The key benchmark indices surged in late trade to hit fresh intraday highs tracking firm global stocks on positive China's trade data and easing tensions in Egypt political crisis. Domestic data showing slowing inflation in January 2011 eased worries of further monetary tightening by the central bank also aided rally. Market gained for the second straight day as investors bargain hunt beaten down stocks after the recent sell off. Reliance Infrastructure gained on good Q3 results. Today's rally was broad based with all the 13 sectoral indices on the BSE clinching gains with shares from capital goods, metal, auto and banking in the forefront. The market breadth was strong with the BSE Mid-Cap and Small-Cap indices outperforming the Sensex. The BSE 30-share Sensex was provisionally up 488.86 points or 2.76%. The Sensex regained psychological 18000 mark today.
The market opened on a firm note on positive Asian stocks. It was hovering near the day's high after hitting fresh intraday highs in morning trade. It surged to hit fresh intrday highs in mid-morning trade. It extended gains in early afternoon trade. Market extended gains to strike fresh day's high in afternoon trade. It was hovering near the day's high in mid-afternoon trade. It surged to hit fresh intraday highs in late trade.
The headline inflation eased slightly in January on some moderation in manufactured products. The wholesale price index (WPI), India's main inflation gauge, rose 8.23% in January from a year earlier. The index rose 8.43% in December from a year earlier. Food prices in the WPI index jumped 15.7% in January compared with 13.6% in December. As per provisional figures, foreign funds sold shares worth Rs. 537.71 crore while domestic funds bought shares worth Rs. 519.67 crore on Friday, 11 February 2011.
The government expects headline inflation to ease to 7% by end March, Finance Minister Pranab Mukherjee said on Monday, matching other government forecasts.
The Q3 December 2010 results season is drawing towards a close. The results announced so far showed that the combined net profit of a total of 2,960 companies rose 21.5% to Rs. 85820 crore on 18.9% rise in sales to Rs. 933468 crore in Q3 December 2010 over Q3 December 2009.
There are concerns of slowdown in corporate profit growth going ahead. With the rise in key policy rates by the Reserve Bank of India (RBI) recently, interest cost will only rise in the coming quarters that could hurt earnings going forward. If raw material costs keep rising at a fast clip, companies will feel the heat of slowing sales growth and rising cost of operations that could start eating into profit growth.
European shares rose on Monday to a 29-month high as talk of slower-than-expected Chinese inflation data and strong China trade figures boosted sentiment, with miners the major risers. The key benchmark indices in France, Germany and UK rose by between 0.01% to 0.32%.
Asian stocks rose on Monday as investors greeted news of Egyptian President Hosni Mubarak's resignation with relief. The key benchmark indices in Hong Kong, Indonesia, Japan, Singapore, South Korea and Taiwan rose by between 0.88% to 1.89%.
China's Shanghai Composite jumped 2.53% after China's trade surplus fell to its lowest in nine months in January after imports surged, supporting the government's case ahead of a G20 meeting that it is doing enough to spur domestic demand without speeding up currency appreciation. The trade surplus shrank to $6.5 billion from $13.1 billion in December, well short of forecasts for a $10.7 billion gap.
Japan's economy shrank slightly in the final quarter of 2010 but analysts expect a recovery this year as stronger exports to China and other parts of fast-growing Asia offset persistently weak domestic demand. Gross domestic product (GDP) shrank 0.3% in October-December from the previous quarter, slightly less than a 0.5% fall expected by markets but still the first contraction in five quarters.
Mubarak handed power over to the army, bowing to escalating pressure from the military and protesters demanding he goes. His departure was seen partially reviving investors' appetite for risk. Two weeks of anti-government protests in Egypt sparked concerns the unrest could spread across the Middle East, contributing to volatility in markets and commodity prices worldwide.
US index futures pared gains. Trading in US index futures indicated that the Dow could gain 1 points at the opening bell on Monday, 14 February 2011.
U.S. stocks closed out their second straight week of gains on Friday with a rally sparked after Egyptian President Hosni Mubarak resigned, easing tension around the region for now.
As per provisional figures, the BSE 30-share Sensex was up 488.86 points or 2.76% to 18,217.47. The index gained 499.01 points at the day's high of 18227.62 in late trade. The Sensex rose 128.51 points at the day's low of 17857.12 in early trade.
The S&P CNX Nifty gained 152 points or 2.86% to 5,462 as per provisional figures.
The BSE Mid-Cap index rose 3.57% and the BSE Small-Cap index rose 3.99%. Both these indices outperformed the Sensex.
The market breadth, indicating the health of the market, was strong. On BSE, 2427 shares advanced while 500 shares declined. A total of 61 shares remained unchanged.
All the 30 members from the Sensex pack 28 stocks logged gains and two fell.
BSE clocked turnover of Rs. 3448 almost same as that of Rs. 3445.18 crore on Friday, 11 February 2011.
Index heavyweight Reliance Industries (RIL) rose 0.48%to Rs. 915 reversing initial losses. The stock had fallen to the day's low of Rs. 895 on reports stock exchange regulator Sebi could levy a record penalty on RIL if it is able to establish that the company was involved in insider trading. The penalty could be worth Rs. 25 crore or three times the amount of profit the company made from insider trading - whichever is higher.
