Mumbai, April 05: Sustained buying in index pivotals pushed the key benchmark indices to their highest level in 25 months. Firm Asian stocks underpinned the sentiment. US markets settled at 18-month highs on Thursday, 1 April 2010 while some Asian markets zoomed to 19-months high in today’s trade buoyed by an upbeat US job data. The BSE 30-share Sensex was up 126.23 points or 0.71%, up 125.19 points from the day’s low and off just 3.94 points from the day’s high.
Stock-specific action may rule the roost in the near term based on expectations of Q4 March 2010 results. IT bellwether Infosys kickstarts the reporting season on 13 April 2010.
Emerging market equity funds ended March 2010 with their seventh consecutive week of inflows, bringing net inflows to nearly $7.6 billion in the first quarter. All four of the major fund groups took in modest amounts of fresh money, ranging from a net $6 million for Latin America Equity Funds to $222 million for EMEA Equity Funds. China equity funds, however, recorded inflows for only the third week so far this year as some investors continue to be put off by rich valuations, growing exchange rate and trade frictions with the United States and uncertainty about just how far authorities will go to prevent a property bubble.
Asian markets edged higher on Monday, 5 April 2010, as a strong US job report boosted confidence the global economy is recovering. Key benchmark indices in Indonesia, Japan and Singapore were up by between 0.43% to 2.21%. However, South Korea’s Seoul Composite index slipped 0.20%. Markets in Australia, New Zealand, China, Hong Kong and Taiwan were shut for holidays.
US markets advanced on Thursday, 1 April 2010 on upbeat economic data. However, anxiety about March payrolls report scheduled to be released on Friday 2 April 2010 and profit booking before the long Easter weekend, capped gains. The Dow Jones Industrial Average climbed 70.44 points, or 0.65%, to 10,927.07. The Standard & Poor’s 500 Index rose 8.67 points, or 0.74%, to 1,178.10 and the Nasdaq Composite index added 4.62 points, or 0.19%, to 2,402.58.
An index of US manufacturing activity in March 2010 rose to its highest level in over five-and-half years, the Institute for Supply Management said. Earlier, a US Labour Department report showed initial weekly claims for jobless benefits fell more than expected.
US employers created jobs in March 2010 at the fastest rate in three years, the strongest signal yet that the US recovery is on a solid footing. US nonfarm payrolls rose 162,000 in March, the largest since March 2007, and only the third time payrolls have increased since the recession hit in late 2007. The unemployment rate held steady at 9.7% for a third straight month, the Labor Department said on Friday.
Trading in US index futures indicated that the Dow could rise 44 points at the opening bell on Monday, 5 April 2010.
European equity markets are closed on Monday, 5 April 2010, for holidays.
The world economy could grow 4.1% this year, 0.2 points more than previously forecast, the International Monetary Fund (IMF) said in the latest draft during the weekend of its World Economic Outlook. The US economy is now expected to grow 3% this year, instead of the 2.7% forecast in the IMF’s January report. The IMF is due to publish its next World Economic Outlook on 21 April 2010.
According to the draft, euro zone growth this year is now forecast to be 0.8%, down 0.1 points from January’s estimate. In 2011, the figure is seen at 1.5%, also down 0.1 points from a previous estimate, the report said.
Closer home, food price index rose 16.35% in the year to 20 March 2010, higher than an annual rise of 16.22% in the previous week, government data showed on Thursday. The fuel price index rose 12.75%, higher than an annual rise of 12.68% in the previous week. Fuel costs have risen following a hike in domestic fuel prices and an upswing in world crude prices. The primary articles index was up 13.86% in the year to 20 March 2010.
India’s manufacturing growth slowed down in March 2010, dropping from a 20-month-record in February 2010, as mounting cost pressures took a toll on expansion in output, a survey released on Thursday showed. The HSBC Markit Purchasing Managers’ Index , based on a survey of 500 companies, fell to 57.8 in March 2010 from 58.5 in February 2010, which was the strongest since June 2008. A reading above 50 means activity is expanding. The new orders index fell to 62.7 in March from 64 in February
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 Wednesday.
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. Imports, too, maintained momentum growing by 66% to $25 billion underscoring the strong revival in the domestic economy.
The BSE Sensex vaulted 7,819.27 points or 80.5% in the year ended March 2010 (FY 2010) helped by heavy purchases by foreign institutional investors. Indian companied raised over Rs 47,800 crore through public offers during the fiscal 2009-2010, following buoyant secondary market.
Global credit rating agency Standard & Poor’s, last month, revised the outlook on India to stable from negative due to improved government finances.
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.
As per data from the stock exchanges, foreign institutional investors (FIIs) bought stocks worth a net Rs 14,792.31 crore in March 2010.
