The key benchmark indices edged lower on the last day of the financial year 2010, extending losses for the second straight day as Asian stocks and US index futures fell. Nevertheless, the market logged huge gains in the year ended March 2010 (FY 2010). The BSE 30-share Sensex fell 62.40 points or 0.35%, off close to 170 points from the day's high and up close to 40 points from the day's low. The Sensex rose 62.96 points or 0.36% in the quarter ended March 2010, gaining for the fifth quarter in a row. The barometer index vaulted 7,819.27 points or 80.5% in FY 2010.
In today's trade, FMCG and IT stocks fell. Index heavyweight Reliance Industries (RIL), too, edged lower. But the market breadth, indicating the overall health of the market was positive.
The market was volatile on the last day of the fourth quarter and the financial year. Stocks surged in early trade, shrugging off weak Asian stocks. The market pared gains in morning trade. Stocks slipped into the red in mid-morning trade. The market came off the day's low in early afternoon trade. The market regained positive zone in afternoon trade as European stocks edged higher. The market once again slipped into the red in mid-afternoon trade. The market cut losses after hitting a fresh intraday low.
NSE's volatility index, India VIX, rose 0.35% to 19.87. The index had risen sharply in the preceding three trading sessions. India VIX is a measure of the market's expectation of volatility over the next 30 calendar days. The lower the index, which is based the S&P CNX Nifty option prices, the higher the market's desire to take risk.
Industrial output in February is expected to have grown 16% year-on-year, Industry Secretary said on Wednesday. The output in January grew an annual 16.7%.
Foreign direct investment rose 15.4% to $1.72 billion in February 2010 over February 2009, government said today.
Exports in February grew 34.8% on year to $16.09 billion, Trade Minister Anand Sharma said on Wednesday. Exports are expected to grow 15-20% in the year that starts on 1 April 2010, Sharma said
Foreign institutional investors have made heavy purchases of Indian stocks in the past few weeks helping stocks register strong gains this month. The Sensex had jumped 1,457.15 points or 8.96% to a 2-year closing high of 17711.35 on Monday, 29 March 2010, from a low of 16,254.20 on 25 February 2010. As per data from the stock exchanges, foreign institutional investors (FIIs) bought stocks worth a net Rs 14,358.81 crore this month, till 30 March 2010. Finance secretary Ashok Chawla said on Tuesday, 23 March 2010, that foreign capital flows into India are currently not posing any concern.
Meanwhile, stock brokers have advised investors not to sell shares bought today, 31 March 2010, the next day i.e. on Thursday, 1 April 2010, due to clubbing of settlement by the stock exchanges. There will be no settlement of shares/funds on 1 April 2010 due to annual closing of books of accounts of commercial banks. The current financial year ends today, 31 March 2010.
Traders may refrain from building large positions ahead of a long weekend. The stock market remains closed on Friday, 2 April 2010, on account of Good Friday.
Encouraging Q4 March 2010 advance tax figures of top Indian firms, indicating good Q4 March 2010 results, boosted Indian equities over the past few days. The market also witnessed a strong post-Budget rally driven by sustained buying by foreign funds since the presentation of the Union Budget 2010-2011 on 26 February 2010. Global credit rating agency Standard & Poor's recently revised the outlook on India to stable from negative due to improved government finances.
The stock market gave a thumbs up to the Union Budget 2010-2011 due to its thrust on infrastructure development, government's pledge to reduce fiscal deficit over the next three years, a smaller-than-expected 2% hike in excise duties, and reduction in taxes for individuals which will boost disposable income. The Finance Minister has assumed GDP growth of about 8% and inflation of about 4.5% for 2010-2011.
The forecast for the southwest monsoon for 2010 is the next major trigger for the market. Good rains this year after last year's drought will boost farm output and rural incomes. But another monsoon failure will add to inflationary pressure which in turn may hamper the current strong economic rebound.
Tokyo-based Research Institute for Global Change has predicted normal monsoon rains in India for the current year. Agriculture secretary Prabeer Kumar Basu had also told media in Delhi last week that the monsoon rains for the year will be normal. The Indian Meteorological Department (IMD) issues a monsoon forecast, usually in the second half of April after considering weather observations in different parts of the world and extrapolating statistical data.
A weakening El Nino is a positive sign for the monsoon, Ajit Tyagi, director general at the India Meteorological Department, said on 18 March 2010. The cyclical heating of the Pacific Ocean known as El Nino will continue to fade, US forecasters said this month. The weather event, which occurs every four to seven years, brings more rain to South America and less precipitation to Asia.
