Sensex Up 47%

Elena
29 Dec, 2006
New York City

The Indian benchmark index has gained 47% over the year, one of the best performing emerging markets in the world. Of the 3,000 daily traded stocks only 25% managed to beat the rise in Sensex and 50% of the companies lost value in the year. Auto sector index rose 31%, banks gained 42% and cement sector rose more than 70% for the year. For the day, stocks ended lower.

[R]10:30 AM The Sensex declined on Friday on last-minute selling pressure.[/R]

The Sensex on BSE finished 59.43 points, or 0.43%, lower to 13,786.91. Despite the loss, the market-breadth was strong as 1,386 shares advanced, 1,233 shares declined and 71 shares were unchanged. Of the 30 stocks in the Sensex , 22 declined while the rest advanced. The turnover on BSE was Rs 3,419 crore, lower than Rs 4,193 crore on Thursday. The turnover on NSE was Rs 7,556.12 crore, much lower than Rs 9,966.62 crore on Thursday.

Economic news

The annual Wholesale Price Index in India advanced to 5.43% in the week ending December 16, higher than the previous week increase of 5.32%.

The best performing large-cap stocks in the year 2006 were cement maker ACC Ltd. and Grasim Industries which gained more than 100%, while Reliance Industries Ltd. advanced almost 89% over the year.

In trade today

Nissan Copper IPO was the most-active stock with a turnover of Rs 556 crore followed by Indiabulls, Tech Mahindra and Reliance Industries.

Advancers

Tata Steel led the advancers, gaining 1.76% to Rs 484.90 on hopes that there will be further consolidation in the steel industry. Ratan Tata, Tata group chairman, said in an interview that the Tata group sees a limit to how far it can stretch to buy Anglo-Dutch steel-maker Corus Group Plc without any damage done to shareholders.

Dr Reddy’s Lab advanced, ending 1.43% higher to Rs 811 on the final approval from the U.S. Food and Drug Administration to make generic drug for cholesterol tablets. ACC, cement maker, added 1% to Rs 1,085 and traded between Rs 1,072 and Rs 1,095.

Nissan Copper IPO finished at Rs 128.80, up 230% from the IPO price of Rs 39 on a volume of 7 crore shares.


The capital goods sector surged today, as companies like BEML gained 7.63% to Rs 1,015.60, Areva T&D rose 5.12% to Rs 1,043 and Jyoti Structures surged 5.10% to Rs 132.45.

Decliners

Hindustan Lever led the decliners, slipping 1.82% to Rs 216.30 while Reliance Communications was down 1.34% to Rs 471. Reliance Communications announced on Thursday, that it was still mulling over the opportunity to buy a controlling stake in Hutchison Essar. The acquisition cost may be as high as $21 billion.

Other major decliners included, Tata Motors 1.36% lower to Rs 893 and Gujarat Ambuja down 1.15% to Rs 141.90, while ONGC shed 1.20% to Rs 867. Reliance Industries dipped 0.52% to Rs 1,270 on 7.45 lakh shares. It hit an intraday high of Rs 1,288.40.

Stocks of private sector banks saw fresh buying interest but state run banks closed lower. Punjab National Bank shed 1.30% to Rs 506, Indian Overseas Bank came off 0.30% to Rs 111.70, Bank of Baroda slipped 1.82% to Rs 240.15 and HDFC Bank was down 0.86% to Rs 1,069.70. State Bank of India advanced, though, up 0.75% to Rs 1,245.35, Kotak Mahindra Bank was 5.35% higher to Rs 399.90 and Bank of India edged 0.80% higher to Rs 207.


[R]9:30 AM London declined on Friday in thin trade on weak gas and oil stocks.[/R]
The FTSE 100 Index in London shed 20.1, or 0.3%, to 6220.80.

Advancers

Property groups shone again on their movement to real estate investment trust status on January 1, which should yield tax benefits. Persimmon, Land Securities and Hammerson were higher, 1.06%, 0.26% and 0.13% respectively. Amvescap Plc, owner of Aim and Invesco funds, gained 1.5%.

Decliners

BP, the second-largest oil company in Europe, shed 0.7%. Shell slipped 0.4%. The decline can be attributed to crude oil drop due to milder-than-average U.S. temperatures which outweigh concern about diminishing inventories in the US.

Vedanta Resources, the largest copper and zinc producer of India, gave up 0.3%. Copper futures in Shanghai were virtually unchanged on worries that high stocks and slowing economic growth in the U.S. and China will extend a three-month losing streak.

Scottish & Southern Energy declined 1.58% and financial stocks Northern Rock and Royal & Sun Alliance also declined, 0.76% and 1.13% respectively.

PartyGaming Plc dropped 0.8%. The biggest Internet poker company in the world has struck a deal to buy gambling Web sites from Empire Online Ltd. and Intercontinental Online Gaming Ltd.


[R]9:00AM Stock futures pointed to a flat start, with Apple providing help.[/R]
U.S. stock market futures traded near the unchanged mark, as an advance by Apple Computer offset worries about an end-of-year sell-off. Trading volume was expected to be light on Friday, as most of the institutions are not going to trade. Investors expect the three major U.S. averages to post double-digit percentage gains for 2006, as it has been a very good year with generally strong economy.

Apple ((AAPL)) jumped 4% to $84.15 before market opening as the company said in a regulatory filing with the SEC that CEO Steve Jobs was aware of certain favorable stock options grant dates, but did not personally benefit from improper option grants.

