 8,756.61, registering its biggest single day gain in percentage terms since 10 December 2008. Sensex opened 136.99 points higher at 8,480.74, which was also its low for the day. At the day's high of 8,793.21, the Sensex gained 449.46 points in late trade, its highest level since 27 February 2009.

The S&P CNX Nifty advanced 101.80 points, or 3.89%, to 2,719.25. Nifty March 2009 futures were at 2720.80, a premium of 1.55 points as compared to the spot closing. Turnover in NSE's futures & options (F&O) segment was Rs 47,689.67 crore lower than Rs 49,526.24 crore on Thursday, 12 March 2009.

The barometer index BSE Sensex had settled at its lowest level in more than three years on Monday, 9 March 2009. The Sensex is down 890.70 points or 9.23% in calendar 2009 from its close of 9,647.31 on 31 December 2008. The S&P CNX Nifty is down 239.90 points or 8.10% in calendar 2009 from its close of 2,959.15 on 31 December 2008.

The BSE Mid-Cap index (up 2.96%) and BSE Small-Cap index (up 1.97%), both underperformed the Sensex.

All sectoral indices on BSE logged gains. The BSE IT index (up 5.63%), the BSE Metal index (up 6.26%), the BSE Realty index (up 7.57%), and the BSE Bankex (up 5.85%), outperformed the Sensex.

The BSE Auto index (up 2.93%), the BSE FMCG index (up 2.20%), the BSE Oil & Gas index (up 4.71%), BSE Capital Goods index (up 4.07%), the BSE Consumer Durables index (up 1.87%), the BSE Power index (up 2.76%), the BSE PSU index (up 1.74%), the BSE Healthcare index (up 0.57%), the BSE TECk index (up 4.48%), underperfomed the Sensex

The market breadth, indicating the overall health of the market, was strong on BSE with 1586 shares advancing as compared with 865 that declined. A total of 105 shares remained unchanged.

The National Stock Exchange had earlier said that trading would continue in the normal course from 5 March 2009 to 19 March 2009 despite Sun Outage between 11:45 IST to 12:25 IST. The exchange has advised members to use alternative mode of connectivity instead of VSAT during the above mentioned period for continuing trading without any disruptions on account of Sun outage.

Earlier on 25 February 2009, the Indian Space Research Organization (ISRO) had informed the NSE that there would be Sun Outage from 5 March 2009 to 19 March 2009 between 11:45 IST to 12:25 IST due to which trading members may face connectivity problems at different times on different dates based on geographical location during this period.

NTPC was the lone loser from the 30-member Sensex pack. India's largest power generation firm by sales lost 1.96% to Rs 170.35. Reportedly, the Power Ministry will take up the issues of the company with other ministries, such as Shipping and Railways, to expedite the delivery of fuel to the PSU, which is reeling under coal shortage.

Meanwhile state-run hydro power producer NHPC today, 13 March 2009, said it would come out with its initial public offer only after the market conditions improve. The company had proposed to come out with a public issue in October 2008 to partially fund expansion programmes, but it was forced to shelve plans due to volatile market conditions.

India's largest private sector company by market capitalization and oil refiner Reliance Industries (RIL) shot up 7.66% to Rs 1294, extending yesterday's (12 March 2009) 4.22% surge on reports the company has resumed crude oil production from its predominantly gas-rich KG-D6 block after a three-month shutdown, which was forced by an equipment failure. RIL is the operator with a 90% stake in the 7,645 square kilometre D6 block, off the Andhra coast. Niko Resources of Canada holds the remaining 10% interest.

India's largest state-run oil exploration firm by sales ONGC gained 3.36% and India's largest private sector oil exploration firm by sales Cairn India rose 3.98% as crude oil prices surged 11% on the New York Mercantile Exchange on Thursday, 12 March 2009. Rise in crude oil prices would result in higher realizations from crude sales for the oil exploration firm.

However, shares of state-run oil marketing firms on a surge in crude oil prices and on concerns arising from a weak rupee. HPCL (down 3.75%), BPCL (down 2.73%), and Indian Oil Corporation (IOC) (down 0.69%) slipped.

