Sustained Rally of 6% in India

Elena
17 Aug, 2006
Mumbai

The Sensex Index recorded seven straight days of gains, advancing more than 6% in that period. Strong trading in blue-chip stocks helped the market finish higher. The trading was highly volatile and the market-breadth was negative due to strong buying in small-cap and mid-cap stocks. Auto, engineering, and telecom sectors led the advancers, while aluminum, banking, energy and steel stocks dropped the most.

[R]10:30AM Sensex keeps gaining for the seventh day in a row.[/R]
The Sensex on BSE advanced 29.17 points, or 0.25%, to close on 11,477.48. The benchmark index moved in a range of 173 points. The market breadth was weak with small-cap and mid-cap stocks declining on profit-booking. Only 871 shares advanced, while 1,603 declined and 65 stocks remained unchanged. The daily turnover on BSE came to Rs 3,835 crore, higher than Wednesday’s Rs 3,455 crore. Of the thirty stocks in the index, 15 stocks advanced and 15 stocks declined.

Reliance Communication led the gainers, rising 4.55% to Rs 297.85 on a heavy volume of 4.3 million shares. It traded in a range of Rs 281 and Rs. 289. The other leading gainers included, Dr Reddy’s, gaining 2.70% to Rs 1,490, HLL, gaining 2.20% to Rs 235.50 and Tata Motors, surging 3% to Rs 841. Reliance Industries advanced 1.63% to Rs 1,062 on 2.3 million shares, in the afternoon trading in a range of Rs 1,038 and Rs 1,078.

Reliance Energy, Tata Steel, ONGC, and Hindalco led the main decliners. Reliance Energy sank 3.55% to Rs 462, Hindalco lost 2.72% to Rs 164.40, ONGC plunged 2.20% to Rs 1212 and Tata Steel was off 2.95% to Rs 517.50.

Metal stocks traded lower as they faced wave of selling. The decliners in the sector were led by, Tata Steel and SAIL which declined 2.06% to Rs 76.15, Essar Steel traded down 3.20% to Rs 34.90, Tata Sponge lost 2.86% to Rs 108.80 and Hindustan Copper dropped 2.6% to Rs 96.35.

Sugar stocks witnessed sustained profit-taking as product prices fell. Shares of KM Sugar were down 6.05% to Rs 49, Sakthi Sugars lost 5.80% to Rs 140, Oudh Sugar plunged 5% to Rs 119.65, Dwarikesh Sugar slipped 4.40% to Rs 122.50, Bannari Amman Sugars moved back 3.85% to Rs 975, Uttam Sugar slid 6.05% to Rs 179.50 and Bajaj Hindustan declined 3.25% to Rs 335.20.

Other non-constituent stocks that advanced were Shree Precoated Steels soaring 9.30%, to Rs 175.85 on a high volume of 6.81 lakh shares after it said that it plans to raise Rs 1,163 crore by issuing securities. Jagran Prakashan advanced 2.65%, to Rs 307 in the wake of the news that Ireland''s Independent News & Media had approached the Securities and Exchange Board of India, SEBI, to increase its stake in the Indian firm by up to 3%. Mahindra & Mahindra advanced 1.50% to Rs 644 on 2.43 lakh shares. The company intends to introduce another new vehicle after Ingenio''s launch in 2008.

Infrastructure Development Finance Company was the most traded stock on BSE with a turnover of Rs 256.14 crore. It gained 2.72% to Rs 58.60 supported by three block deals of 1.4 crore shares each, of which two were transacted at Rs 60 per share, while the rest was struck at Rs 57.90 per share.


[R]9:45AM Stocks moved lower at opening on profit taking.[/R]
Stocks declined at opening Thursday, as traders turned to do some profit taking after three straight sessions of gains. Yet, falling oil prices and better-than-expected earnings report from Hewlett-Packard and Sears Holding generated some positive sentiment. Light, sweet crude fell $1.13 to $70.76 due to strong stockpiles and a cooling conflict in the Middle East. Hewlett-Packard''s ((HPQ)) earnings impressed with their strength, unexpected from a technology sector under pressure. Sears ((SHLD)) which posted 83% profit jump, provided some relief for investors concerned about the retail sector. In the first hour of trading, the Dow Jones industrial average fell 6.73, or 0.06%. The Standard & Poor''s 500 index lost 1.64, or 0.13%, and the Nasdaq composite index dropped 5.49, or 0.26%.

