Sensex Surges 1.4%, Bharti Airtel up 3%

Elena
21 Nov, 2006
New York City

The markets rose to a record close on Tuesday as investors bought cement and software stocks on hopes of good profit growth, with a strong debut for Info Edge also boosting sentiment. ITC led the gainers, together with Bharti Airtel and Reliance Energy. Infosys and HDFC led the decliners. Several small-caps and mid-caps also surged today. India and China signed a number of trade agreements today. The number of telecom subscribers in India will reach 250 million by end of 2007.

[R]10:30AM The Sensex surges on the back of strong buying in large-caps.[/R]
The Sensex on BSE finished 186.06 points, or 1.3% higher, at 13,616.77. The market-breadth was very strong throughout the trading session, as the ratio between advancers and decliners was five to two. As 1,794 stocks advanced on BSE, 719 declined and 70 remained unchanged. The turnover on BSE was of Rs 4,041 crore, slightly lower than Rs 4,260 crore on Monday. The turnover on NSE was of Rs 9,098.66 crore, compared to Rs 9,628.51 crore on Monday. Of the Sensex index listed 30 stocks, 27 advanced, while the rest declined.

Economic news

India and China on Tuesday signed thirteen agreements, including one facilitating two-way investment flows and another for streamlining iron ore exports from India, as part of efforts to take bilateral ties to a higher orbit.

The number of telecom subscribers in India will reach a stunning 250 million by end of 2007 as the competition in the segment intensifies with aggressive expansion plans of regional and global players, according to a report.

Most active

Debutant Info Edge led the value chart with a turnover of Rs 465 crore followed by Mahindra Gesco, and Infosys.

Advancers

Cigarette maker ITC led the advance, surging 3.3% to Rs 184.35. Hindustan Lever advanced 2.2% to Rs 248.35. Bharti Airtel was among the main gainers, rising nearly 3% to Rs 622.35. The stock hit an all-time high of Rs 625.70. Reliance Communications gained 1.8% to Rs 416.70. The stock also attained an all-time high of Rs 418.

IT large-caps were in focus for the second straight day, following reports that top Indian IT firms were after over a dozen deals on an average, the sizes of which range between $50 - $100 million. Satyam Computer advanced 3.2% to Rs 455, HCL Tech rose 3% to Rs 647, TCS rose 2.8% to Rs 1,148 and Wipro added 2.6% to Rs 569.

Tata Steel gained nearly 3% to Rs 476.85. Tata Steel has called an unscheduled board meeting on Thursday, to discuss the fallout of CSN counter-bid for Anglo-Dutch steelmaker Corus.

Shares in Info Edge, India, which runs web sites for job search and matrimony, closed at Rs 593.20, a premium of 85.3% over the IPO price (Rs 320). The stock attracted a huge volume of 78 lakh shares on BSE.

ICICI Bank rose 1.4% to Rs 872, on reports that the largest private sector bank is slated to raise $1 billion through an issue of yen-denominated bonds. Other banks also gained. State Bank of India edged 2% up to Rs 1,233. 30, Bank of India rose 1.6% to Rs 190, and Bank of Baroda moved 1% higher to Rs 258.20.

Auto shares advanced supported by the general upbeat note of the market. Car major Maruti Udyog rose 1.7% to Rs 885.25, Tata Motors gained 2% to Rs 819, Ashok Leyland added 3% to Rs 43.45 and Bajaj Auto advanced 0.4% to Rs 2,576.

Mahindra & Mahindra surged 2.7% to Rs 841, after the company announced on Monday it had signed a deal with Global Vehicles, US, to distribute sports utility vehicle of Mahindra and a pick-up in the US.

Cement shares gained on firm cement prices. ACC advanced 1.3% to Rs 1,071, Gujarat Ambuja Cements jumped 1.9% to Rs 136, and UltraTech Cement rose 1.3% to Rs 895.25. Reliance Industries moved up 1.3% to Rs 1,274, and Dr.Reddy''s added 1% to Rs 731.

Small-cap and mid-cap stocks surged, bucking the recent trend. Gainers in the small-cap and mid-cap stocks were Sika Interplant Systems soaring 20% to Rs 103.90, Shrachi Securities also up 20% to Rs 63.70, Development Credit Bank rising 20% to Rs 63.20, Mount Shivalik Industries increasing 20% to Rs 56.

Decliners

Infosys edged slightly lower in volatile trade. The scrip shed 0.5% to Rs 2,241. The software giant on Tuesday priced its sponsored ADR issue at $53.30 per ADR, a 3.2% discount to closing price of $55.2 on Monday. HDFC declined 1.03% to Rs 1,648.