Oil marketing firms suffer under-recovery on domestic sale of petrol, diesel, LPG and kerosene at a controlled price. Further, the recent sharp slide in the rupee against the dollar will raise cost of crude imports of oil refiners unless they undertake effective hedging strategies. Oil firms rely substantially on import of crude oil.

US light, sweet crude for April 2009 delivery surged 11.1% or $4.70 to 47.03 a barrel on the New York Mercantile Exchange on Thursday, 12 March 2009, rebounding from heavy losses in the previous session, as traders weighed a potential output cut when the Organization of Petroleum Exporting Countries (Opec) meets on Sunday, 15 March 2009.

Realty shares gained on hopes lower rates will spur housing demand. India's largest real estate developer by sales DLF galloped 12.02% to Rs 153.30 on 62.03 lakh shares It was the top gainer from the Sensex pack.

Indiabulls Real Estate (up 5.72%), Akruti City (up 10.22%), HDIL (up 6.26%), and Unitech (up 4.79%), surged. Most of the realty deals including sale of commercial property and housing sales are driven by finance.

Banking shares gained on hopes lower interest rates may boost lending growth and on rally in American depository receipt (ADRs) on Thursday, 12 March 2009.

India's largest private sector bank by net profit ICICI Bank vaulted 9.73% to Rs 311.90, extending yesterday's (12 March 2009) 8.06% surge, after its ADR surged 4.26% on Thursday, 12 March 2009. The counter saw high volumes of 64.63 lakh shares.

India's second largest private sector bank by operating income HDFC Bank advanced 4.43% to Rs 835 after its ADR rose 2.27% on Thursday, 12 March 2009.

India's largest bank in terms of assets and branch network State Bank of India (SBI) gained 4.82% to Rs 954.80. State-run Life Insurance Corporation of India during market hours today said it has raised its stake in SBI by 2.12% to 9.16% through market purchases. LIC bought 13.46 million shares between mid November 2008 and early March 2009, the filing showed.

Auto shares were in demand on reports that the Indian defence forces are planning to place immediate orders to buy vehicles to meet their requirements for two years. The major vehicle suppliers for the three defence forces - Mahindra and Mahindra (up 4.68%), Ashok Leyland (up 5.12%), Maruti Suzuki (up 2.37%) and Tata Motors (up 11.17%) advanced.

According to a report, if the government approves the plan, the auto sector is expected to get Rs 3,000 crore to Rs 4,000 crore worth of orders that will be spread over the next two quarters.

Metal shares gained on positive news from China, the world's largest consumer of a number of commodities. India's top copper maker by sales Sterlite Industries India vaulted 7.17% to Rs 281 after foreign brokerage Credit Suisse retained its 'outperform' rating on stock with a target price of Rs 500.

On 7 March 2009, the company announced that it will pay $1.7 billion in cash and notes to buy bankrupt US copper miner Asarco LLC, lower than the $2.6 billion it offered last year.

Steel Authority of India (up 6.01%), Hindalco Industries (up 8.88%), National Aluminium Company (up 8.98%), Sesa Goa (up 5.54%), Tata Steel (up 6.48%), Hindustan Zinc (up 6.47%), and JSW Steel (up 9.97%), soared.

Prices of metals rose in the commodities market on comments from Chinese Premier Wen Jiabao, who said 595 billion yuan had been allocated in this year's budget for stimulus moves and the country could issue new measures if needed.

Outsourcing focussed IT firms gained as higher ADRs offset a firm rupee. India's largest software services exporter by sales TCS rose 6.94%. The company before market hours on Thursday, 12 March 2009, said it signed a multi-year IT solutions contract with German semiconductor maker Infineon Technologies AG, one of the leading semiconductor manufacturers. The financial details were not disclosed.

India's second largest software services exporter Infosys Technologies advanced 5.86% on the back of 3.67% rise in its ADR on Thursday, 12 March 2009. India's fifth largest IT major by sales HCL Technologies gained 7.58%.

