Sensex up 1.1%, Reliance Surges

Elena
10 Nov, 2006
New York City

A decline in inflation rate and upbeat industrial production figures led the market to a new high. The Indian market was also spurred by sustained buying in private bank stocks and index large-caps such as Reliance Industries, which was the most-active stock today. ICICI Bank, BHEL, HDFC Bank, Gujarat Ambuja were the other large-cap advancers. Cipla, Satyam led the decliners. Industrial production in India advanced 11.4% in September from a year earlier.

[R]10:30AM The Sensex gained 145 points supported by Reliance, banks.[/R]
The Sensex on BSE finished 145.42 points, or 1.11%, higher to end at 13,295.36. The market-breadth remained strong. As 1,274 shares advanced on BSE, 1,255 declined and 88 stocks were unchanged.. From the Sensex stocks, 23 advanced, while the rest declined. The turnover on BSE was Rs 4,541 crore, higher than Rs 4,263 crore on Thursday. The turnover on NSE was Rs 8,232.44 crore, higher than Rs 7,837.47 crore on Thursday.

Economic news

Industrial production in India grew 11.4% in September from a year earlier on strong manufacturing and electricity output, government data showed on Friday. Output had risen at 9.9% in August. Manufacturing production advanced 12% in September from a year earlier, compared with 11.1% in August.

Annual wholesale price index of slipped to 5.09% (as on October 28) from the previous week 5.41% due to a fall in the prices of manufactured products.

Most-active stocks

Reliance Industries was the most-active stock on BSE with a total turnover of Rs 338.09 crore. Indiabulls Financial Services followed.

Advancers

Index heavy Reliance Industries jumped 2.13%, to Rs 1,288.25, on a volume of 26.62 lakh shares. Reliance Industries announced on Thursday, its board had approved raising up to $2 billion through loans and bond issues, or a combination of fund-raising instruments.

Banking stocks surged on renewed buying. Private sector ICICI Bank led the advancers, up 4.35% to Rs 834, after its ADR gained more than 3% on the NYSE on Thursday. It had hit an all-time high of Rs 838, while its low was Rs 795. Centurion Bank of Punjab surged 7.33% to Rs 28.55, HDFC Bank gained 2.54% to Rs 1,043, SBI edged up 0.24% to Rs 1,133.20, Kotak Mahindra Bank rose 1.68% to Rs 361.15, Union Bank of India notched up1.63% to Rs 130.65 and Union Bank of India advanced 1.59% to Rs 130.60.

Software large-cap Infosys gained 0.51%, to Rs 2,148.90. The stock advanced for the fourth consecutive day today, after shareholders on Tuesday approved a sponsored ADR issue. Aluminium maker Hindalco Industries gained 0.25% at Rs 183.20, and its state-run counterpart Nalco was 0.62% higher, to Rs 200 after three-month aluminium futures rose 4%. Hindustan Zinc advanced 1.21% to Rs 964.45, as three-month zinc futures hit a record high of $ 4,545 a tonne on the LME, on Thursday.

Decliners

Cipla led the decline, down 1.29% to Rs 267.75, on a volume of 2.28 lakh shares. Satyam fell 1.18 per cent to Rs 422.90. Satyam announced today that it has signed a seven-year contract with airline Qantas. Bajaj Auto lost 0.37% to Rs 2,595. It has ventured into the $6 billion Indonesian bike market with its flagship model, the 180 cc Bajaj Pulsar.

Oil refining and marketing companies plunged after the U.S. crude oil futures in Asian trade touched $61 a barrel. HPCL declined 2.07% to Rs 299.65, BPCL lost 2.10% to Rs 364 and Indian Oil Corporation edged lower 0.76% to Rs 485.

Other news

Samsung India Electronics today signed a memorandum of understanding with the Tamil Nadu government for setting up two projects - an SEZ unit and a domestic tariff area unit - with a total investment of Rs 450 crore.

Tata Motors has commenced in-factory trials of its upcoming small car, widely referred to as the Rs 1-lakh car.