[R]9:45AM Stocks opened little changed. Google rallied on hitting $500[/R]
Stocks opened little changed Tuesday, with Boeing Co. supporting the Dow after the aerospace company received a $5.5 billion order for planes from Korean Air which is buying 25 passenger and freighter aircraft. Shares in Boeing ((BA)) rose 78 cents to $89.90. The deal was seen as a victory for Boeing over rival Airbus. Google ((GOOG)) rallied after it hit the $500 level for the first time. The stock was last up $10.16, or 2.1%, at $505.09. Medtronic ((MDT)) was upgraded by a number of analysts after the company reported its quarterly profit came in above expectations. The stock jumped 7%. Some health insurance stocks posted strong gains, with shares of Sierra Health Services ((SIE)) up 5.6% after Goldman Sachs upgraded its rating on the managed health care company to neutral from sell, saying that an acquisition of the company is a possibility.

In earnings news, Deere ((DE)) posted Q4 earnings increase of 19% on improved prices and lower warranty expenses. However, the stock fell 3.3% after the company projected a sales slowdown in 2007. In the first hour of trading, the Dow fell 2.80, or 0.02%, to 12,313.74. The Standard & Poor''s 500 index was up 1.47, or 0.10%, at 1,401.97, and the Nasdaq composite index rose 0.89, or 0.04%, to 2,453.61. Bonds held steady with the yield on the benchmark 10-year Treasury note unchanged from Monday at 4.60%.


[R]9:30AM The FTSE 100 gains in afternoon trade Tuesday due to platinum stocks.[/R]
In afternoon trade, the FTSE 100 in London gained 18.2 points, or 0.3%, to 6,222.7.

Advancers

Lonmin led the advancers. The platinum miner jumped 3.6% as the precious metal surged $148, or 12%, to a record $1,401.50 an ounce. Mid-cap Aquarius Platinum gained 4.6%.

Scottish Power rose 1.2% while International Power rose 2.8% and Scottish & Southern Energy was 3.1% higher.

Takeover speculation also lifted credit checking group Experian, up 3.4%, and Gallaher, the tobacco group, 0.9% higher.

ICAP firmed 2% after the inter-dealer broker reported solid first half earnings, with revenue up 22%.

British Land advanced 1.8% after the property group announced an 11% rise in net asset value from the interim period. British Land said its rental growth was above average for the sector.

Decliners

Chilled foods group Uniq turned in a hefty loss for the first half after booking restructuring costs but said it was seeing a recovery in all three divisions. Uniq fell 3.12%.

Semiconductor products maker CML Microsystems released poor interim figures and warned that trading results for the opening half are significantly down on the same period last year. The stock gave up 12.24%.

[R]9:00AM U.S. stock futures advanced, boosted by earnings and corporate news.[/R]

Stock index futures pointed to a higher market open on Tuesday on a multibillion-dollar order for Boeing, strong earnings reports and several brokerage upgrades.

Boeing Co. ((BA)) received a $5.5 billion order for planes from Korean Air. A brokerage upgrade of software maker Adobe Systems Inc. ((ADBE)) also boosted sentiment. Wachovia lifted its rating on shares of Adobe ((ADBE)), while J.P. Morgan Securities raised its rating on Medtronic ((MDT)) after the medical device maker reported earnings above estimates. Bear Stearns raised its price target on online retailer Amazon.com ((AMZN)) to $45 from $40.

Jack in The Box ((JBX)) reported a 54% rise in Q4 net income after selling 25 restaurants in Hawaii and said it would buy 5.5 million of its shares through a modified Dutch-auction tender offer.

Nordstrom Inc. ((JWN)), operator of high-end department stores, posted Q3 profit rise of 26%, benefiting from higher margins and brisk same-store sales. The company earned 52 cents a share, up from 39 cents a share in the year-ago period, surpassing estimates of 51 cents. Total sales increased 12% to $1.9 billion while same-store sales rose 11%.

Medtronic Inc. ((MDT)), medical device maker, reported Q2 earnings decline of 59 cents a share, down 16.6% from 67 cents a share last year due to higher costs. However, revenue for the quarter jumped more than 11% to $3.08 billion from, exceeding estimates.


[R]8:00AM Stock futures were steady.[/R]
U.S. stock market futures were trading near the flat line after a six-session winning streak for the Dow Industrials Index was snapped on Monday, despite several mega merger deals totaling about $70 billion. However, Vow components Boeing and Verizon are seen as potential gainers for the blue-chip index.

Of companies in focus, Korean Air said it is buying 25 planes from Boeing ((BA)) that are worth $5.5 billion. Dow component Verizon ((VZ)) was upgraded at Credit Suisse to outperform from neutral, citing expectations of earnings increase.