[R]Initial jobless claim fell more-than-expected.[/R]
Thursday morning, the Department of Labor released its report on initial jobless claims in the week ended August 12. The report showed that jobless claims fell more than economists had been expecting. The report showed that jobless claims fell to 312,000 from the previous week''s revised figure of 322,000. Economists had expected jobless claims to fall to 315,000 from the 319,000 originally reported for the previous week. At the same time, the less volatile four-week moving average rose to 311,250 from the previous week''s revised average of 309,500. The report also showed that continuing claims in the week ended August 5 rose to 2.507 million from the preceding week''s revised level of 2.473 million.


[R]8:00AM Stock futures pointed to a flat opening.[/R]
U.S. stock futures pointed to a flat market opening following three consecutive sessions of gains. Tech stocks are expected to rise after Hewlett-Packard ((HPQ)) reported Q2 profit jump to $1.38 billion, or 48 cents a share, compared with $73 million, or 3 cents a share a year ago due to strong sales in its printing and personal-computer businesses. Revenue rose 5.2% to $21.89 billion. Revenue from HP''s printer division grew 5% to $6.2 billion, while sales of laptops increased 14%.Software sales were particularly strong, with 30% year-over-year growth. The company will likely complete the $4.5 billion acquisition of management software company Mercury Interactive Corp. in the current quarter. Hewlett-Packard Co. CEO Mark Hurd said that an aggressive cost-cutting campaign would start in the current quarter, with several thousand employees losing their jobs. In addition, the company authorized a buyback of up to $6 billion worth of company stock. Dell Computer Inc. ((DELL)) is scheduled to report quarterly results in the late afternoon.

Among retailers, releasing quarterly results, Sears Holding Corp. ((SHLD)) posted Q2 net income jump to $1.88 per share from 98 cents per share a year ago due to improved margins. Apparel retailers will also be in the spotlight, after Children''s Place Retail Stores Inc. ((PLCE)) posted a wider Q2 loss and New York & Co. ((NWY)) reported lower profit. Gap Inc. ((GPS)) and department store chain Nordstrom ((JWN)) are set to report after the closing bell. S&P 500 futures were down 0.7 points, slightly below fair value. Dow Jones industrial average futures rose 5 points, and Nasdaq 100 futures lost 1.25 points.


[R]7:30AM Exporters advanced in Asia, while oil-related stocks plunged[/R]
Asian markets were mixed on Thursday. Nikkei 225 Average in Japan shed 0.31% to 16,020.84. Nissan Motor gained 2.36%, leading auto stocks for the second running. Sony Corp. Gained 0.39% to break a two-day losing streak. Daiwa Securities Group surged 4.48% as recent gains by the Nikkei boosted hopes that trade would pick up.

Hong Kong''s Hang Seng Index closed down 0.45% at 17,373.05. Lenovo Group rose 5.6% as fellow PC maker Hewlett Packard posted a strong quarterly profit. South Korea''s Kospi index advanced nearly 1% on large gains by chip-maker Hynix Semiconductor and Samsung Electronics. Australia''s S&P/ASX 200 advanced nearly 2% as Qantas Airways and BHP Billiton both advanced. while China''s Shanghai Composite shed 0.8%.

[R]6:30AM European markets advance despite declining oil shares.[/R]
European markets were higher by mid-morning on Thursday. London’s FTSE 100 added 0.2 per cent to 5,909.2, while Xetra Dax in Frankfurt was 0.2% higher at 5,823.21 and in Paris, the CAC 40 was 0.2% higher at 5,136.57. Swiss insurance firm Zurich Financial Services Group, Ciba Specialty Chemicals and NYSE specialist Van der Moolen were the chief movers on the market.

Zurich Financial Services shed 2.2% in the wake of its statement that its first-half net profit rose but premiums declined. Ciba Specialty Chemicals jumped 5.6% after it reported an increase in adjusted profit and said that it would cut jobs. Van der Moolen advanced 4.3% after its second-quarter revenue increased 49% to 40.5 million euros.

Oil prices continued to drop Thursday as international traders responded to U.S. government data showing that crude oil stockpiles are above average. Light sweet crude for September delivery fell 47 cents to $71.42 a barrel in electronic trading, while the Brent crude for October delivery was down 39 cents at $72.44 a barrel on London''s ICE Futures exchange. The euro was higher against the dollar Thursday, extending its gain after U.S. inflation data eroded the likelihood of higher U.S. interest rates.

The euro rose against the U.S. Dollar. The European currency bought $1.2844 from $1.2836 late Wednesday in New York. It had risen above $1.2850 on Wednesday for the first time in a week. The British pound advanced to US$1.8964 from US$1.8948 in New York, and the dollar slipped to 115.59 Japanese yen from 115.87.