India's third largest software services exporter, Wipro galloped 6.27% after its unit Wipro Infotech won an outsourcing contract worth Rs 1,182 crore from the Employees State Insurance Corporation (ESIC). Its ADR jumped 4.84% on Thursday, 12 March 2009.

However Satyam Computer Services fell 4.03%. Larsen & Toubro (L&T), Spice group and Tech Mahindra among the bidders who have completed the first step of registration to acquire the troubled Satyam Computer Services, whereas the Hinduja group is not participating in the race.

The Indian rupee was firm today, 13 March 2009 as dollar weakened against other currencies and on expectations of capital inflows in domestic stock market. The partially convertible rupee was at 51.55 per dollar as compared to its previous close of 51.88. A stronger rupee negatively impacts operating margins of IT firms as they earn a lion's share of revenues from exports.

India's largest engineering and construction by sales Larsen & Toubro (L&T) advanced 7.20% to Rs 617.50 on recent reports Oman has shortlisted six firms including Larsen & Toubro, to build a $1.4 billion airport terminal. The lowest bidder is a consortium of the local NRI-owned Galfar Engineering & Contracting Company and L&T, the Middle East Economic Digest (MEED) reported last week.

Meanwhile, L&T has registered interest to participate in the bidding process for Satyam Computer Services, its spokesman said on Thursday, 12 March 2009. L&T is the single largest shareholder in Satyam with a 12% stake.

Capital goods shares gained for a second running on steady progress to the landmark India-US civil nuclear deal. Areva T&D (up 1.09%), Siemens (up 6.43%), Gammon India (up 1.53%), and Punj Lloyd (up 4.41%), gained.

India's largest power equipment maker by sales Bharat Heavy Electricals (Bhel) gained 2.10% to Rs 1370.55. The company may reportedly join the consortium of French nuclear technology provider Areva and Bharat Forge for its proposed nuclear forging business.

Emco jumped 8.06% to Rs 28.15 on bagging orders worth Rs 550 crore. The company announced the new orders after trading hours on Thursday, 12 March 2009.

India's Foreign Secretary Shivshankar Menon, who discussed the nuclear deal with both Secretary of State Hillary Clinton and his counterpart Under Secretary for Political Affairs William Burns, said on Thursday 12 March 2009 the deal is on track with both sides determined to go forward with an initiative. Noting that deal had already been signed in 2008, Menon said now its a question of operationalisation and bringing it down to the commercial level. For that India had already signed an additional protocol with the International Atomic Energy Agency (IAEA).

India's largest pharma company by market capitalisation Sun Pharma Industries gained 0.93% to Rs 1035 on reports the company has secured US Food and Drug Administration (USFDA) approval to market anti-cancer injections.

Dr Reddy's Laboratories surged 3.18% to Rs 412 after the company said it received a favorable summary judgment from a US district court on patent infringement litigation for a drug. The company made this announcement after trading hours on Thursday, 12 March 2009

India's largest pharma company by sales Ranbaxy Laboratories spurted 3.01% to Rs 138.50. On 9 March 2009, the company received the final approval from the US Food and Drug Administration's (USFDA) to sell Ramipril capsules, a drug used to used treat cardiovascular diseases.

However India's third largest pharma company by sales Cipla shed 0.27% to Rs 203.20 after a block deal of 3.88 lakh shares was executed on NSE at Rs 205 per share. The block deal constituted 0.05% of the company's equity.

Strides Arcolab soared 8.23% to Rs 71 after the firm ended a pact with a US drug firm, which faced lawsuits in the United States. The company made the announcement during market hours today, 13 March 2009.

Shares of India's largest cellular services provider by sales Bharti Airtel rose 1.82% to Rs 560.30, off day's low of Rs 545.30. Concerns that large operators like the company and unlisted Vodafone will likely get hurt from the cut in domestic termination charges as they are the net collectors of termination fees, had triggered a 6.69% fall on the counter yesterday, 12 March 2009.

Another reason why Bharti Airtel slumped on Thursday, 12 March 2009 was news of its chief executive, Manoj Kohli, offloading his holding in the telecom firm through open-market transactions. Kohli, who owned 1,23,000 shares, sold 53,000 shares on 6 March and 70,000 shares on 9 March 2009.

