Coal India strikes record high

The key benchmark indices recovered after hitting fresh intraday lows. The BSE 30-share Sensex was down 36.59 points or 0.19% to 19,255.43, up 42.80 points from the day's low and off 101.07 points from the day's high. The market breadth turned negative from positive. Weak Asian stocks and data showing sustained selling by foreign institutional investors this week weighed on the sentiment.

Index heavyweight Reliance Industries (RIL) snapped a four-day 6.35% fall on bargain hunting. Oil exploration major Oil and Natural Gas Corporation extended Thursday's gains triggered by reports of rise in oil and oil equivalent gas production in the year ended March 2011. Coal India struck record high on reports of getting imported coal at discounted prices. Auto shares were mixed. Cement shares rose as top cement firms -- UltraTech Cement and ACC early this week forecast strong growth in cement demand at the time of announcing January-March 2011 quarter results. Most bank stocks declined as the central bank is seen raising key short-term interest rates by a minimum 25 basis points at a policy review early next week.

As per provisional data released by the stock exchanges, foreign institutional investors (FIIs) sold shares worth Rs. 832.59 crore on Thursday, 28 April 2011. Foreign funds sold shares worth a net Rs. 796.80 crore in secondary equity markets in three trading sessions from Monday, 25 April 2011 to Wednesday, 27 April 2011, as per data from the Securities and Exchange Board of India (Sebi).

At 11:25 IST, the BSE 30-share Sensex was down 36.59 points or 0.19% to 19,255.43. The index gained 64.48 points at the day's high of 19,356.50 in early trade. The Sensex fell 79.39 points at the day's low of 19,212.63 in morning trade, its lowest level since 20 April 2011.

The S&P CNX Nifty was down 6 points or 0.10% to 5,779.45. The Nifty hit low of 5,764.50, its lowest level since 20 April 2011.

The market breadth, indicating the health of the market, turned negative from positive breadth earlier in the day. On BSE, 1060 shares advanced while 1320 shares declined. A total of 99 shares remained unchanged.

The total turnover on BSE amounted to Rs. 1129 crore by 11:25 IST compared with Rs. 741 crore by 10:25 IST.

Among the 30-member Sensex pack, 16 gained while the rest declined.

Index heavyweight Reliance Industries (RIL) rose 0.68% to Rs. 980.50, halting a four-day 6.35% fall, on bargain hunting. Reportedly Mukesh Ambani-controlled Reliance group is in talks to buy the stake held by Bharti Enterprises in an Indian insurer joint venture with AXA Group. Bharti AXA is a joint venture between Bharti Enterprises, which controls India's largest listed cellular services provider Bharti Airtel, and AXA, Europe's second biggest insurer. Shares of Bharti Airtel declined 0.61%.

RIL said recently that it is drawing up a plan to raise gas production from its D6 deepwater block in the Krishna Godavari basin in the Bay of Bengal, off India's east coast. RIL said the reservoirs in the block are more complicated than previously expected and continuous and significant efforts are underway for understanding these reservoirs. RIL said it is trying to identify well locations for incremental production and sustenance.

Gas output from the block touched a peak of 60 million metric standard cubic meters a day (mmscmd) last year. Production has now fallen to 50 mmscmd as against a target of 69.8 mmscmd, S.K. Srivastava, head of India's upstream regulator, said last week. He also said that Reliance hasn't given any satisfactory response on the matter.

Integrated development plan for all other discoveries in KG-D6 is being conceptualized to augment production in the most capital efficient manner, RIL said on 25 April 2011. The company said it is studying various options such as recompletion of wells and compression to increase gas production.

India's largest oil exploration firm by market capitalization Oil and Natural Gas Corporation (ONGC) rose 0.52%. The stock extended Thursday's close to 2% gains triggered by reports the company's oil and oil equivalent gas production rose 1.8% to 62.03 million tonnes in the year ended March 2011 over the year ended March 2010.

Coal India rose 1.28% to Rs. 381.10 after striking a record high of Rs. 383.30 on reports the company has received 27 proposals from 16 companies for getting imported coal at discounted prices.

