The market opened on a firm note on positive Asian stocks. It was hovering near the day’s high after hitting fresh intraday highs in morning trade. It surged to hit fresh intrday highs in mid-morning trade. It extended gains in early afternoon trade. Market extended gains to strike fresh day’s high in afternoon trade. It was hovering near the day’s high in mid-afternoon trade. It surged to hit fresh intraday highs in late trade.

The headline inflation eased slightly in January on some moderation in manufactured products. The wholesale price index (WPI), India’s main inflation gauge, rose 8.23% in January from a year earlier. The index rose 8.43% in December from a year earlier. Food prices in the WPI index jumped 15.7% in January compared with 13.6% in December. As per provisional figures, foreign funds sold shares worth Rs 537.71 crore while domestic funds bought shares worth Rs 519.67 crore on Friday, 11 February 2011.

The government expects headline inflation to ease to 7% by end March, Finance Minister Pranab Mukherjee said on Monday, matching other government forecasts.

The Q3 December 2010 results season is drawing towards a close. The results announced so far showed that the combined net profit of a total of 2,983 companies rose 21.2% to Rs 86112 crore on 18.8% rise in sales to Rs 938018 crore in Q3 December 2010 over Q3 December 2009.

There are concerns of slowdown in corporate profit growth going ahead. With the rise in key policy rates by the Reserve Bank of India (RBI) recently, interest cost will only rise in the coming quarters that could hurt earnings going forward. If raw material costs keep rising at a fast clip, companies will feel the heat of slowing sales growth and rising cost of operations that could start eating into profit growth.

European shares edged lower after hitting 29-month high early on Monday as talk of slower-than-expected Chinese inflation data and strong China trade figures supported market. The key benchmark indices in France and UK fell by between 0.19% to 0.22%. Germany’s DAX up 0.24%.

Asian stocks rose on Monday as investors greeted news of Egyptian President Hosni Mubarak’s resignation with relief. The key benchmark indices in Hong Kong, Indonesia, Japan, Singapore, South Korea and Taiwan rose by between 0.88% to 1.89%.

China’s Shanghai Composite jumped 2.53% after China’s trade surplus fell to its lowest in nine months in January after imports surged, supporting the government’s case ahead of a G20 meeting that it is doing enough to spur domestic demand without speeding up currency appreciation. The trade surplus shrank to $6.5 billion from $13.1 billion in December, well short of forecasts for a $10.7 billion gap.

Japan’s economy shrank slightly in the final quarter of 2010 but analysts expect a recovery this year as stronger exports to China and other parts of fast-growing Asia offset persistently weak domestic demand. Gross domestic product (GDP) shrank 0.3% in October-December from the previous quarter, slightly less than a 0.5% fall expected by markets but still the first contraction in five quarters.

Mubarak handed power over to the army, bowing to escalating pressure from the military and protesters demanding he goes. His departure was seen partially reviving investors’ appetite for risk. Two weeks of anti-government protests in Egypt sparked concerns the unrest could spread across the Middle East, contributing to volatility in markets and commodity prices worldwide.

US index futures reversed initial gains. Trading in US index futures indicated that the Dow could fall 3 points at the opening bell on Monday, 14 February 2011.

U.S. stocks closed out their second straight week of gains on Friday with a rally sparked after Egyptian President Hosni Mubarak resigned, easing tension around the region for now.

The BSE 30-share Sensex was up 473.59 points or 2.67% to 18,202.20. The index gained 499.01 points at the day’s high of 18227.62 in late trade. The Sensex rose 128.51 points at the day’s low of 17857.12 in early trade.

The S&P CNX Nifty gained 146 points or 2.75% to 5,456.

The BSE Mid-Cap index rose 3.52% and the BSE Small-Cap index rose 3.94%. Both these indices outperformed the Sensex.

The market breadth, indicating the health of the market, was strong. On BSE, 2449 shares advanced while 495 shares declined. A total of 61 shares remained unchanged.

All the 30 members from the Sensex pack 29 stocks logged gains and one fell.

BSE clocked turnover of Rs 3448 almost same as that of Rs 3445.18 crore on Friday, 11 February 2011.

Index heavyweight Reliance Industries (RIL) rose 0.51% to Rs 915.20 reversing initial losses. The stock had fallen to the day’s low of Rs 895 on reports stock exchange regulator Sebi could levy a record penalty on RIL if it is able to establish that the company was involved in insider trading. The penalty could be worth Rs 25 crore or three times the amount of profit the company made from insider trading – whichever is higher.

Reliance Communications rose 0.26%. The consolidated net profit fell 56.65% to Rs 480.27 crore on 5.75% decline in total income to Rs 5004.09 crore in Q3 December 2010 over Q3 December 2009. The company announced Q3 result after market hours today.

Tata Power Company jumped 3.74%. The consolidated net profit jumped 377.87% to Rs 442.37 crore on 0.77% decline in total income to Rs 4519.18 crore in Q3 December 2010 over Q3 December 2009. The company announced Q3 result after market hours today.

Diversified Jaiprakash Associates surged 6.79%, extending Friday’s 7.35% gains. The stock had hit 52 week low of Rs 70.25 on 9 February 2011.

Reliance Infrastructure rose 1.85% to Rs 627.10 after company announced buyback of shares at a price of Rs 725, at a premium over the current ruling price. The consolidated net profit rose 10.16% to Rs 405.25 crore on 11.2% rise in total income to Rs 3871.64 crore in Q3 December 2010 over Q3 December 2009. The company announced Q3 result during market hours today.

India’s largest engineering and construction firm by sales Larsen & Toubro jumped 6.7% after company announced during market hours today that it bagged Rs 1100 crore EPC order from GSECL.

