A bout of volatility was witnessed as the key benchmark indices recovered from lower level. The BSE Sensex was up 77.12 points or 0.41%, up close to 35 points from the day's low and off close to 108 points from the day's high. Index heavyweight Reliance Industries (RIL) dropped. IT, PSU and realty shares rose. Shares of organized retailers, FMCG firms and construction stocks were also in demand.
The market extended its winning streak into the seventh day, with data showing heavy buying by foreign funds on Thursday, 30 June 2011, and firm Asian stocks boosting sentiment. 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.
The barometer index BSE Sensex pared gains after a firm start took it to 8-1/2-week high above the psychological 19,000 level. The market came off lows later.
At 10:18 IST, the BSE Sensex was up 77.12 points or 0.41% to 18,922.99. 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 42.04 points at the day's low of 18,887.91 in early trade.
The S&P; CNX Nifty was up 14.55 points or 0.26% to 5,661.95. The Nifty hit high of 5,705.80 in intraday trade, its highest level since 3 May 2011.
The market breadth, indicating the overall health of the market, was strong. On BSE, 1,553 shares advanced while 602 shares declined. A total of 80 shares remained unchanged.
Among the 30-member Sensex pack, 25 stocks rose while the rest of them fell.
Index heavyweight Reliance Industries (RIL) fell 0.67% to Rs 891.60, off the day's high of Rs 906. 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.
Reliance Communications (up 2.98%), Sterlite Industries (up 1.76%), Reliance Infrastructure (up 1.49%), Jaiprakash Associates (up 1.55%) and Bajaj Auto (up 0.79%), edged higher in the Sensex pack. Bharti Airtel (down 2.09%), Hindustan Unilever (down 1.01%) and Cipla (down 0.41%), edged lower from the Sensex pack.
India's largest car maker by sales Maruti Suzuki fell 1.25% after its total sales declined 8.8% to 80,298 units in June 2011 over June 2010. The company said production was adversely impacted due labour strike at Manesar plant in June 2011. There was no production for 10.5 days due to the strike. Another reason for lower production was planned shutdown at its units.
Realty stocks rose. Peninsula Land, Indiabulls Real Estate, Unitech, Phoenix Mills, Orbit Corporation, Ackruti City, HDIL, Mahindra Life Space Developers, Sobha Developers, Anant Raj Industries and Sunteck Realty rose by 0.12% to 3.66%.
The ASK Group has reportedly raised Rs 520 crore through the first close of its second real-estate fund. The fund will invest in urban and suburban projects up to 12 months ahead of the projects' launch.
Real estate developer DLF rose 1.80% to Rs 214.35 on reports the company plans to sell its shareholding in two IT special economic zones in Pune and Noida for Rs 1300 crore.
IT shares rose on renewed buying. Infosys, HCL Technologies, Patni Computer, MphasiS, Tech Mahindra, Mahindra Satyam, TCS, Rolta India and Oracle Financial Services Software rose by 0.28% to 1.34%.
The National Association of Software and Services Companies (Nasscom), last week, reiterated its forecast of a 16%-18% growth in export revenue for IT outsourcing services in this fiscal year that began on 1 April 2011.
India's third-largest information technology (IT) services firm by sales Wipro inched up 0.24% 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.
Oil and Natural Gas Corporation (ONGC) rose 2.17% to Rs 279.90 as the firm's 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, granted conditional approval to Vedanta Resources' plan to buy British oil explorer Cairn Energy's Indian assets. CCEA approved the deal subject to the condition that Cairn India has to equally and retroactively share royalty payments with Oil and Natural Gas Corporation (ONGC) on crude-oil production from its main oil-producing block in Rajasthan, reports suggest.
ONGC, which holds a 30% stake in the block, currently pays the entire royalty under rules that had been meant to attract foreign investment in the oil-and-gas sector. Cairn India with the remaining 70% stake is the operator of the block.
Among other PSU shares, NHPC, Central Bank of India, Power Finance Corporation, Engineers India, GAIL (India), MTNL, MOIL, National Fertilizers, Rashtriya Chemical and Fertilisers, Vijaya Bank, SJVN, UCO Bank and NMDC rose by 1.33% to 3.54%.
Shares of organised retailers rose on reports the government is expected to approve a proposal to open up the multi-brand retail sector in India, allowing global chains to enter by March 2012. Trent, Pantaloon Retail India, Shoppers Stop and Store One Retail rose by 0.37% to 4.97%.
Tecpro Systems rose 5.30% after the company said it has signed a pact with US-based Advanced Conveyor Technologies Inc to exclusively collaborate and jointly market their expertise on overland conveyor projects.
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 1.24%. 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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