India's largest private sector bank by net profit ICICI Bank rose 0.28% on strong Q4 results. During market hours on Thursday, the bank reported a 44% jump in net profit to Rs. 1452 crore on 23% growth in net interest income to Rs. 2510 crore and an 18% growth in fee income to Rs. 1791 crore in Q4 March 2011 over Q4 March 2010. Consolidated net profit rose 16.85% to Rs. 1567.93 crore in Q4 March 2011 over Q4 March 2010.

The bank said its savings deposits increased by 26% to Rs. 66,869 crore as at 31 March 2011 from Rs. 53,218 crore as at 31 March 2010. The CASA (current & savings accounts) deposits ratio increased to 45.1% as at 31 March 2011 from 41.7% as at 31 March 2010. ICICI Bank's net non-performing asset ratio decreased to 0.94% as at 31 March 2011 from 1.87% as at 31 March 2010 and 1.16% as at 31 December 2010.

Most bank stocks declined as the central bank is seen raising key short-term interest rates by a minimum 25 basis points at a policy review early next week. India's second largest private sector bank by net profit HDFC Bank slipped 1.66% while India's largest bank by net profit and branch network State Bank of India declined 0.73%.

Auto shares were mixed. India's largest bike maker by sales Hero Honda Motors lost 2.10% to Rs. 1660.50 ahead of declaration of its year ended March 2011 result on 4 May 2011. It was the top loser from the Sensex pack.

India's largest tractor and utility vehicles maker by sales Mahindra & Mahindra (M&M) slipped 1.47%. The company on Wednesday announced the launch of its next generation passenger carrier Maxximo Mini Van priced at Rs. 3.2 lakh. Maxximo Mini Van will compete with Tata Magic and Maruti Omni in the mini van segments.

India's largest truck maker by sales Tata Motors fell 0.63%. Recent reports indicated the company has cut production in April 2011 of its sports-utility vehicles and cars--besides the Nano--by 15%-20% over March 2011. The production cut is normal balancing in production, reports said.

India's largest car maker by sales Maruti Suzuki India rose 1.12%. Chief Executive Shinzo Nakanishi said at the time of announcing Q4 results early this week that Maruti will make efforts to protect and increase margins going forward. Net profit fell 8.4% to Rs. 2288.60 crore on 24.60% increase in total income, net of excise, to Rs. 37522.40 crore in the year ended March 2011 (FY 2011) over the year ended March 2010. The company announced the FY 2011 results during trading hours on Monday, 25 April 2011. The company said adverse currency movement (particularly on exports), higher commodity prices and new model launches impacted the company's profits in the year ended March 2011.

India's second largest bike maker by sales Bajaj Auto rose 0.52%. The company announces its Q4 March 2011 result on 18 May 2011.

India's largest household products maker Hindustan Unilever gained 2.26% to Rs. 285 and was the top gainer from the Sensex pack. Reportedly the company has formed customer care teams to help boost efficiency and sales after studying product demand and customer behaviour at supermarkets.

India's second largest listed cellular services provider by sales Reliance Communications rose 0.96% on bargain hunting after sliding over 5% on Thursday on investor worries about the ongoing telecoms licencing graft case.

Reliance Infrastructure rose 0.16%. The company said after market hours on Thursday it bought back additional 2 lakh shares on Thursday, 28 April 2011, under its buyback programme of up to Rs. 1000 crore. The company has so far bought back 10 lakh shares under the buyback programme.

GVK Power Infrastructure advanced 2.07% to Rs. 24.65 after a large bulk deal of 1.5 crore shares was executed on the counter at Rs. 24.15 per share at 09:47 IST on BSE.

Crompton Greaves tumbled 9.92% on high volume of 14.49 lakh shares after consolidated net profit declined 18% to Rs. 251.43 crore on 16% rise in net sales to Rs. 2908.03 crore in Q4 March 2011 over Q4 March 2010. The result was announced after market hours on Thursday, 28 April 2011.

Cement shares rose as top cement firms -- UltraTech Cement and ACC early this week forecast strong growth in cement demand at the time of announcing January-March 2011 quarter results. ACC (up 0.26%), India Cements (up 0.23%), Madras Cement (up 1%), UltraTech Cements (up 2.15%), Shree Cement (up 0.23%), (up 8.28%), Prism Cement (up 2.66%), gained. Ambuja Cements surged 2.39% on massive volume of 5.34 crore shares on NSE.