On the earnings news front Deere & Co ((DE)), agricultural equipment maker, reported Q4 earnings and revenue that rose above year-earlier levels and topped analyst forecasts. The company also said production levels are expected to decline 4% in Q1 and for the year. Other companies reporting quarterly earnings today include Borders, J. Crew Group ((BGP)) and Jack in the Box ((JBX)). S&P 500 futures rose 1 point at 1,406.30 and Nasdaq 100 futures rose 2 points at 1,813.25. Dow industrial futures advanced 10 points.


[R]7:30AM Asian stocks finished higher Tuesday, HK gained on property.[/R]
Asian markets finished mostly higher on Tuesday. The Nikkei 225 Index added 0.05% to finish at 15,734.14. Tech stocks gained after an overnight advance by U.S. counterparts. Casio Computer reported a 3.4% rise and Mitsui O.S.K. Lines moved 2.8% higher.

Banking stocks mostly declined as the results for major banks in the first fiscal half showed slow recovery in their main lending business. Sumitomo Trust and Banking lost 1.2% and Mizuho Financial Group sank 2.19%.

In Hong Kong, shares closed higher on a strong performance by Chinese property stocks. The Hang Seng Index gained 0.3% to 19,008.30. China Resources Land soared 6.9% after announcing the $350.6 million acquisition of land from its parent, which Mr. Chow said could almost double the holdings in its portfolio. Guangzhou Investment rose 4.1%, on the second day after it said it was buying two large development sites in the center of Guangzhou.

The Straits Times Index in Singapore gained 0.9% to 2,796.26. Singaporean property group Keppel Land rose as much as 4% while fellow developer City Developments rose as much as 3% following an upbeat Deutsche Bank report.

In Seoul, telecommunication shares led the Korea Composite Stock Price Index, or Kospi, 0.3% higher to 1,405.90. Among telecommunication stocks, SK Telecom gained 1.4%, while its smaller rival KT Freetel moved up 0.2%. KT rose 1.3%. Korea Exchange Bank, rose 2.8% on hopes that Lone Star may propose high dividends for KEB shareholders.

Australia S&P/ASX 200 advanced 0.7% to 5,358.00 and New Zealand NZX-50 Index added 0.3% to 3,821.19. Taiwan Weighted Price Index gained 0.7% to 7,309.69, while China Shanghai Composite Index advanced 1% to 2,037.55.


[R]6:30AM European stocks advance on Tuesday helped by banks and export stocks.[/R]
European markets were higher on Tuesday. By mid morning, the FTSE 100 in London climbed 0.1% to 6,208.4, Frankfurt Xetra Dax gained 0.2% to 6,463.39, and the CAC 40 in Paris added 0.2% to 5,467.1.

Advancers

Swatch Group, the Swiss watchmaker, led the advancers after the Federal Customs Office of Switzerland said exports of watches rose 15.5% year-on-year in October. Swatch shares gained 2.9%.

Richemont, the maker of Cartier watches, gained 1% after Goldman Sachs, which rates the company conviction buy, raised its full-year earnings per share estimates.

Interdealer broker Icap Plc announced that its first-half adjusted profit rose 23% to 120.8 million pounds, with revenue up 22% to 542.8 million pounds after growth in the interdealer market, in particular in energy, transport, credit and equity derivatives products. Profit for the year is expected to be in line with analysts'' expectations, it added.

Banca Monte dei Paschi di Siena, the Italian bank, rose 2.1% after French insurer CNP Assurances said it was interested in bidding for a stake in MPS Vita, Monte Paschi’s insurance division. Shares in CNP were 0.6% higher.

British Land led a rally in property stocks after it reported a better-than-expected rise in net asset value, an important performance measure in the sector. Its shares gained 0.9%. Stock exchange operator Deutsche Boerse increased 1.6% following recent M&A moves in the sector.

Decliners

On the downside, German tyre maker Continental fell 1.4% after loss-making Russo-Dutch rival Amtel-Vredestein announced the two companies were in talks about a possible joint venture.

Oil and gold

Crude oil gained on trader speculation that rising demand will cut U.S. fuel inventories and the OPEC may agree to lower production for a second time in two months. Crude oil for January delivery rose as much as 40 cents, or 0.7%, to $59.20 a barrel in after-hours electronic trading on the NYME. It was at $59.05 in early trading in London. Brent crude oil climbed as much as 40 cents, or 0.7%, to $59.38 a barrel on the ICE Futures exchange. Gold traded in London at $625.00 bid per troy ounce, up from $624.10 late Monday.


Currencies

The U.S. dollar was lower against other major currencies in European trading Tuesday morning. The euro was quoted at US$1.2817, up from $1.2813 late Monday. The British pound was quoted at $1.8981, up from $1.8966. The dollar bought 118.01 Japanese yen, down from 118.09.