The key benchmark indices regained strength after paring gains in mid-morning trade, tracking mostly higher Asian stocks. The barometer index BSE Sensex today hit a seven-week high and the 50-unit S&P; CNX Nifty scaled 1-1/2-month high. Index heavyweight Relaiance Industries (RIL) extended initial gains. IT stocks fell on profit taking. Metal stocks rose as metal prices gained on London Metal Exchange on Thursday, 30 December 2010, with Hindalco Industries hitting a record high.
Except the BSE IT index, all the other sectoral indices on BSE were in green. The market breadth was strong. The BSE 30-share Sensex was up 108.95 points or 0.53%, off close to 20 points from the day's high and up close to 80 points from the day's low. The BSE Mid-Cap and Small-Cap indices outperformed Sensex.
The market edged higher in early trade, tracking higher Asian stocks. The Sensex extended gains in morning trade. The market pared gains later. The market regained strength in mid-morning trade.
Foreign funds bought shares worth a massive Rs 2186.44 crore on Thursday, 30 December 2010, as per the provisional data from the stock exchanges. Domestic funds sold shares worth Rs 848.29 crore on that day.
Foreign funds have sold shares worth a net Rs 1172.87 crore this month, as per the data from the stock exchanges. Domestic funds have sold shares worth a net Rs 360.12 crore this month, as per data from the stock exchanges.
Asian stocks rose on Friday, 31 December 2010, on positive economic data in the US, the world's biggest economy. The key benchmark indices in China, Hong Kong and Taiwan rose by between 0.16% to 0.85%. Singapore's Straits Times fell 0.7%. Stock markets in Japan, Indonesia and South Korea were closed.
Taiwan's central bank raised its policy rate on Thursday by 12.5 basis points to 1.625%, as expected.
US stocks closed slightly lower on Thursday, 30 December 2010, as better-than-expected economic data wasn't enough to entice buyers to take on much risk in a market sitting on strong gains just before the new year.
Upbeat US data on the jobs market and manufacturing sector on Thursday buttressed the view the economy gained momentum as the year ended, setting the stage for a stronger performance in 2011. New applications for unemployment benefits dropped 34,000 last week to 388,000, the lowest level since July 2008, while factory activity in the Midwest expanded in December at its fastest pace in more than 22 years.
Trading in US index futures indicated a flat opening of US stocks on Friday, 31 December 2010.
Back home, the Reserve Bank of India on Thursday warned that sudden reversal of overseas portfolio investments that have been flooding in this year could create problems for the economy. A potentially worrying feature of capital flows to India has been the dominance of portfolio flows which are prone to sudden stops and reversals, the RBI said in a report on assessment of the health of financial sector.
The second financial stability report by the central bank also warned that at present, stressed liquidity conditions warrant caution and a watchful management in the coming months. With both financial and real sectors still under stress in advanced economies, the report said, India will have to guard against vulnerabilities arising from risks to global growth and financial stability.
The report said that the other soft spots in the financial sector include widening current account deficit, deteriorating external sector ratios and tight liquidity position, in addition to inflationary pressures. The report also said that recent concerns regarding microfinance institutions (MFIs) warrant closer examination.
Inflation in the food articles group climbed to 14.44% in the week ended 18 December 2010 from 12.13% in the previous week, the latest government data showed. This was the fourth instance of an increase in food inflation after easing for seven consecutive weeks. Inflation in the Primary Articles group jumped to 17.24% in the week under review from 15.35% in the week ended 11 December 2010, the latest data showed. Inflation in the Fuel & Power group inched higher to 11.63% in the week ended 18 December from 10.74% in the week ended 11 December.
The output of six key infrastructure sectors grew 2.3% in November 2010 from a year ago, the slowest pace in the last 21 months, raising the prospects of a drop in industrial growth for the month. The six core industries -- crude oil, petroleum refining, coal, electricity, cement and finished steel, have a combined weight of 26.7% in the index of industrial production and are considered an advance indicator of industrial activity. These sectors had grown an upwardly revised 8.6% in October 2010.
