Indian Market, New Record

Elena
18 Apr, 2006
Mumbai

Sensex in India scaled more than 2% advance for the second day in a row after the Reserve Bank of India left the interest rates unchanged. Prime Minister indicated that annual GDP growth of 10% is a realistic target. Strong earnings from software giant TCS propelled IT stocks. Banking and cement stocks rose for the second day in a row.

[R]8:30AM Sensex sharp rise was supported by earning and rates.[/R]
Sensex in Mumbai rose for the second day in a row to a new record. Sensex advanced 2.45% or 289 points to close at 11,821.57. The daily turnover rose to $1.1 billion from $800 million in previous session. Of the 30 stocks in Sensex 22 rose and 8 fell at close and 1400 stocks advanced and 1,050 stocks declined. Banking sector got a strong boost as the Reserve Bank of India left its short-term interest rate unchanged at 5.5% surprising the market. Market had counted a rise of 25 basis points. Banking sector index on BSE rose 1.43% on the news. ICICI ((IBN)) rose 1.2% to Rs. 587, HDFC Bank gained 1.8% to Rs. 830 and UTI Bank rose 5.4% to Rs. 353. Public sector banks rose including a gain of 0.9% in State Bank of India and 1.5% in Punjab National Bank.

After two days of rising the Indian market has gained 5% on strong earnings from software exporters and cement companies and general optimism surround the economic growth. Software leader TCS reported Q4 revenue jump of 44% to $900 million and earnings rise of 79% to $180 million. The company declared stock split of two for one and indicated that is in the process of negotiating an outsourcing contract of $500 million. TCS jumped 5.6% and closed at Rs. 2,010. Other software companies Wipro ((WIT)), Satyam ((SAY)) and Patni rose 6%, 4% and 2.5% respectively. Second tier cement company stocks rose for the second day in a row. Deccan Cement and Madras Cement closed up 7.5% and Mysore Cement, Chettinad Cement, Shree Cement and Saurashtra Cement rose 5%. Gujarat Ambuja lost 2% at close. Infrastructure company, L&T rose 4% to Rs. 2,635 on the news that the company has booked an order of $115 million from Kuwait Aviation to build a fuel complex. Morarjee Realty jumped 5% after it reported Q4 earnings jump of fifteen-fold to $10 million on revenue growth of 217%.


[R]8:15AM European averages traded mixed at mid-day.[/R]
European markets traded mixed at mid-day, resuming trading after the four-day break. Market sentiment was hurt by surging commodities prices and disappointing first-quarter earnings report from Philips Electronics which declined after reporting quarterly profit at the low end of forecasts. Sharply higher oil prices sparked investors’ worries ahead of the earnings season. However, stocks in the U.K. advanced, lifted by mining and oil companies like Total, BP, and Royal Dutch Shell which advanced more than 1%. The German DAX 30 dropped 0.6%, the French CAC 40 edged down 0.2%, while London FTSE 100 climbed 0.4%.


[R]7:45AM Asian markets closed higher, led by the Nikkei.[/R]
Asian-Pacific benchmarks advanced across the region, led by the Nikkei which climbed 1.4% to 17,232.86, boosted by strong financial and brokerage stocks, as well as mining and energy shares. Financial stocks stood out among gainers with Mizuho Financial Group rising 2.9% and Mitsubishi UFJ Group gaining 1.6%. Shares of oil and mining shares advanced, benefiting from surging commodities prices with Nippon Mining Holding moving higher by 5.8%. Hong Kong’s Hang Seng was sharply higher at 0.9%, lifted by major China-based companies and speculations that mainland investors will be given access to securities outside their home town. Among gaining stocks, China Mobile rose 3.4%, CNOOC gained 3.2%, and Synopec climbed 4.3%. Australia’s All Ordinaries was another sharp advancer, rising 1.3% on mining companies like BHP Billiton, up 2.3% and Santos, up 2.6%. South Korea’s Kospi added 0.3%, supported by Samsung Electronic.