The headline inflation was near 10% in February, prompting the RBI to unexpectedly raise its key lending and borrowing rates by 25 basis points each on 19 March 2010. The Reserve Bank has said it is imperative to anchor inflationary expectations and analysts have forecast another rate hike during the policy review on 20 April 2010.
The government will sell 63% of its bond issuance for the new fiscal year in the first half, slightly less than expected, giving a near-term respite to satiated bondholders and helping send yields sharply lower. The government on Monday said it will sell Rs 2.87 lakh crore ($64 billion) of bonds in the first half of 2010/11, which starts on 1 April 2010. The bulk of the government's first-half borrowing, or Rs 2 lakh crore, will be in the 10-year and longer segment.
European stocks were slightly higher on Wednesday, as steady oil prices boosted energy stocks, eclipsing a dip in heavyweight mining shares. The key benchmark indices in France, Germany rose by between 0.03% to 0.12%. But, UK's FTSE100 fell 0.02%,
Germany's jobless total fell by a seasonally-adjusted 31,000 in March, the Federal Labor Office reported Wednesday. On an unadjusted basis, the total fell by 75,000 to 3.568 million. Economists had expected the adjusted figure to rise by around 10,000.
Most Asian stocks declined on Wednesday amid concerns a rally that took the MSCI Asia Pacific Index to a 10- week high yesterday had overvalued earnings prospects. The key benchmark indices in China, Taiwan, Indonesia, Hong Kong, Japan South Korea and Singapore were down by between 0.06% to 1.57%.
Trading in US index futures indicated that the Dow could fall 15 points at the opening bell on Wednesday, 31 March 2010.
US stocks rose in a slow session on Tuesday on data showing more stabilization in the economy, while Apple Inc rallied on a report that it was developing a new iPhone. The Dow Jones Industrial Average rose 11.56 points, or 0.11%, to end at 10,907.42. The Nasdaq Composite Index gained 6.33 points, or 0.26%, to close at 2,410.69. The Standard & Poor's 500 Index was flat at 1,173.27.
The economic news in US was positive. US consumers gained confidence in March as the gloom over job prospects began to lift, indicating employment will be central to preserving the recent acceleration in spending. The Conference Board's confidence index rose to 52.5, exceeding the median forecast.
Home prices unexpectedly rose in January for an eighth month, another data showed. Home prices in 20 US cities rose 0.3% in January, indicating the housing market is stabilizing as the economy expands. The S&P/Case-Shiller home-price index climbed from the prior month on a seasonally adjusted basis after a similar gain in December.
The ADP Employment report for March 2010, due later in the global day today is likely to be keenly eyed ahead of the all-important US March non-farm payrolls numbers to be released on Friday, 2 April 2010. The ADP report is expected to show the private sector created 40,000 jobs in March as the world's largest economy emerges from recession. The government's non-farms payroll data is expected to show that the US economy added some 200,000-odd jobs in March, the largest gain since the recession.
Key Group of 20 leaders and the International Monetary Fund urged governments on Tuesday to redouble efforts in tightening up financial rules as some countries lag in curbing bank pay.
Closer home, the BSE 30-share Sensex fell 62.40 points or 0.35% to 17,527.77. The barometer fell 101.62 points at the day's low of 17,488.55 in late trade. At the day's high of 17699.50, the Sensex rose 109.33 points in early trade.
The S&P CNX Nifty was down 13.35 points or 0.25% to 5,249.10.
The BSE Mid-Cap index rose 0.25% and the BSE Small-Cap index rose 0.49%. Both the indices outperformed the Sensex.
Most sectoral indices on BSE edged lower. The BSE HealthCare index (up 0.74%), Power index (up 0.29%), PSU index (up 0.21%), Auto index (up 0.15%), Realty index (up 0.08%), Metal index (down 0.03%), Bankex (down 0.11%), outperformed the Sensex.
The BSE FMCG index (down 1.36%), BSE IT index (down 1.18%), BSE Teck index (down 0.76%), Consumer Durables index (down 0.64%), Oil & Gas index (down 0.49%), Capital Goods index (down 0.4%), underperformed the Sensex.
The market breadth, indicating overall health of the market was strong. On BSE, 1578 shares advanced as compared with 1188 that declined. A total of 106 shares remained unchanged.
BSE clocked a turnover of Rs 3855 crore, lower than Rs 4638.33 crore on Tuesday, 30 March 2010.
From the 30 Sensex shares, 13 stocks rose and the rest fell.
