Sunday, November 7, 2010

BSE / NSE review 5th Nov 2010

It was a Diwali bonanza for stock market investors as the key benchmark indices scaled record closing highs during the special 45-minute Muhurat trading session held today, 5 November 2010, to mark the begging of the Samvat Year 2067. After a strong start, the market pared gains. Index heavyweight Reliance Industries (RIL) and Larsen & Toubro reversed initial gains. Another indecx heavyweight ICICI Bank also pared gains. The BSE 30-share Sensex jumped 111.39 points or 0.53% to 21,004.96, off close to 100 points from the day's high. All the sectoral indices on BSE were in green. The market breadth was strong.

The barometer index BSE Sensex today, 5 November 2010, crossed the psychological 21000 mark. The 50-unit S&P CNX Nifty surged past the psychological 6,300 level. Banking, realty and auto stocks rose. State Bank of India (SBI), Tata Motors and Hindalco Industries hit record highs. ICICI Bank hit 52-week high.

US stocks wavered Friday despite data showing the US economy added jobs in October 2010 for the first time in five months as private-sector hiring picked up, as the rise appeared too small to signal a turnaround in a stagnant labor market. The Dow Jones Industrial Average fell 2 points to 11,433 in early trading. The Nasdaq Composite slipped less than a point to 2575. The Standard & Poor's 500 index edged up 0.1% to 1222. .

The US Labor Department said the US economy added 151,000 jobs in October 2010, more than economists expected. The unemployment rate held steady at 9.6% for the third straight month in October 2010.

European stock markets reversed early losses Friday, 5 November 2010, after stronger-than-expected US jot data for October 2010. The key benchmark indices in France, Germany and UK rose by between 0.11% to 0.4%.

Asian stocks advanced earlier in the global day in the wake of Thursday's (4 November 2010) rally in the US stock markets. The key benchmark indices in China, Hong Kong, Indonesia, Japan and Taiwan rose by between 0.72% to 2.86%. But, South Korea's Seoul Composite fell 0.18%.

Back home, food inflation eased for a third week in late October 2010, the latest government data showed. The food price index in the year to 23 October rose 12.85% compared with 13.75% rise in the previous week, as the prices of vegetables and pulses fell. Fuel inflation for the same period was at 10.67%, slowing from 11.25% the prior week. The primary articles price index was up 15.43%, compared with an annual rise of 16.62% a week earlier. Food makes up a little over 14% of the wholesale price index (WPI) while fuel contributes about 15%.

The Q2 September 2010 corporate results have been encouraging. The combined net profit of a total of 1932 firms surged 38.8% to Rs 81022 crore on 18.4% growth in sales to Rs 588939 crore in Q2 September 2010 over Q2 September 2009.

India's services sector expanded last month at a faster rate than in September 2010, bringing an end to a 3-month decline in the key business activity index, a survey showed on Wednesday, 3 November 2010. The manufacturing sector expanded in October 2010 at a much faster pace than in September 2010, supported by strong output and a sharp rise in new business, a purchasing managers' index (PMI) showed on Monday, 1 November 2010.

The Reserve Bank of India (RBI) at its second quarterly monetary policy review on Tuesday, 2 November 2010, hiked its lending and borrowing rates by a quarter point each, as expected, to tackle inflationary pressures. The central bank signaled a pause in its policy tightening drive that began in October 2009. Based purely on current growth and inflation trends, the Reserve Bank of India (RBI) believes that the likelihood of further rate actions in the immediate future is relatively low, RBI governor D Subbarao said in a monetary policy statement. "However, in an uncertain world, we need to be prepared to respond appropriately to shocks that may emanate from either the global or domestic environment," he added.

The RBI said it will continue to closely monitor both global and domestic macroeconomic conditions. "We will take action as warranted with a view to mitigating any potentially disruptive effects of lumpy and volatile capital flows and sharp movements in domestic liquidity conditions, consistent with the broad objectives of price and output stability", the policy statement said.