Diversified Jaiprakash Associates surged 6.73% extending Friday's 7.35% gains. The stock had hit 52 week low of Rs. 70.25 on 9 February 2011.
Reliance Infrastructure rose 1.35% to Rs. 624 after company announced buyback of shares at a price of Rs. 725 at a premium over the current ruling price. The consolidated net profit rose 10.16% to Rs. 405.25 crore on 11.2% rise in total income to Rs. 3871.64 crore in Q3 December 2010 over Q3 December 2009. The company announced Q3 result during market hours today.
India's largest engineering and construction firm by sales Larsen & Toubro jumped 7.21% after company announced during market hours today that it bagged Rs. 1100 crore EPC order from GSECL.
Among other capital goods stocks, Bhel, Usha Martin, ABB, BEML and Thermax rose by between 3.51% to 6.28%.
Inerest rate sensitive auto stocks rose across the board after data showed inflation moderated in the month of January. Car maker Maruti Suzuki India rose 3.18%. The stock had hit a 52-week low of Rs. 1146 on Thursday, 10 February 2011. India's second largest bike maker by sales Bajaj Auto gained 3.22%. India's top bike maker by sales Hero Honda Motors rose 3.84%. The stock had hit a 52-week low of Rs. 1412.20 on Wednesday, 9 February 2011.
Mahindra and Mahindra (M&M) gained 1.51%. The company recently unveiled plans to acquire a 38% stake in BSE-listed EPC Industrie. The acquisition would be through preferential allotment of shares by EPC, following which M&M will make the mandatory open offer to acquire a 20% stake in the Nashik-based micro-irrigation firm.
Tata Motors jumped 5.58% after consolidated net profit jumped 272.9% to Rs. 2424 crore on 22% rise in consolidated revenue to Rs. 31685 crore in Q3 December 2010 over Q3 December 2009. The company announced the Q3 result at the fag end of the trading session on Friday, 11 February 2011. The stock had jumped 3.79% on Friday.
Interest rate sensitive banking stocks rose after data showed inflation moderated in the month of January. India's largest private sector bank by market capitalisation ICICI Bank was up 2.94%. India's second largest private sector bank by market capitalisation HDFC Bank was up 2.39%. India's largest commercial bank by branch network State Bank of India gained 4.42%. State Bank of India has raised term deposit rates on two maturity buckets — 555 days and 1,000 days — by 25 basis points. Simultaneously, to protect its margins, the bank has marked up its lending rate by 25 basis points. All rate hikes are effective from 14 February 2011.
Among other banks, Federal Bank Yes Bank, Bank of India, Canara Bank, IDBI Bank, Indian Overseas Bank, Axis Bank, Kotak Mahindra Bank, Bank of Baroda, Union Bank of India and Punjab National Bank rose by between 2.19% to 5.43%.
Metal stocks gained across the board after China's trade data showed imports surged in the month of January. China is the World's largest consumer of base metals. Hindalco Industries rose 3.84% after net profit rose 7.78% to Rs. 460.34 crore on 12.53% rise in total income to Rs. 6035.22 crore in Q3 December 2010 over Q3 December 2009. The company announced Q3 result on Saturday, 12 February 2011.
Steel giant Tata Steel rose 4.26% ahead of Q3 results on Tuesday, 15 February 2011.
Jindal Steel & Power, Hindustan Zinc, JSW Steel, Jindal Saw, Sterlite Industries Steel Authority of India, National Aluminum Company rose by between between 0.01% to 6.59%.
LMEX, a gauge of six metals traded on the London Metal Exchange rose 0.11% on Friday, 11 February 2011.
In macro news, the latest economic data showed industrial output in December 2010 rose a slower-than-expected 1.6% from a year earlier. Manufacturing output, which constitutes about 80% of the industrial production, rose an annual 1%, the statistics office said in a statement. Growth in industrial output in November 2010 was revised upwards to 3.62% from earlier 2.7%
The food price index rose 13.07% and the fuel price index climbed 11.61% in the year to 29 January 2011, government data on Thursday 10 February 2011 showed. In the prior week, annual food and fuel inflation stood at 17.05% and 11.61%. The primary articles price index was up 16.24% in the latest week, compared with an annual rise of 18.44% a week earlier.
The next major trigger for the stock market is Union Budget 2011-2012 to be unveiled by the finance minister Pranab Mukherjee on 28 February 2011. Investors will watch if the Finance Minister announces measures to rein in inflation and inflationary expectations. The Finance Minister may announce a new road map for the Goods & Services Tax (GST). The original deadline of 1 April 2010 for roll-out of GST has already been missed due to the lack of consensus between the Centre and states on the issue. GST is India's most ambitious indirect tax reform plan, which aims to stitch together a common market by dismantling fiscal barriers between states.
The Centre has reportedly sent the empowered committee of state finance ministers yet another draft constitutional amendment on the proposed goods & services tax (GST) in a last-ditch attempt to reach a consensus before the Budget session of Parliament. The third draft reportedly proposes the creation of a GST Council through an Act of Parliament, instead of presidential order, as proposed in the previous draft.
The government may also announce some populist measures in the Budget given that assembly elections are due in Kerala, Tamil Nadu, West Bengal and Assam. In all these states, the Congress is potentially looking to regain power or to retain it.