Index heavyweight Reliance Industries (RIL) fell 1.21% to Rs 1074.65, on profit taking after recent strong gains. The stock was volatile. It hit a high of Rs 1094 and a low of Rs 1072.50. As per the market buzz, RIL's Q4 advance tax surged to Rs 770 crore in Q4 March 2010 from Rs 365 crore a year ago. Reliance Industries on 14 March 2010 announced a sports and entertainment joint venture with IMG Worldwide, a global leader in sports marketing and management. The equal venture, IMG Reliance, will set up modern infrastructure and coaching facilities for sports and create and operate sports and entertainment assets including celebrity management.
PSU OMCs fell on higher crude oil prices. Indian Oil Corporation and BPCL fell by between 0.96% to 1.2%. But, HPCL rose 0.49%. Sudhir Bhargava, additional secretary in the oil ministry said the government will raise the prices of petrol by 1.1% from Thursday in major cities that will migrate to Euro IV-compliant fuel, to help oil firms recover investment made for plant upgrade. Diesel price in leading cities including Mumbai would be hiked by Rs 0.26 a litre, while in Delhi it will rise by more than Rs 2 because of taxes.
IT stocks extended recent losses triggered by a recent rally of the rupee against the dollar. India's largest software services exporter by sales Tata Consultancy Services (TCS) fell 2.49%, extending preceding three days' losses. The company said recently it signed a five year contract with Malaysia Airlines for providing end-to-end information technology infrastructure services.
India's second largest software services exporter by sales Infosys fell 1.09%, extending preceding three days' losses . Infosys' fourth quarter advance tax payment doubled. Its ADR fell 0.95% on Tuesday. But, India's third largest software services exporter by sales Wipro rose 0.63%. Its ADR rose 0.3% on Tuesday.
The rupee was wedged in a tight band on Wednesday as demand for the US unit from oil refiners. The partially convertible rupee was at 44.95/96 per dollar, higher than 45.08/09 at close on Tuesday when it high 44.88 during trade, its strongest since 10 September 2008. A firm rupee adversely affects operating profit margin of IT firms as the sector derives a lion's share of revenue from exports.
India's largest FMCG maker by sales Hindustan Unilever fell 0.85% on profit taking after gaining in the preceding two days after the company sold remaining 49% in Capgemini Business Services (India) to Cap Gemini S.A.
Among other FMCG stocks, Marico, United Spirits Dabur India Tata Tea, Nestle India fell by between 0.18% to 1.57%.
India's largest cigarette maker by sales ITC fell 2.14%. The $6-billion cigarettes-to-hotels conglomerate has teamed up with La Aurora, one of the oldest cigar makers run by the Leon Jimenes family of Santiago in the Dominican Republic, to unveil a mint-fresh line of premium handrolled cigars.
Rate sensitive realty shares rose on bargain hunting after a recent fall triggered by worries higher interest rate on housing loans may crimp demand. Phoenix Mills, DLF, Omaxe, Sobha Developers, Omaxe, Unitech, rose by between 0.01% to 1.51%.
Meanwhile, the introduction of the contentious service tax on apartments that are still under construction in the Union Budget 2010-2011 may reportedly put pressure on property prices.
Auto stocks fell on profit taking after the recent surge. India's largest tractor maker by sales Mahindra & Mahindra (M&M) fell 0.79%. The company's board has approved demerger of the agri inputs business along with other common assets and liabilities of Mahindra Shubhlabh Services (MSSL), a subsidiary of the company into M&M. Meanwhile, M&M paid Rs 236 crore in advance tax in Q4 March 2010 versus nil payment a year earlier.
India's largest bike maker by sales Hero Honda Motors fell 1.23%. The company's board at a meeting held on Tuesday, 30 March 2010, declared a silver jubilee special dividend of Rs 80 per share.
India's largest commercial vehicle maker by sales Tata Motors fell 0.08% after company said that it has successfully completed its bond conversion and successfully extinguished debt worth $ 345-million at current exchange rates. Tata Motors had earlier offered bondholders an option to convert their bonds into ordinary shares during the 23 March to 29 March 2010 period. The Tata Motors ADR rose 4.4% on Tuesday.
The Tata Motors stock had risen 2.25% on Tuesday on BSE after the company sold a 20% stake in Telco Construction Equipment Company to Japan's Hitachi Construction Machinery Company for a consideration of Rs 1159 crore. Telcon supplies a wide range of construction equipment such as excavators, mining shovels and dumpers to the construction and earth-moving sector.
But, India's largest car maker by sales Maruti Suzuki India rose 0.51%, on bargain hunting after a recent slide triggered by fears increase in competition may dent sales. Recently, Ford India entered the small car market with 'Figo'.