Foreign funds have made heavy purchases of Indian stocks this year. Net equity inflows in 2010 now stands at a record $26.75 billion, above last year's $17.45 billion.

While global liquidity remains ample, a section of the market is worried that a strong equity issuance pipeline over the next six months will soak liquidity from the secondary equity markets. Indian companies are estimated to raise about Rs 80000 crore from equity and debt issue over the next three to six months. State-run Power Grid Corp, Steel Authority of India and Indian Oil Corp are some of the companies that are planning large share sales in coming months.

The BSE 30-share Sensex jumped 111.39 points or 0.53% to 21,004.96, a record closing high. The Sensex rose 215.07 points at the day's high of 21108.64 at the onset of the trading session. The index rose 68.41 points at the day's low of 20961.98.

The S&P CNX Nifty was up 30.65 points or 0.49% to 6,312.45, a record closing high. The Nifty hit a high of 6,338.50.

The BSE Mid-Cap index rose 1.63% and the BSE Small-Cap index rose 2.18%. Both these indices outperformed the Sensex.

The market breadth, indicating the health of the market was strong. On BSE, 2198 shares rose while 540 shares declined. A total of 80 shares remained unchanged.

From the 30 share Sensex pack 26 rose and rest fell.

Index heavyweight Reliance Industries (RIL) fell 0.11% to Rs 1103.50. The stock came off the day's high of Rs 1120. RIL's net profit rose 27.80% to Rs 4923.00 crore on 22.69% rise in net sales to Rs 57479.00 crore in Q2 September 2010 over Q2 September 2009. Its gross refining margin (GRM) for quarter was at US$7.9 per barrel as against US$ 6 per barrel in the corresponding period of the previous year. The company announced the results late last week.

Jindal Steel & Power, Reliance Communications and Larsen & Toubro fell by between 0.43% to 0.73%.

Bank stocks moved higher on optimism of a pick-up in credit offtake in a buoyant economy. India's largest bank by branch network and net profit State Bank of India rose 1.75%, with the stock gaining for the fifth straight day. The stock hit record high of Rs 3,497 today ahead of its Q2 result on Monday, 8 November 2010. But, India's second largest private sector bank by net profit HDFC Bank fell 0.41%, reversing initial gains.

India's largest private sector bank by net profit ICICI Bank was flat at Rs 1262.30 off the day's high of Rs 1277. The stock today, 5 November 2010, scaled a 52-week high of Rs 1,277.

Copper maker Hindalco Industries rose 4.97%. The stock hit a record high of Rs 238 today.

Realty stocks rose on renewed buying. Indiabulls Real Estate, Sobha Developers, HDIL, DLF and Ackuti City rose by between 0.32% to 2.26%.

Coal India rose 1.53% to Rs 347.60 after surging close to 40% on its debut on Thursday, 4 November 2010.

Auto stocks gained on expectation of strong sales during Diwali, the festival of lights. India's biggest commercial India's biggest commercial vehicles maker by sales Tata Motors rose 0.72%. The stock hit record high of Rs 1254.95 today. Total sales rose 21.26% to 64,757 units during October 2010 compared to 53,404 units in the same month last year. The company unveils its Q2 September 2010 results on 9 November 2010.

India's largest tractor maker by sales Mahindra & Mahindra rose 1.7%. The stock hit record high of Rs 794 on Thursday, 4 November 2010. The company's auto sales rose 34% to 34,495 units in October 2010 as against 25,670 units during October 2009.

Bajaj Auto rose 0.34%. The company reported 32% surge in total sales to a 3.7 lakh units in October 2010 over October 2009. The company clocked record motorcycle and commercial vehicle sales in the recently concluded month.

India's top small car maker by sales Maruti Suzuki India rose 0.17%. The company's total sales rose 39.2% to 1.18 lakh vehicles in October 2010 over October 2009.

India's largest bike maker by sales Hero Honda Motors rose 0.46%. The company reported its highest ever monthly sales at 5,05,553 units in October 2010, registering a jump of 42.75% over the same month last year

Source : CM

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