[R]9.45AM Stocks opened modestly higher on weaker oil and a $13 B contract won by Boeing.[/R]
A pullback by the oil price pushed stocks modestly higher at opening. Light, sweet crude dropped 45 cents do $60.71, helping oil-sensitive airline stocks to recover from recent losses. Another boost for the market was news that Boeing ((BA)) won out over Lockheed Martin Corp. and United Technology Corp.''s Sikorsky division in securing a contract to build U.S. Air Force helicopters. The contract is worth about $13 billion.

Among Friday’s movers, Bausch & Lomb ((BOL)) dropped 3.5% after the company said 2006 and 2007 results would be at the low end of its prior estimates due the recall of its ReNu with MoistureLoc contact-lens solution. Tanox ((TNOX)) surged 44% after Genentech said it plans to acquire the company for $20 per share in a $919 million deal, a 47% premium to the stock''s closing price.

On the earnings news front, California Pizza Kitchen ((CPKI)) said it earned 34 cents a share in Q3, up from 28 cents a share, in the year-ago period on 15% revenue increase and 5.6% same store sales rise. Pacific Sunware of California ((PSUN)) reported Q3 net income decline of 13 cents a share, compared with 54 cents a share last year. The retailer climbed 9% in early trading. In the first hour of trading, the Dow Jones industrial average rose 15.69, or 0.13%, to 12,118.99. The Standard & Poor''s 500 index was up 1.89, or 0.14%, at 1,380.22, and the Nasdaq composite index was up 5.69, or 0.24%, at 2,381.70.


[R]9:30AM London trades flat in early afternoon Friday despite bid speculation.[/R]
In early afternoon, the FTSE 100 in London was broadly flat at 6,231.3.

Advancers

Cairn Energy was among the biggest large-cap gainers on Friday as a leading bank said the IPO of the Indian operations oil group could lead to a re-rating. Cairn was the biggest blue-chip gainer, up 4.9%.

In a busy day for the resources sector, Lonmin advanced 8.6% as Morgan Stanley upped its price target in a bullish note on the platinum sector.

Anglo American, the mining group, rose 2.8% as one of the richest men in China took a stake in the company.

J Sainsbury gained 1.6% - its highest level since 1999 - amid continued talk of private equity interest for the UK third largest grocer.

Broadcaster ITV gained of 0.2% despite scepticism about how a proposed merger with NTL, the cable group, would work.

Decliners

AstraZeneca fell 2.8% and GlaxoSmithKline lost 1.8%. Utilities also lost ground at the end of a week of takeover speculation in the sector. Scottish Power this week said it had received an approach, with Iberdrola of Spain the suitor.

Severn Trent fell 1.7% and International Power slipped 1.6%. Whatman slumped 12.6% as the laboratory supplied group said that its earnings would fall short of expectations.


[R]9:00AM Stock futures pointed to a higher opening on retreating oil.[/R]
U.S. stock futures pushed higher on Friday, helped by retreating oil prices ahead of a light trading session due to the Veterans Day holiday. Better-than-expected earnings results from Dow components Walt Disney and American International Group also generated positive sentiment.

Walt Disney and American International Group reported earnings that more than doubled. Walt Disney Co. ((DIS)) said that its Q4 net income more than doubled, driven by strong box-office results and growth in its amusement parks and media networks. Company’s net income rose 36 cents a share, up from 19 cents last year, beating estimates of 34 cents. Quarterly sales climbed to $8.78 billion. American International Group ((AIG)) reported surging Q3 net income as the insurance giant avoided the big hurricane losses last year. The insurer posted Q3 net income rise of $1.61 a share, an improvement from profit of 66 cents a share last year. The quarterly earnings exceeded expectations of $1.42 a share. Adjusted net income came in at $1.53 a share.

Among other companies releasing quarterly profit, Nvidia ((NVDA)) moved higher after the graphics-chip maker''s quarterly earnings and revenue beat analyst forecasts. In corporate news, Genentech ((DNA)) agreed to pay $919 million, or $20 a share, for Tanox Inc., a developer of therapies based on monoclonal antibodies. S&P 500 futures tacked on 1.80 points to 1,385.80 and Nasdaq 100 futures advanced 3.50 points to 1,754.00. Dow industrial futures gained 7 points to 12,148.