After trading hours on 12 March 2009, Kohli, however, clarified that he sold the shares for personal reasons and that he continues to be the chief executive officer and joint managing director of the company. He further said he still held 1,80,000 options in the company.

Media shares sizzled on hopes the forthcoming Indian Premier League (IPL) - the domestic cricket series and Lok Sabha elections - will result in a substantial business to the Indian advertising, media and entertainment industry.

Zee Entertainment (up 3.92%), TV 18 (up 10.37%), NDTV (up 8.26%), Sun TV (up 10.99%), Adlabs Films (up 5.02%), and Bag Films (up 1.01%) gained.

Tea shares gained on reports prices are expected to rise 15-20% in 2009/10 due to weather problems in India and a crop shortage in Kenya.

McLeod Russel India (up 5.17%), Jayshree Tea (up 3.26%), Asian Tea (up 5.70%), Assam Company (up 7.69%), Harrisons Malayalam (up 3.78%), Goodricke Group (up 8.28%), and Warren Tea (up 5.30%), gained.

The absence of the light February 2009 and March 2009 showers in Assam and South India will hurt the output and prices will also get support from the Kenyan crop shortfall, Aditya Khaitan, the Chairman of Indian Tea Association, said in a interview to a news agency.

ICICI Bank topped the turnover chart on BSE with a turnover of Rs 253.54 crore followed by Akruti City (Rs 192.75 crore), Reliance Industries (Rs 180.70 crore), Educomp Solutions (Rs 168.85 crore) and Bharti Airtel (Rs 122.28 crore).

Satyam Computer Services led the volume chart on BSE clocking volumes of 2.38 crore shares followed by Cals Refineries (87 lakh), ICICI Bank (82.90 lakh), Unitech (73.85 lakh) and Suzlon Energy (67.45 lakh).

Sintex Industries surged 21.06% to Rs 86.80 on value buying after the stock fell 23.72% in five consecutive sessions from a recent high of Rs 94 on 26 February 2009. The stock fell 37.18% in past one month till 12 March 2009.

Pantaloon Retail (India) jumped 5.49% to Rs 122 on reports the company is demerging some businesses to unlock value and is likely to go for a preferential allotment of equity to fund expansion.

DCM rose 0.69% on increase in promoters' stake in the firm. The company made the announcement about the hike in promoter holding during trading hours today, 13 March 2009.

MVL declined 4.94% after the company said its promoters have pledged more than 24.77 lakh shares or 4.69% of the equity capital of the company. The company made this announcement after trading hours on Thursday, 12 March 2009.

Meanwhile, the stock market regulator Securities and Exchange Board of India (Sebi) on Thursday, 12 March 2009, proposed relaxing the disclosure norms for rights issues to help shareholders retain their stake and reduce overall cost of issuance.

Rights issues are further issuance of capital made by listed entities to its existing shareholders and so certain information about the entities that are listed and traded on the exchanges is available in the public domain, Sebi said in a discussion paper while making a case for less disclosures for rights issues.

Pre Session Commentary - March 13 2009

Today domestic markets are likely to open positive as the US markets closed with phenomenal gains and the other Asian markets have also opened with green numbers. The sentiments are strong on the global front as such one could witness similar trend on the domestic front also. There is no specific news to support the market sentiments therefore there would be some room for profit booking that may lead to mild volatility.

On Thursday, the domestic markets opened with a positive gap to catch up with the global markets that had surged on the Tuesday and Wednesday. Phenomenal buying was witnessed across frontline stocks. Though there was little profit booking pressures in the morning session, but the buying strength helped maintain the northward movement. The IIP data for the January month recorded a contraction of 0.5% as against 2% contraction in the month of December. The inflation on the other hand recorded at 2.43% for the week ended Feb 28. Investors were well aware of the IIP contraction and therefore no turbulence was seen during the day's trade. Sectors like Auto, Bankex, Oil & Gas and Metal gained phenomenally by 3.70%, 3.33%, 3.21% and 2.87% respectively. Whereas CD and Teck were the only sectors that conceded losses of 1.30% and 0.09% respectively. During the session we expect the markets to be trading positive.