The corporate results announced so far have been good. The combined net profit of a total of 380 companies rose 23.2% to Rs. 30693 crore on 26.3% rise in sales to Rs. 261302 crore in Q4 March 2011 over Q4 March 2010.

Nine of 14 economists polled by Capital Market expect 25 basis points (bps) hike in key short-term interest rates while five expect a 50 bps hike in short-term rates on 3 May 2011 when the Reserve Bank of India (RBI) undertakes its annual 2011-2012 monetary policy review. A cumulative hike of 75-100 bps in short-term rates is expected during the financial year ending March 2012 (FY 2012). 100 bps is one percentage point or 1 %. Economists expect inflation based on the wholesale price index (WPI) to slide to a median 7.8% in FY 2012 from 9.4% in the year ended March 2011 (FY 2011). The poll shows that economists expect inflation to remain high in the first half of the year and slide in the second half of the year.

A sharp surge in global crude oil prices over the past few months has raised macroeconomic worries. India imports majority of its crude oil requirements and high oil prices have raised concerns about widening current account deficit. High oil prices have also raised concerns about higher oil subsidy bill for the government and its negative impact on the government's fiscal position. US crude futures were down 38 cents or 0.34% at $112.48 a barrel.

The India Meteorological Department (IMD) has predicted the southwest monsoon 2011 to be 98% (normal) of the long period average (LPA) with a model error of plus/minus 5%. IMD has indicated that there is very low probability for the season rainfall to be deficient (below 90% of LPA) or excess (above 110% of LPA).

Good rains, if they arrive on time and if they are well spread, would help ease food inflation and boost rural income. Rainfall that comes within 96% to 104% of the long-term average is considered a normal monsoon season, but this alone doesn't guarantee a good crop. The timing and spread of the rains are equally important. The quantity and geographical spread of rainfall during the monsoon season is crucial for India's agriculture sector, which lacks irrigation facilities on more than half its farm land. Monsoon rains usually enter India's mainland through the southern state of Kerala in the first week of June, gradually progressing to cover most of central and northern India by July, before retreating in September.

Asian stocks declined on Friday after a report showing slowdown in US economy sparked concern whether earnings improvement can be sustained. The key benchmark indices in Singapore, South Korea, China, Taiwan, Indonesia and Hong Kong slipped by between 0.02% to 1.07%. Japanese markets are closed for a public holiday.

US stocks extended their multi-year highs on Thursday as the market clung to optimism generated by the Federal Reserve's plans to keep interest rates low. The Dow Jones Industrial Average rose 72.35 points, or 0.6%, to 12763.31, its highest close since 20 May 2008. The Nasdaq Composite index added 2.65, or 0.1% to 2872.53, its highest close since 12 December 2000 and the Standard & Poor's 500-stock index rose 4.82, or 0.4%, to 1360.48, finishing at its highest level since 9 June 2008.

In economic news, US gross domestic product grew at an annual rate of 1.8% in the first quarter compared with a 3.1% gain in the fourth quarter last year. Initial jobless claims for the week ended 23 April 2011 rose by 25,00 to 429,000, the highest level since January 2011 and pending home sales index of contract signings rose 5.1% to 94.1 in March 2011, from 89.5 in February 2011.

Trading in US index futures indicates a flat opening on Friday, 29 April 2011.

India gains as FIIs divert funds to emerging markets

With global investors shifting focus from developed to emerging markets in the last few days, India has emerged as a major beneficiary.

Since March 22, foreign institutional investors (FIIs) have net-bought Indian shares worth Rs 12,345.30 crore, according to data from the Securities and Exchange Board of India. More than half of this, or Rs 6,749.60 crore, has come in just six sessions ended April 7, data compiled by the BS Research Bureau show.

The surge in inflows on March 31, when FIIs invested Rs 3,300 crore, was due to shifting of some funds from derivatives to the cash market on the expiry day, said the head of institutional equities at a domestic brokerage.
The last time such strong inflows came in such a short span was in early November last year, when the Bombay Stock Exchange (BSE) Sensex closed at an all-time high of 21,005.

Not surprisingly, the Sensex, which closed at 19,451.45 on Friday, has gained 9 per cent since March 22.