[R]7:30AM Asian markets end mostly lower on Japanese exporters and banks.[/R]
Asian markets were mostly lower on Friday. The Nikkei 225 Stock Average in Japan slipped 0.53% to 16,112.43. In Japan, shares dropped after the government said September core machinery orders fell 7.4% on month, worse than the consensus of economists for a 2.3% rise.

Exporter and banking stocks closed mostly lower, as Toyota Motor and Sony led declines among large-caps stocks, while Mitsubishi UFJ Group declined on data showed the Japanese bank lending advanced at a slower pace in October than the previous month. Toyota fell 1.8%, Sony lost 1.5% and Mitsubishi UFJ Group fell 0.7%.

Hong Kong Hang Seng Index was little changed at 18946.26. In Hong Kong, profit-taking in HSBC and China Mobile pulled the benchmark index slightly lower. HSBC slipped 0.4% and China Mobile fell 0.8%. Shares of Lenovo Group were down 9% after the third-largest PC maker in the world by sales reported quarterly net profit fell 16%. PetroChina, the biggest oil producer in the country, added 0.4%.

The China Enterprises Index of Hong Kong-listed shares in mainland-incorporated companies advanced 0.6% to 7959.01. The benchmark Shanghai Composite Index, which follows both Class A and Class B shares, ended down 0.7% at 1883.35. South Korea Kospi fell 0.3% to 1395.73. The South Korean stock market ended lower on profit-taking mainly in construction stocks, as the index approached the key psychological resistance level of 1400.

In Taiwan, the Weighted Price Index rose 0.3% to 7174.20 on late-session buying. Elsewhere around the region, Australia''s S&P/ASX 200 was fractionally higher, up 0.1% to 5434.50. Australian-listed oil company Woodside Petroleum surged 3.4% while mining and energy producer BHP Billiton rose 0.7%.


[R]6:30AM Pharma stocks and higher oil lead European stocks lower on Friday.[/R]
European markets were lower on Friday. By mid morning, the FTSE 100 in London lost 0.5% to 6,201.8, while Frankfurt Xetra Dax fell 0.7% to 6,316.5, the CAC 40 in Paris shed 0.5% to 5,422.43.

Decliners

Pharma stocks led the decline. Bayer lost 0.3%, Novartis declined 1% and Roche shares dipped 0.3%. Roche decline was limited by an upgrade to overweight at J.P. Morgan, which argued that the quality of its drugs means it can keep pricing power. But it was AstraZeneca in Britain which was was worst hit, down 2.7%.

Hermes, the French luxury goods group, fell 3.2% on profit taking after reporting a 6.2% rise in like-for-like sales in the third quarter. German sportswear maker Adidas fell a further 2.4% following the unexpected profit warning Thursday. Deutsche fixed-line peers were also weaker. KPN, the Dutch group, lost 1%, while Telekom Austria fell 1.5%.

Electricite de France edged 0.4% lower in Paris after it said that, although sales in France rose 7.4% to 22.90 billion euros, sales in the rest of the world slipped 12% to 1.83 billion euros after asset sales.

Advancers

Oil prices stayed over $60 a barrel in electronic trade on Friday, helping Royal Dutch Shell and Eni to gain some ground. Eni, the Italian oil and natural gas group, rose 0.4%, while Royal Dutch Shell added 0.10%.

French chemicals group Rhodia rose 2.3% after it swung to a net profit of 71 million euros helped by a 34 million euro gain from deferred tax assets.

Oil and gold

Oil prices steadied Friday after jumping above $61 a barrel the previous day in reaction the leadership change in the U.S. Congress and amid continued uncertainties about OPEC production cuts. The contract traded at $60.32 a barrel in early trading in London, near a two-week high. Brent crude fell 84 cents to $60.48 a barrel on the ICE Futures exchange.

Gold opened Friday at a bid price of $634.30 a troy ounce, up from $625.20 late Thursday.

Currencies

The euro continued to edge up slightly against the U.S. dollar on Friday despite better-than-expected U.S. trade deficit figures. In morning trading, the euro bought $1.2873, up from $1.2824 late Thursday in New York. Among other currencies, the British pound rose to $1.9117 from $1.9055 after the Bank of England raised interest rates to 5%, as was expected. The dollar was down slightly to purchase 117.43 Japanese yen from 117.97 yen.