Frenzied buying in index pivotals led by Reliance industries, ICICI Bank and Bharti Airtel coupled with short covering triggered a solid rally on the bourses. A sharp fall in crude oil prices for the third day in a row on Thursday, 17 July 2008, boosted the sentiments. The rally was spread across sectors barring IT and metal. The market breadth was strong.

On the New York Mercantile Exchange, August 2008 crude settled $5.31 lower at $129.29 a barrel yesterday, 17 July 2008.

European markets, which opened after Indian market, were in the red. Asian markets, which opened before Indian market, were mixed.

The wholesale price index (WPI)-based annual rate of inflation rose to 11.91% in the week ended 5 July 2008, marginally higher than the 11.89% rise in the previous week. Inflation for the week ended 10 May 2008 was revised upwards to 8.57% from 7.82% reported earlier. The data was released after market hours yesterday, 17 July 2008.

The 30-share BSE Sensex was up 513.36 points or 3.92% at 13,625.21, as per provisional closing. It hit a high of 13,684.27 in late trade. At the day's high, the Sensex surged 572.42 points. The Sensex lost 18.51 points at days low of 13,093.34 hit in mid-morning trade.

The broader based S&P; CNX Nifty advanced 131.65 points or 3.34% at 4,078.85 as per provisional closing

The market breadth was strong on BSE with 1614 shares advancing as compared to 990 that declined. 83 remained unchanged.

The BSE Mid-Cap index was 1.48% to 5,231.42 and the BSE Small-Cap index rose 1.05% to 6,454.03, as per provisional closing. Both these indices underperformed the Sensex.

Political uncertainty will continue to weigh on the market in the near term. The government is holding a two-day special session of parliament on 21 July 2008 and 22 July 2008 to seek vote of confidence after it was reduced to minority following withdrawal of support by Left parties on 8 July 2008. The government hopes to retain power due to backing from Samajwadi Party, a regional party in Uttar Pradesh.

The total turnover on BSE surged in last hour of trade amounting to Rs 5312 crore as compared to Rs 3675 crore by 14:30 IST.

Among the 30-member Sensex pack, 22 advanced while the rest slipped.

Shares from banking and financial services providers rallied after the latest data showed inflation rose at a slower pace than expected.

Indias largest private sector bank in terms of net profit ICICI Bank vaulted 13.02% to Rs 622.95 on 30.74 lakh shares after the banks American depository receipt (ADR) rallied 9.4% to $29.02 on the New York Stock Exchange (NYSE) yesterday, 17 July 2008. It was the top gainer from Sensex pack.

HDFC Bank (up 7.54% to Rs 1030.35), and State Bank of India (up 5.37% to Rs 1293), surged.

India's largest dedicated housing finance company in terms of operating income HDFC soared 10.13% to Rs 2080. The stock rallied 9.91% yesterday, 17 July 2008 after the company's chairman Deepak Parekh denied rumors that Citigroup may sell its 11.74% stake in firm.

Indias largest private sector firm by market capitalization and oil refiner Reliance Industries advanced 4.69% at Rs 2110 on 14.12 lakh shares. The stock moved in a range of Rs 2125 and Rs 1995.05 in the day.

Reliance Communications, the countrys second largest cellular services provider in terms of market capitalisation was up 3.61% to Rs 433.

Mukesh Ambani-owned Reliance Industries (RIL) on Thursday, 17 July 2008 said it has started arbitration proceedings against younger brother Anil Ambanis Reliance Communications (RCOM) to thwart the latters merger with Africas largest telco MTN. According to reports, RCom has dismissed the RIL move and said the arbitration can only happen when both parties refer the dispute to a person outside the court. RCom's talks with MTN, which have been extended once, are scheduled to end on 21 July 2008.

DLF (up 6.65% at Rs 455.55), Bharti Airtel (up 7.50% to Rs 805), and Jaiprakash Associates (up 8.86% to Rs 162.25), were the other key gainers from the Sensex pack.

Most IT pivotals declined after Indias third largest software services exporter Wipro said it was cautious in the near term, echoing its larger rivals TCS and Infosys.

Wipro slumped 4.23% to Rs 363.75. The company posted 3.16% rise in consolidated net profit to Rs 907.8 crore on 5.18% rise in total income to Rs 6087.1 crore in Q1 June 2008 over Q4 March 2007. The company announced the results before trading hours today, 18 July 2008.

Indias fourth largest software services exporter Satyam Computer Services plunged 7.53% to Rs 383 on 45.77 lakh shares. It was the top loser from Sensex pack. The company reported 17.32% rise in consolidated net profit to Rs 547.70 crore on 8.47% increase in consolidated sales to Rs 2620.83 crore in Q1 June 2008 over Q4 March 2008. The company declared the results before market hours today, 18 July 2008.

Indias second largest software services exporter Infosys was down 1.76% to Rs 1555.

However Indias largest software services exporter TCS staged a strong recovery from days low of Rs 748.60. It rose 1.54% to Rs 791.20

Ranbaxy (down 3.72% to Rs 435.40), Tata Steel (down 3.38% to Rs 586.90), and ACC (down 1.06% to Rs 533.10), edged lower from Sensex pack.

Finance Ministry P Chidambaram yesterday, 17 July 2008 said more measures might be taken to tame prices even as the steps taken by the Reserve Bank of India (RBI) take effect. Inflation is hovering at a 13-year high and is well above the RBIs tolerance level of 5.5% set for the current fiscal.

The RBI is scheduled to review monetary policy on 29 July 2008 and analysts opine that the central bank may tighten monetary policy again. Last month, the RBI increased its key lending rate by 75 basis points and hiked the banks' reserve requirements by 50 basis points to combat inflation.

European markets, which opened after Indian markets were in the red. Key benchmark indices in UK, Germany and France were down by between 0.22% and 0.90%.

Asian markets which opened before Indian markets were trading mixed today, 18 July 2008. Key benchmark in Taiwan, South Korea, Singapore and Japan, and were down by between 0.65% and 2.28%. However indices from China and Hong Kong gained 3.49% and 0.64% respectively.

US stocks rallied building on optimism spurred by several unexpectedly strong earnings reports, including JPMorgan Chase. The Dow Jones Industrial Average surged 207.38 points, or 1.85%, to 11,446.66. The Standard & Poor's 500 index rose 14.96 points, or 1.20%, to 1,260.32, and the Nasdaq Composite index gained 27.45 points, or 1.20%, to 2,312.30.

Back home, frenzied buying in battered pivotals along with short covering after four straight days of catastrophic fall triggered a solid rally on the bourses yesterday, 17 July 2008. The 30-share BSE Sensex surged 536.05 points or 4.26% at 13,111.85 and the broader based S&P; CNX Nifty advanced 130.50 points or 3.42% at 3,947.20, on that day.

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