Bajaj Auto rose 1.51%. The company said recently it is targeting sales of 40 lakh vehicles in the year ending March 2011. The company sold 25.78 lakh vehicles in the first eleven months of the current fiscal year ending March 2010.
Increase in raw material prices coupled with costs associated with new emission norms could force auto makers to increase prices further, which may hit volumes. The government raised excise duties on large cars and sport utility vehicles by 2%, which was immediately passed on by vehicles makers, including top carmaker Maruti Suzuki and utility vehicle makers Mahindra & Mahindra and Tata Motors. From 1 April 2010, all vehicles will have to comply with Euro IV emission norms across 13 major cities, adding to costs and setting the stage for another round of price hikes.
India's largest mobile services provider by sales Bharti Airtel rose 0.31% after company clinched a deal on Tuesday to buy most of the African operations of Kuwait's Zain for $9 billion, making it the No.2 cellular company on the African continent and setting India's biggest carrier a tough financial and management challenge. The two companies, which entered exclusive talks in mid-February, signed a legally binding definitive agreement in Amsterdam, where Zain's Africa subsidiary is based.
India's largest drugmaker by sales Ranbaxy Laboratories fell 0.21% after falling 0.99% on Tuesday on reports Daiichi Sankyo plans to delist Ranbaxy Laboratories. The Japanese drugmaker owns 64% in Ranbaxy. The report said the third-largest Japanese drugmaker was working on the buyback price to gain full control of Ranbaxy and integrate the Indian firm with itself. Daiichi had bought a majority stake in Ranbaxy in 2008 to diversify its operations into generic drugs and emerging markets.
Among other pharma stocks, Sun Pharmaceutical Industries, Lupin Pfizer, Cipla, Wockhardt, Sterling Biotech rose by between 0.09% to 1.83%.
Metal stocks fell on profit taking after recent gains. Hindalco Industries, JSW Steel, Hindustan Zinc, Gujarat NRE Coke, Jindal Saw, NMDC fell by between 0.17% to 4.8%.
India's largest steel maker by sales Tata Steel fell 0.37%, extending Tuesday's 1.14% losses. The company reportedly plans to tap the global depository receipt (GDR) market for raising at least $500 million (Rs 2,300 crore). The money is to be raised within the next two quarters, to capitalise the balance sheet, report said. Tata Steel's Q4 advance tax payment rose to Rs 513 crore from Rs 406 crore a year earlier.
Rate sensitive banking stocks fell on profit taking after recent strong gains. India's largest bank by net profit and branch network State Bank of India (SBI) fell 0.15%, falling for the second straight day.
India's largest private sector bank by net profit ICICI Bank fell 0.77%. Its ADR rose 1.19% on Tuesday. The bank's Q4 advance tax payment surged to Rs 350 crore versus Rs 250 crore a year ago. But, India's largest private sector bank by net profit HDFC Bank rose 1.37%. Its ADR fell 1.27% on Tuesday.
India's largest mortgage lender, Housing Development Finance Corporation (HDFC) rose 2.85%. As per recent reports the company plans to rejig its investments in unlisted companies to capture their value. It will transfer shares of select securities to a special purpose vehicle (SPV) and bring in strategic investors in the SPV. HDFC has investments in companies such as Lafarge, Chalet Hotels, IL&FS , IL&FS Education, National Stock Exchange (NSE), L&T Urban Infrastructure and Maruti Countrywide, which it does not consider as strategic to its business.
India's largest engineering and construction firm by sales, L&T, fell 0.8%, falling for the second straight day on profit taking. The company announced today it bagged orders worth Rs 1017 crore. The company said on Tuesday it bagged orders worth Rs 1126 crore for metallurgical, material handling & water sector projects.
Cement stocks rose on reports cement prices are likely to increase by up to Rs 7 per bag on Thursday. UltraTech Cement, India Cements and Ambuja Cements rose by between 0.46% to 1.29%.
Cals Refineries clocked the highest volume of 1.84 crore shares on BSE. Birla Power Solutions (1.23 crore shares), Syncom HealthCare (0.61 crore shares), NHPC (0.55 crore shares) and Bellary Steels (0.52 crore shares) were the other volume toppers in that order.
Hanung Toys clocked the highest turnover of Rs 86.68 crore on BSE. Sesa Goa (Rs 75.38 crore), Reliance Industries (Rs 73.69 crore), Syncom HealthCare (Rs 73.48 crore) and IL & FS Transportation (Rs 67.19 crore) were the other turnover toppers in that order.