“For the last few months, investors were exiting emerging markets and deploying money into developed markets. The trend is reversing, with emerging markets becoming relatively cheaper,” said U R Bhat, managing director, Dalton Capital Advisors (India). “Despite oil prices rising, the macro situation in India is looking better, with interest rates peaking and the balance of payment situation likely to be better than expected, on the back of robust export performance,” he said.

Net inflows into emerging market equities were $2.7 billion (Rs 12,150 crore) in the week to April 6, according to Lipper, the fourth-highest since the fund tracker began compiling this data in 1992.

“Following a 20 per cent rally since the announcement of second quantitative easing by the US at the end of August 2010, investors appear to believe that developed market equities reflect the positive outlook and emerging market equities are worth another look,” Clive McDonnell, head of equity strategy at BNP Paribas Securities Asia, said in a note to clients. “An additional factor is the improvement in valuations following the outflow of $25 billion from the emerging market equity universe in the first quarter of 2011,” he added.

Several FIIs have changed their India stance in the last one month. Early this week, JP Morgan’s Adrian Mowat, the Asian and emerging market strategist, upgraded India to overweight, citing lower inflation, normalisation of the yield curve and the progress on various legislation. After March 31, HSBC strategists have changed their India rating from underweight to neutral.

Some other influential foreign firms such as Deutsche, Morgan Stanley and Citi have also been optimistic in their India outlook.

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FIIs net buy Rs 723 crore in equities on April 5 (prov)

By Varinder Bansal, Research Analyst at CNBC-TV18

Foreign institutional investors (FIIs) have been continued to support the Indian markets since March 22. They were net buyers to the tune of Rs 723 crore in cash market on April 5, as per provisional data available on NSE.

However, FIIs were net sellers of Rs 702 crore in F&O market and DIIs too have net sold Rs 529 crore worth of equities yesterday.

FIIs in F&O

FIIs have net sold Rs 613 crore in Index Futures and net sold Rs 575 crore in Stock Futures. However, FIIs have net bought Rs 482 crore in Index Options.

NTPC provisional results will be announced today.

F&O cues

Total Futures' open interest (OI) was up by Rs 603 crore while total Options' OI up by Rs 4173 crore.

Total stock futures added 7.4 crore lakh shares in OI. Nifty futures shed 1 lakh shares in OI and its premium was down to 22 points from 35 points.

Nifty Open Interest PCR was up at 1.41 versus 1.46. Total Put added 26.65 lakh shares while Call added 35.55 lakh shares in open interest.

Highest OI outstanding was seen at 6000 call, 5400 put and 5700 put.

Nifty 5900 call added 15.88 lakh (52%) shares in Open Interest and Nifty 6000 call added 9.35 lakh (18%) shares in Open Interest.

Nifty 5700 put added 5.52 lakh (11%) shares in Open Interest and Nifty 5800 put added 4.53 lakh (10%) shares in Open Interest.

Nifty 6100 call added 4.28 lakh (16%) shares in Open Interest. Nifty May 5600 put added 3.29 lakh (122%) shares in Open Interest.

Nifty 5600 call shed 2.11 lakh (16%) shares in Open Interest, Nifty 5000 call shed 1.68 lakh (29%) shares in Open Interest and Nifty 5500 call shed 1.52 lakh (11%) shares in Open Interest.

India VIX was down by 0.80% at 19.90.

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Sensex, Nifty hit two-month highs as FIIs step up buying

The key benchmark indices surged to two month highs as investors extended their buying spree for sixth straight session on easing inflation worries following a fall in crude oil prices. Data showing stepping up of buying by foreign funds recently also underpinned sentiment. The BSE 30-share Sensex was up 129.29 points or 0.69% to 19,072.43. The market breadth was strong.

As per provisional figures, foreign institutional investors (FIIs) bought shares worth Rs.890.02 crore on Monday, 28 March 2011. FII inflow totaled Rs. 3192.41 crore in five trading sessions from 22 March 2011 to 28 March 2011 as per data from the stock exchanges.

Oil extended recent losses after Libyan rebels advanced against Muammar Qaddafi's troops, raising speculation the conflict may be resolved soon.US crude futures were down 56 cents a barrel or 0.54% to $103.42 a barrel. India imports majority of its crude oil requirements and a surge in crude oil prices to 2-1/2-year highs recently has sparked inflation and interest rates worries.