The BSE Sensex closed high by 183.35 points at 8,343.75 and NSE Nifty gained by 44.30 points at 2,617.45. The BSE Small cap and Mid Cap closed with gains of 10.91 points and 10.59 points at 2,564.40 and 2,877.27 respectively. The BSE Sensex touched intraday high of 8,439.71 and intraday low of 8,274.78.

On Thursday, the US stock markets closed with remarkable gains. The phenomenal surge in the markets was inspired by better than expected retail sales data, renewed buying interest in bellwether General Electric, and more encouraging news from the financial sector. February retail sales declined just 0.1%, which is better than the 0.5% decline that was expected. Excluding autos, retail sales increased 0.7%. A decline of 0.1% was expected. Meanwhile, January total sales and sales less autos were revised to show an even larger increase. Weekly initial claims climbed 9,000 to 654,000, which was worse than expected. Continuing claims jumped nearly 200,000 to 5.32 million, which was also worse than expected. US light crude oil for April delivery grew by $4.70 to settle at $45.27 a barrel on the New York Mercantile Exchange. The crude oil prices surged ahead of the OPEC meeting this weekend to consider a fourth production cut.

The Dow Jones Industrial Average (DJIA) inclined by 239.66 points to close at 7,170.06 The NASDAQ Composite (RIXF) index grew by 54.46 points to close at 1,426.10 and the S&P 500 (SPX) grew by 29.38 points to close at 750.74.

Today major stock markets in Asia are trading positive. Shanghai composite is up by 13.20 points to 2,147.08 along with Hang Seng that is trading higher by 471.88 points at 12,473.41 and South Korea''s Seoul Composite is up by 5.07 points at 1,133.46. Japan''s Nikkei is also high by 354.90 points at 7,553.15 and Singapore''s Straits Times is high by 52.63 points at 1,546.16.

Indian ADRs closed up. In technology sector, Satyam ended higher by 0.56% along with Infosys by 3.67%. Further, Patni Computers gained 7.39 and Wipro closed up by 4.84%. In banking sector ICICI Bank and HDFC Bank gained 4.26% and 2.27% respectively. In telecommunication sector, MTNL dropped by 2.46% while Tata Communication advanced by 2.55%. Further, Sterlite Industries increased by 3.78%.

The FIIs on Thursday stood as net buyers in equity and net sellers in debt. Gross equity purchased stood at Rs 1,028.40 Crore and gross debt purchased stood at Rs 130.30 Crore, while the gross equity sold stood at Rs 1,016.40 Crore and gross debt sold stood at Rs. 571.70 Crore. Therefore, the net investment of equity and debt reported were Rs 12 Crore and Rs (441.40) Crore respectively.

On Thursday, the Indian rupee closed at 51.88/89, 0.03 paise weaker than its previous close of 51.85/87. The gain in the stock markets kept the rupee firm.

On BSE, total number of shares traded were 23.72 Crore and total turnover stood at Rs 2,726.77 Crore. On NSE, total number of shares traded were 50.87 Crore and total turnover was Rs 8,353.43 Crore.

Top traded volumes on NSE Nifty – ICICI Bank with 27371681, Suzlon Energy with 20824838 shares, Unitech with 15143785 shares, Bharti Airtel with 14874877 shares followed by Reliance Comm with 9316917 shares.

On NSE Future and Options, total number of contracts traded in index futures was 1049444 with a total turnover of Rs 13,098.44 Crore. Along with this total number of contracts traded in stock futures were 420857 with a total turnover of Rs 10,639.76 Crore. Total numbers of contracts for index options were 1863364 with a total turnover of Rs 24,621.59 Crore and total numbers of contracts for stock options were 41948 and notional turnover was Rs 1,166.44 Crore.

Today, Nifty would have a support at 2,639 and resistance at 2,674 and BSE Sensex has support at 8,396 and resistance at 8,528.