Key benchmark indices pared gains after a strong opening triggered by firm Asian stocks. The barometer index BSE Sensex came off after hitting 8-1/2-week high above the psychological 19,000 level. The 50-unit S&P; CNX Nifty pared gains after hitting its highest level in more than 8 weeks. The BSE Sensex was up 74.68 points or 0.40%, off close to 111 points from the day's high and up close to 24 points from the day's low.
The market extended its winning streak into the seventh day, with data showing heavy buying by foreign funds on Thursday, 30 June 2011, boosting sentiment. ONGC surged as its earnings will get a boost if Cairn Energy and Vedanta Resources accept the conditions set by the government for the Cairn India deal.
Foreign institutional investors (FIIs) bought shares worth a massive Rs 1591.34 crore on Thursday, 30 June 2011, as per the provisional data released by the stock exchanges. FII inflow totaled Rs 2662.74 crore in June 2011, as per the data from the stock exchanges.
At 09:26 IST, the BSE Sensex was up 74.68 points or 0.40% to 18,920.55. The Sensex jumped 185.51 points at the day's high of 19,031.38 in early trade, its highest level since 2 May 2011. The index rose 50.62 points at the day's low of 18,896.49 in early trade.
The S&P; CNX Nifty was up 11 points or 0.19% to 5,658.40. The Nifty hit high of 5,705.80 in early trade, its highest level since 3 May 2011.
The market breadth, indicating the overall health of the market, was strong. On BSE, 890 shares advanced while 308 shares declined. A total of 43 shares remained unchanged.
Among the 30-member Sensex pack, 25 stocks rose while the rest of them fell.
Oil and Natural Gas Corporation (ONGC) rose 5.17% as its earnings will get a boost if Cairn Energy and Vedanta Resources accept the conditions set by the government for the Cairn India deal. The Cabinet Committee on Economic Affairs (CCEA) on Thursday, 30 June 2011, conditionally approved Cairn Energy PLC's proposal to sell a big stake in its Indian unit Cairn India to miner Vedanta Resources PLC. CCEA approved the deal subject to the condition that Cairn has to equally and retroactively share royalty payments with ONGC on crude-oil production from an important block, reports suggest. Shares of Cairn India were down 0.69% to Rs 308.60.
Index heavyweight Reliance Industries (RIL) rose 0.27%, with the stock gaining for the third straight day, on expectations of good Q1 June 2011. RIL's advance tax payment reportedly jumped 38.46% to Rs 900 crore in Q1 June 2011 over Q1 June 2010. Higher advance tax payment normally indicates higher profit for the period under review.
The RIL stock had witnessed a sell-off recently following reports a government watchdog has accused the Oil Ministry for favouring RIL by allowing it to double the development cost of its KG-D6 gas field. The stock had hit a 52-week low of Rs 829 in intraday trade on 20 June 2011. As per recent reports, a draft report of the Comptroller and Auditor General of India (CAG) has questioned the decision of the oil ministry and its technical arm, the Director General of Hydrocarbons (DGH), to allow RIL to raise the development cost of RIL's KG-D6 field.
RIL had clarified that it has fully complied with the requirements in its production-sharing contract at all times in conducting petroleum operations.
Hindalco Industries (up 1.35%), Sterlite Industries (up 1.28%), Tata Motors (up 1.26%) and Jaiprakash Associates (up 1.18%), edged higher from the Sensex pack.
Private sector lender HDFC Bank was up 0.54% to Rs 2516. The stock hit a day's high of Rs 2538, which is also a record high fro the counter.
India's third-largest information technology (IT) services firm by sales Wipro rose 1.27% on reports the company is now eligible to participate in various World Bank projects; a four-year ban on the company in 2007 has expired. However, according to reports, the company has to reapply to become a vendor of the bank, which will be decided based on the eligibility criteria and other norms. Earlier, the World Bank had slapped a four-year ban on Wipro from doing business with the group under its corporate procurement programme for providing improper benefits to the bank's staff.
Real estate developer DLF rose 1.16% on reports the company plans to sell its shareholding in two IT special economic zones in Pune and Noida for Rs 1300 crore.
Bharti Airtel (down 2.45%), Maruti Suzuki India (down 0.97%), Hindustan Unilever (down 0.54%), State Bank of India (down 0.15%) and HDFC (down 0.10%), edged lower from the Sensex pack.
The market soon enters the crucial period of corporate earnings. Investors will closely watch the post-Q1 June 2011 result management commentary to gauge the future earnings outlook at a time when firms are witnessing costs pressures amid rising interest rates and staff costs. A hike in transportation costs will add to cost pressure of India Inc. As per reports, freight rates have gone up by 8% to 9% on all routes across India following the latest hike in diesel prices.
Housing finance major HDFC unveils Q1 June 2011 results on Friday, 8 July 2011. IT bellwether Infosys Technologies will unveil Q1 results on 12 July 2011.
Data on the health of the manufacturing sector for June 2011 is likely to be released today, 1 July 2011. The HSBC Markit Purchasing Managers' Index, based on a survey of around 500 companies, had declined to 57.5 in May 2011 from 58 in April 2011, weighed down by a slower expansion rate for new orders and a labour shortage.
Asian stocks rose on Friday on optimism Greece will avoid default after Greece's austerity program cleared the final hurdle in parliament on Thursday, 30 June 2011. The key benchmark indices in China, Japan, Indonesia, South Korea, Singapore and Taiwan were up by between 0.38% to 1.53%. Stock markets in Hong Kong and Thailand were closed for a holiday.
Two surveys showed that China's manufacturing activity slowed more than expected in June 2011
Data out Thursday showed the Chicago PMI rose to 61.1%, up from 56.6%, well above economists' forecasts. US markets are closed on Monday, 4 July 2011, for Independence Day holiday.
The UK and continental Europe are also due to release manufacturing data later in the global day
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