At 09:28 IST, the BSE 30-share Sensex was up 129.29 points or 0.69% to 19,072.43. The Sensex gained 132.56 points at the day's high of 19,075.70 in early trade, its highest level since 27 January 2011. The index rose 1.68 points at the day's low of 18,944.82 in early trade.

The S&P CNX Nifty was up 24.45 points or 0.43% to 5,711.70. The Nifty a high of 5,715.75, its highest level since 27 January 2011.

The market breadth, indicating the health of the market, was strong. On BSE, 818 shares advanced while 452 shares declined. A total of 48 shares remained unchanged.

The total turnover on BSE amounted to Rs. 186 crore by 09:25 IST.

Among the 30-member Sensex pack, 19 gained while the rest declined. Reliance Communications (up 2.89%), Hero Honda Motors (up 2.01%), and HDFC (up 1.02%), edged higher from the Sensex pack.

India's largest listed cellular services provider by sales Bharti Airtel surged 3.09% to Rs.358.50 and was the top gainer from the Sensex pack. The stock extended four-day rally after a report showed the company has acquired up to 6-lakh 3G subscribers since the launch of the next generation telephony service in end-January 2011.

Oil & gas stocks were in action after the ninth round of oil and gas block auctions closed on Monday. India's largest oil exploration firm ONGC rose 1.54% on reports a consortia led by ONGC won 10 blocks in the latest round of bidding.

Index heavyweight Reliance Industries (RIL) rose 0.09% to Rs. 1024.30 on reports the firm was awarded two blocks in the latest round of bidding for oil & gas blocks in India.

RIL on Sunday, 27 March 2011, agreed to establish a joint venture (JV) with D.E. Shaw Group to build a leading financial services business in India. The JV will incorporate the D. E. Shaw group's investment and technology expertise with RIL's operational knowledge and extensive presence across India to offer a comprehensive array of financial services to the Indian market place, the two companies said in a joint press release.

India's largest realty firm by sales DLF lost 0.99% to Rs. 244.60 and was the top loser from the Sensex pack.

ACC fell 1.46% after the stock turned ex-dividend today, 29 March 2011, for a final dividend of Rs. 13 per share and one time special dividend Rs. 7.50 per share.

Volatility may remain high on the bourses in the near term ahead of the expiry of derivative contracts for the near-month March 2011 series on Thursday, 31 March 2011. Year-end reshuffling of positions by traders may add to volatility.

The near term major trigger for the market is Q4 March 2011 results which will start trickling in from about mid-April 2011.

Asian stocks were mixed on Tuesday, 29 March 2011 amid concerns arising from muted earnings in Japan as the nation struggled to contain a meltdown at a nuclear plant. The key benchmark indices in Singapore, Japan, Indonesia, and Hong Kong fell by between 0.01% to 1.28%. The key benchmark indices in China, South Korea and Taiwan were up 0.12% and 0.23%.

US stocks edged lower on Monday, 28 March 2011, after a late tumble undercut advances from earlier in the day, and as investors cautiously retreated ahead of key data reports later this week. The Dow Jones Industrial Average closed down 22.71 points, or 0.2%, at 12197.88. The Nasdaq Composite fell 12.38, or 0.5%, to 2730.68 and the Standard & Poor's 500-stock index shed 3.61, or 0.3%, to 1310.19.

In economic news, the National Association of Realtors said its Pending Home Sales Index, based on contracts signed in February 2011, increased 2.1% to 90.8. The index had declined 2.8% in January 2011.

Trading in US index futures indicated that the Dow could rise 7 points at the opening bell on Tuesday, 29 March 2011.

Billionaire investor and international investment icon Warren Buffett who was in his maiden visit to India last week said that he hopes to spend some money in India. His firm Berkshire Hathaway is looking to park funds in large investment destinations and India fits the bill perfectly, he said. India, according to him, is not an emerging market but a very big country with a large number of significant businesses. He said that Berkshire Hathaway would look at possible acquisitions in India as and when there were opportunities.

Indian business tycoons Ratan Tata and Anil Ambani will appear before a parliamentary committee that is probing a multi-billion-dollar telecoms licencing scandal. The parliament's Public Accounts Committee (PAC) is investigating alleged corruption in the sale of 2G telecoms licences in 2007-08, which a state auditor said cost the government up to $39 billion in lost revenue, and led to the sacking of a former telecoms minister.

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