In other corporate news, AT&T ((T)) offered additional concessions on Thursday to the Federal Communications Commission to win approval for its $85 billion acquisition of BellSouth Corp. ((BLS)). Shares of Alltel Corp., the fifth-largest U.S. wireless operator, rose 3.2% on reports that private-equity firms are exploring the idea of a leveraged buyout for the company. Exxon Mobil Corp. ((XOM)) filed a legal appeal challenging Alaska''s decision to start revoking leases for a natural gas field in the North Slope of the state. Standard & Poor''s 500 futures were up 0.2 points, about even with fair value. Dow Jones industrial average futures were down 8 points, and Nasdaq 100 futures were up 3.5 points.


[R]8:00AM Apple said CEO Jobs knew of favorable grant dates.[/R]
Apple Computer ((AAPL)) said that the special committee, appointed to carry out the investigation of its stock option granting practices, concluded that there was no evidence of misconduct by current management. However, it did find that CEO Steve Jobs was aware or recommended the selection of some favorable grant dates but he didn’t personally benefit from them. In a joint statement, Al Gore, chair of the special committee, and Jerome York, chair of Apple''s audit and finance committee, said the board is confident that the company has solved the problems relating to the restatement and has ‘complete confidence’ in Steve Jobs and the senior management team.
The maker of the iPod music player and Macintosh computers is one of the nearly 200 companies that were investigated for backdating stock options. The company initiated its own stock options probe in June and delayed its quarterly report for the period ending July 1 and its annual report for the fiscal year ended Sept. 30. Apple said on Friday that its options mishandling will result in an additional noncash charge of $84 million. The stock rose 4.5% in pre-market trading.
[R]7:30 AM Asian markets finished higher with Japan, Australia leading advance.[/R]
Asian markets ended higher on Friday. Japanese benchmark Nikkei 225 stock index ended up 0.01% to finish a half-day session at 17,225.83. Exporters such as Matsushita Electric Industrial, Toyota Motor and Nissan Motor led the advance, as the yen recent weakness buoyed traders to buy autos and electronics. Matsushita Electric gained 1.93%, Toyota reported a 0.51% gain and Nissan added 0.85%. Steelmakers also finished higher, with Nippon Steel gaining 1.03%. Canon, the largest maker of digital cameras in the world, rose 0.8%.

In Australia, stocks reached a record high as traders squared positions with some month-end buying in large-cap stocks that did not do well in the market during the year. The benchmark S&P/ASX 200 index gained 0.2% to end at 5,669.9 on strong gains in financials and property trusts. Westfield Group, the largest operator of shopping malls in the world, made the biggest contribution to the overall market, increasing 1.1%.

In China, shares surged to a new record high for a fifth consecutive day, boosted by sharp increase in bank and airline stocks. The Shanghai Composite Index advanced 4.2% to close at 2,675.47. Bank and airline stocks were lifted by an increase in the yuan against the dollar. Air China and China Southern Airlines advanced by the daily limit of 10%, while Shanghai Airlines rose 8.5%. Bank of China soared 9.9% and Industrial & Commercial Bank of China added 6%. BOC has gained 36% and ICBC 31% this week.

Hong Kong bucked the uptrend, closing lower on profit-booking in Chinese banks and index large-caps. The Hang Seng Index shed 0.2% to 19,970.88, while the Weighted Price Index of the Taiwan Stock Exchange advanced 1.2% to end at 7823.72.


[R]6:30 AM European markets were almost flat Friday as traders take to the sidelines.[/R]
European markets were nearly flat on Friday. By mid morning, London’s FTSE 100 shed 0.2% to 6,226.8, Frankfurt’s Xetra Dax was virtually unchanged at 6,609.2 and the CAC 40 in Paris gained 0.1% to 5,539.64.

Advancers

ABN Amro was in early focus. Its shares moved 0.1% higher after it said late Thursday it was reducing 900 jobs at its LaSalle operations in Chicago. ABN added that the move was part of a plan to cut expenses and enhance the operational performance of businesses in mature markets such as the U.S.

Although ABN Amro was much talked about, it was Suez which led the gainers, up 3.1%, following market talk of a bid for the French utility. Rumors that French billionaire Francois Pinault was considering a 70 billion euros bid spurred little response from Suez, save for declining to comment on market speculation.

Ferrovial, Spanish construction group, was another advancer, gaining 1.2% as it announced on Thursday night it had sold its property division for 1.6 billion euros to unlisted Promociones Habitat.

Decliners

As oil prices failed on Thursday to respond to the much larger than expected depletion in US crude stockpiles had a negative impact on energy stocks. BP shed 0.8%, while Royal Dutch Shell dipped 0.8 %. Repsol of Spain slipped 0.7%.

Credit Agricole was another decliner in Paris, shedding 0.4%, as it said it was about to issue 4 billion euros in cheaper shares to finance the acquisition of 663 Italian bank branches, including 202 branches of Banca Intesa.

Oil and gold

Oil prices retreated toward $60 a barrel on Friday on account of the unusually mild weather which reduced trade. U.S. crude oil futures shed nine cents to $60.44 a barrel in early trade in London. Brent crude gave up two cents to $60.65. Gold opened Friday at a bid price of $634.10 a troy ounce, up from $633.50 late Thursday.

Currencies

The euro traded a little higher on Friday versus the dollar, which slipped in spite of better-than-expected U.S. economic data the previous day. The euro bought $1.3163 in morning European trading, up from $1.3146 in New York late Thursday. The British pound, however, slipped to $1.9613 from $1.9628. The dollar was little changed against the Japanese yen, slipping to 118.90 yen from 118.93 yen