Firm global markets have helped domestic bourses from the mayhem they witnessed early this week when the Sensex had plunged 800 points in just two trading sessions on 11 December and 12 December. With a strong rebound, technical analysts are now eying key resistance levels for the key indices and fundamental analysts the corporate advance tax figures for the third installment due on 15 December.
A decline in inflation and provisional data showing heavy FII buying on Thursday, added to recovery today besides the firm global markets. However, the market failed to sustain the higher level as it approached a key resistance level.
The 30-share BSE Sensex jumped 127.36 points or 0.9% to settle at 13,614.52. The S&P; CNX Nifty rose 45.6 points or 1.1% to settle at 3,888.65. Nifty pared gains after scaling 3,908.45 in mid-afternoon trade. Technical analysts feel that 3,900-3,920 is a key resistance level for Nifty. Only a decision close to that level will indicate resumption of uptrend, they say. Nifty also has a strong support at 3,700 level, market participants feel.
Sensex pared gains after it gained as much as 182.49 points to a high of 13,669.65 in mid-afternoon trade. It remained in the green throughout the day today.
The market-breadth was strong. For 1,549 shares rising on BSE, 1,007 declined. A total of 71 shares were unchanged. Gainers outpaced losers by a ratio of 1.53:1.
The BSE clocked a turnover of Rs 4,150 crore compared to Thursdays Rs 4415 crore.
Asian and European markets were steady-to-firm. Key benchmark indices in Hong Kong, Japan and London were up 0.3 - 1%. US stocks surged on Thursday, driving the Dow industrials to a record close on strong earnings from companies such as investment bank, Bear Stearns Company, and an improving outlook for the US economy. The Dow Jones industrial average gained 99.26 points, or 0.81%, while the Standard & Poor's 500 Index jumped 12.28 points, or 0.87%, to end at 1,425.49. The Nasdaq Composite Index finished up 21.44 points, or 0.88%, at 2,453.85.
Nymex crude rose 27 cents, to $62.78 a barrel, extending Thursdays near 2% surge due to an OPEC decision to cut production once again.
The market has seen sharp movements in the past few days. A near 1,000-point fall in Sensex in three trading sessions, between 8 December 2006 and 12 December 2006, was followed by a recovery of about 620 points in the last two trading sessions.
After the latest industrial data, which spread fear of an economic slowdown, market men will now be closely eyeing advance tax payment by corporates for the third installment, due on 15 December 2006. The corporate advance tax payment will provide a broad outline of Q3 corporate results. More so, given that strong earnings growth has been a key driver of the bull-run on the bourses.
Market men will also be watching FII allocations for India for calendar year 2007.
As per provisional data, FIIs were net buyers to the tune of Rs 480 crore on Thursday (14 December), the day when the Sensex had surged 306 points. They were net sellers to the tune of Rs 96.90 crore on 13 December, the day when the Sensex had gained 186 points.
FIIs were seen cutting cash-futures arbitrage positions in the recent market fall. On the top of it, they pressed heavy sales in index-based futures. Their net sales in index-based futures in four trading sessions, between 8 December and 13 December, aggregated Rs 3,036 crore.
Mutual funds have pressed heavy sales recently. Their net outflow in three trading sessions between 11 December to 13 December totaled Rs 1439 crore.
A section of the market expects sideways movement on the bourses in the coming days as, it is felt, FII participation will be limited on account of year end factor and volumes might take a hit. Foreign fund managers will be on a holiday for Christmas and year-end from middle of next week from about 20 December.
In todays trade, PSU banks surged after data released at 12:00 IST revealed that inflation eased to 5.16% for the 12 months to 2 December, compared to 5.3% in the previous week. Canara Bank surged 9.9% to Rs 291.90, Bank of Baroda rose 4.7% to Rs 246 and Bank of India gained 4.4% to Rs 193.25.
State Bank of India gained 3% to Rs 1,261. The Standing Committee on Finance has endorsed the proposed legislative amendment to reduce State Bank of Indias shareholding in its subsidiary banks from current 55% to 51%.
Reliance Industries (RIL) declined in volatile trade. The stock shed 0.7% to Rs 1252.55. Reports today suggest, RIL has paid Rs 444 crore towards the third installment of advance tax due 15 December 2006. CLSA, a brokerage, while issuing an outperform rating on the scrip with a 12-month price target of Rs 1,265, recently stated that RIL's scrip performance over the next year will hinge on news flow.
Battered Tata Steel surged 5.5% to Rs 460. A strong 27.3 lakh shares changed hands in the counter on BSE. The stock rose on bargain-hunting, after a steep fall caused by concerns over its bidding war with Brazils CSN. Both are locked in a deadly duel over European steel maker Corus Group.
Reliance Communications surged 4% to Rs 466, extending its rebound of the last two days, amid reports of the company chasing Hutchison's India operations.
Hindalco surged nearly 4% to Rs 177.95, tracking firm global copper prices. The stock rose on a huge volume of 38.2 lakh shares on BSE.
Select IT pivotals gained, tracking overnight gains in their ADRs. Satyam Computer rose 3% to Rs 481.70, after its ADR rose 3.6% to $23.79. Infosys rose 1.8% to Rs 2,239; its ADR rose 2.1% to $55.20.
But Wipro lost 1.2% to Rs 563.25 even as its ADR rose 3.2% to $15.60.
ACC (up 2.2% to Rs 1,055) held firm. The board of ACC has approved an expenditure of about Rs 1,480 crore to raise the capacity of the New Wadi plant, by about 3 million tonnes per annum.
Grasim gained 2.9% to Rs 2,741, extending its recent surge.
Gujarat Ambuja Cements rose 0.6% to Rs 139.50 in volatile trade. Gujarat Ambuja Cements said on Friday, its board approved a capital expenditure plan of Rs 1,520 crore to raise cement capacity by three million tonnes per annum.
Cigarette major ITC shed 1.7% to Rs 173.85, and power generation giant NTPC shed 1.3% to Rs 143.55.
Bajaj Auto lost 0.1% to Rs 2579. As per reports the company will be hiking prices across product range, except for the Pulsar, by about Rs 500 from next month.
Tata Motors rose 0.5% to Rs 857.60 after it decided to jointly invest Rs 4,000 crore with Fiat, in a car and engine making facility at Ranjangaon, Pune.
IDBI rose 0.8% to Rs 75.80. International Finance Corp (IFC) has tied up with IDBI to fund lower carbon emissions by Indian companies.
Bombay Burmah Trading Corporation rose nearly 1% to Rs 338, after its wholly-owned subsidiary, AFCO Industrial & Chemicals, acquired an auto electrical components firm, Electromags Automotive Products.
Federal-Mogul Goetze (India) gained 5.2% to Rs 420, after the auto parts maker said its board will meet on 21 December 2006, to consider a rights issue of up to Rs 115 crore.
Pacific Cotspin jumped nearly 6% to Rs 6.24. The company announced that its board will meet on 22 December to discuss a preferential issue of equity shares for promoters.
Unichem Laboratories gained nearly 3% to Rs 262, after the company said it has acquired the residual 40% stake in Niche Generics, thus making it a 100% subsidiary. Niche Generics is into product development, dossier filing and manufacturing pharmaceutical formulations in the European markets.
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