The Reserve Bank of India (RBI) announced measures to ease liquidity crunch in the banking system while keeping the key policy rates unchanged at a mid-quarter policyreview on 16 December 2010. The RBI said the underlying growth momentum of the Indian economy remains strong. Even as inflation has moderated, it remains significantly above the comfort level of the RBI, the RBI said in a statement. Moreover, risks to inflation remain on the upside, both from domestic demand and higher global commodity prices, the RBI said. There is, therefore, a need for continued vigilance on the inflation front against the build-up of demand side pressures. The RBI had earlier projected 5.5% inflation by March 2011.
A major challenge for the RBI in the recent period has been liquidity management. It is the RBI's endeavor to alleviate the liquidity pressure in a manner consistent with the monetary policy stance of containing inflation and anchoring inflationary expectations, the RBI said.
Meanwhile, the combined advance tax payment by top 100 corporate taxpayers rose 18.7% to Rs 27,531 crore in Q3 December 2010 over Q3 December 2009, indicating better corporate performance in the third quarter this year. Advance tax is paid in four installments in June, September, December and March and is based on taxpayers' projected earnings, thus giving an indication of industry's performance in the months to come.
At 11:20 IST, the BSE 30-share Sensex was up 108.95 points or 0.53% to 20,498.02. The Sensex rose 130.78 points at the day's high of 20,519.85 in morning trade, its highest level since 12 November 2010. The index gained 23.69 points at the day's low of 20,412.76 in early trade.
The S&P; CNX Nifty was up 29.95 points or 0.49% to 6,131.80. The Nifty hit high of 6,138.15 in morning trade, its highest since 16 November 2010.
The BSE Mid-Cap index rose 0.9% and the BSE Small-Cap index advanced 1.17%. Both these indices outperformed the Sensex.
The market breadth, indicating the overall health of the market, was strong. On BSE, 1,807 shares rose while 770 shares declined. A total of 74 shares remained unchanged.
Among the 30-member Sensex pack, 23 rose while the rest declined. Reliance Communications, Jaiprakash Associates and DLF rose by between 2.04% to 3.87%.
Index heavyweight Reliance Industries (RIL) rose 0.81%, with the stock gaining for the third straight day. RIL's advance tax payment reportedly surged 42.8% to Rs 1191 crore in Q3 December 2010 over Q3 December 2009.
IT stocks declined on profit taking after recent rally. India's second largest IT services provider by sales Infosys shed 0.74%. The stock had hit a record high of Rs 3,447 on Thursday, 30 December 2010. Infosys will unveil Q3 December 2010 results on 13 January 2011.
India's third largest IT exporter by sales Wipro fell 0.42%%. The company said on 10 December 2010, that it won a 5-year outsourcing contract from Vasan Eye Care. Financial details of the contract were not disclosed.
India's largest software company by sales TCS declined 0.16%, with the stock snapping last three days' gains. The stock had hit record high of Rs 1174.50 on 20 December 2010. The company said on 22 December 2010 that Hilton Worldwide, a leading global hospitality company, has signed a multi-year agreement with TCS.
Metal stocks rose as LMEX, a gauge of six metals traded on the London Metal Exchange gained 0.72% on Thursday, 30 December 2010. JSW Steel, Hindustan Zinc, National Aluminum Company, Steel Authority of India, Jindal Steel & Power and Tata Steel rose by between 0.1% to 1.57%.
Copper climbed to a record in London and New York, and climbed to a 3-1/2 year high in Shanghai on optimism the global economic recovery is gaining momentum and as investors sought commodities to hedge against inflation and currency debasement.
Copper and aluminium maker Hindalco Industries rose 0.49%. The stock hit record high of Rs 245.95 today.
Hindustan Copper tumbled 7.41% on reports the company's follow-on offer may be priced at less than a third of its current market value to reflect its true value.
Reliance Broadcast Network hit an upper circuit limit of 5% on reports Citigroup Global and Goldman Sachs plan to buy about 5% stake in the company for Rs 35 crore.
Pratibha Industries gained 1.24% after the company secured an order worth Rs 144 crore from Pioneer Urban Land and Infrastructure for construction of 10 multi-storied residential towers in Gurgaon.
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