The BSE 30-share Sensex was up 126.23 points or 0.71% to 17,818.85 at 11:24 IST. The index rose 130.17 points at the day’s high of 17,822.79 in mid-morning, its highest level since 28 February 2008. The Sensex gained 1.04 points at the day’s low of 17,693.66 in early trade.
The S&P CNX Nifty was up 41.30 points or 0.78% to 5331.80. Nifty hit an intra-day high of 5,331.90, its highest level since 27 February 2008
The market breadth, indicating the overall health of the market, was strong. On BSE, 2045 shares advanced as compared with 617 that declined. A total of 46 shares remained unchanged.
The total turnover on BSE amounted to Rs 1636 crore by 11:25 IST, compared with Rs 1109 crore by 10:25 IST.
From the 30 Sensex stocks, 21 advanced while the rest of them slipped. Hindustan Unilever (down 1.06%), HDFC Bank (down 0.51%), and Reliance Communications (down 0.35%), edged lower from the Sensex pack.
Auto stocks were in demand following robust March 2010 sales figures. India’s top motorbike maker by sales Hero Honda Motors surged 2.68% to Rs 2000 after it said sales rose 17% in March 2010 over March 2009. It was the top gainer from the Sensex pack.
India’s largest truck maker by sales Tata Motors gained 0.28% after it reported a 38% jump in sales in March 2010 from a year earlier.
India’s top small car maker by sales, Maruti Suzuki India rose 0.09%. The company raised the price of its vehicles across different models due to higher input costs and expenses from the introduction of the new Bharat Stage IV emission norms. Among different models, Ritz and A-Star will cost Rs 1,000 more; Estillo will become costlier by Rs 2,500 and Swift will cost Rs 3,750 more. Popular model Maruti 800 will also see a price rise of Rs 3,000 costlier, among others.
India’s leading tractor maker by sales Mahindra & Mahindra spurted 1.73% after sales rose 20% to 31,698 vehicles in March 2010 over March 2009.
India’s second largest two- wheeler maker Bajaj Auto gained 3.13% to Rs 2059.80 after it reported 85.12% spurt in its motorcycle sales at 2,44,828 units in March 2010 over March 2009. The stock hit a lifetime high of Rs 2063.10 in intra-day trade today.
The rally in auto stocks spilled over auto component makers as well on hopes robust auto sales in the last fiscal year ended March 2010 will boost profitability. Steel Strip Wheel (up 16.86%), Bharat Seats (up 5%), Munjal Showa (up 2.63%), Sona Koyo Steering (up 2.96%), Subros (up 3.87%), Exide Industries (up 0.81%), Bharat Forge (up 0.10%) and Mico (up 0.18%), edged higher.
Index heavyweight Reliance Industries (RIL) gained 1.40% to Rs 1109 on expectations of robust Q4 earnings. As per reports, RIL’s Q4 advance tax surged to Rs 770 crore in Q4 March 2010 from Rs 365 crore a year ago.
RIL is reportedly likely to raise crude oil imports by about 22% this year ended March 2011 as it ramps up production at its giant complex, further stamping its mark on world markets.
Shares of oil exploration firms rose after crude oil prices gained more than $1 a barrel on the New York Mercantile Exchange on Thursday, 1 April 2010. Oil India (up 0.32%), Oil & Natural Gas Corporation (ONGC) (up 0.46%), and Cairn India (up 0.57%), advanced.
Rise in crude oil prices would result in higher realizations from crude sales for oil exploration firms. Light, sweet crude oil gained $1.11 or 1.3%, to $84.87 a barrel on the New York Mercantile Exchange on Thursday, 1 April 2010, the highest settlement price since 9 October 2008, after upbeat US economic data signaled better oil demand ahead.
India’s largest mobile services provider by sales Bharti Airtel surged advanced 1.62%. On 30 March 2010, Bharti Airtel cinched a deal 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 private sector bank by net profit ICICI Bank rose 2.23% after its ADR gained 1.99% on Thursday, 1 April 2010.
IT stocks dropped as the rupee extended recent strong gains against the dollar. 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 second largest software services exporter by sales Infosys slipped 0.16%.
India’s third largest software services exporter by sales Wipro declined 0.49% and India’s largest software services exporter by sales Tata Consultancy Services (TCS) fell 0.32%
The rupee was stronger against the dollar on Monday in line with the domestic stock market. The partially convertible rupee was at 44.71/72 per dollar, higher from Wednesday’s closing of 44.89/90. The forex market was shut on Thursday for the annual book closing of banks, and also for Good Friday.
TTK Healthcare gained 3.29% after the company entered into a tie with an American collaboration to manufacture and market orthopeadic implants. The company made this announcement before trading hours today, 5 April 2010.
–Agencies