Among other capital goods stocks, Bhel, Usha Martin, ABB, BEML and Thermax rose by between 3.35% to 6.28%.

Inerest rate sensitive auto stocks rose across the board after data showed inflation moderated in the month of January. Car maker Maruti Suzuki India rose 3.06%. The stock had hit a 52-week low of Rs 1146 on Thursday, 10 February 2011. India’s second largest bike maker by sales Bajaj Auto gained 3.12%. India’s top bike maker by sales Hero Honda Motors rose 3.79%. The stock had hit a 52-week low of Rs 1412.20 on Wednesday, 9 February 2011.

Mahindra and Mahindra (M&M) gained 1.71%. The company recently unveiled plans to acquire a 38% stake in BSE-listed EPC Industrie. The acquisition would be through preferential allotment of shares by EPC, following which M&M will make the mandatory open offer to acquire a 20% stake in the Nashik-based micro-irrigation firm.

Tata Motors jumped 5.6% after consolidated net profit jumped 272.9% to Rs 2424 crore on 22% rise in consolidated revenue to Rs 31685 crore in Q3 December 2010 over Q3 December 2009. The company announced the Q3 result at the fag end of the trading session on Friday, 11 February 2011. The stock had jumped 3.79% on Friday.

Interest rate sensitive banking stocks rose after data showed inflation moderated in the month of January. India’s largest private sector bank by market capitalisation ICICI Bank was up 3.06%. India’s second largest private sector bank by market capitalisation HDFC Bank was up 2.28%. India’s largest commercial bank by branch network State Bank of India gained 4.12%. State Bank of India has raised term deposit rates on two maturity buckets — 555 days and 1,000 days — by 25 basis points. Simultaneously, to protect its margins, the bank has marked up its lending rate by 25 basis points. All rate hikes are effective from 14 February 2011.

Among other banks, Federal Bank Yes Bank, Bank of India, Canara Bank, IDBI Bank, Indian Overseas Bank, Axis Bank, Kotak Mahindra Bank, Bank of Baroda, Union Bank of India and Punjab National Bank rose by between 2.44% to 5.6%.

Metal stocks gained across the board after China’s trade data showed imports surged in the month of January. China is the World’s largest consumer of base metals. Hindalco Industries rose 3.88% after net profit rose 7.78% to Rs 460.34 crore on 12.53% rise in total income to Rs 6035.22 crore in Q3 December 2010 over Q3 December 2009. The company announced Q3 result on Saturday, 12 February 2011.

Steel giant Tata Steel rose 4.06% ahead of Q3 results on Tuesday, 15 February 2011.

Jindal Steel & Power, Hindustan Zinc, JSW Steel, Jindal Saw, Sterlite Industries Steel Authority of India, National Aluminum Company rose by between between 0.88% to 6.62%.

LMEX, a gauge of six metals traded on the London Metal Exchange rose 0.11% on Friday, 11 February 2011.

Consumer durables stocks gained on bargain hunting after recent losses. Rejesh Exports, Gitanjali Gems, Videocon Industries, Titan Industries and Blue Star rose by between 0.84% to 8.99%.

FMCG stocks too gained. United Spirits, ITC an Hindustan Unilever rose by between 1.58% to 14.76%.

Marico jumped 4.9% on reports the Emami group is close to sealing a deal for buying ‘Sweekar’, a refined sunflower oil brand of the company.

IT stocks rose on bargain hunting after last two days losses. India’s second largest IT exporter by sales Infosys gained 2.1%. India’s largest IT exporter by sales TCS rose 2.22%. India’s third largest IT exporter by sales Wipro rose 0.58%.

Mahindra Satyam spurted 11.66% after consolidated net profit surged 152.79% to Rs 58.90 crore on 2.97% increase in income from operations to Rs 1279.30 crore in Q3 December 2010 over Q2 September 2010.

Interest rate sensitive realty stocks rose on ease in inflation in the month of January 2011. Phoenix Mills, Sobha Developers DLF, HDIL and Indiabulls Real Estate rose by between 2.43% to 7.23%.

Unitech jumped 3.87% ahead of its Q3 result today.

Sanraa Media clocked highest volume of 1.54 crore shares on BSE. Unitech (94.99 lakh shares), Shree Ashtavinayak Cine Vision (94.86 lakh shares), Mahindra Satyam (78.21 lakh shares) and SpiceJet (70.61 lakh shares) were the other volume toppers in that order.

Gitanjali Gems clocked highest turnover of Rs 134.82 crore on BSE. ACC (Rs 125.32 crore), State Bank of India (Rs 120.59 crore), Reliance Industries (Rs 116.49 crore) and Tata Motors (Rs 95.36 crore) were the other turnover toppers in that order.

In macro news, the latest economic data showed industrial output in December 2010 rose a slower-than-expected 1.6% from a year earlier. Manufacturing output, which constitutes about 80% of the industrial production, rose an annual 1%, the statistics office said in a statement. Growth in industrial output in November 2010 was revised upwards to 3.62% from earlier 2.7%

The food price index rose 13.07% and the fuel price index climbed 11.61% in the year to 29 January 2011, government data on Thursday 10 February 2011 showed. In the prior week, annual food and fuel inflation stood at 17.05% and 11.61%. The primary articles price index was up 16.24% in the latest week, compared with an annual rise of 18.44% a week earlier.

The next major trigger for the stock market is Union Budget 2011-2012 to be unveiled by the finance minister Pranab Mukherjee on 28 February 2011. Investors will watch if the Finance Minister announces measures to rein in inflation and inflationary expectations. The Finance Minister may announce a new road map for the Goods & Services Tax (GST). The original deadline of 1 April 2010 for roll-out of GST has already been missed due to the lack of consensus between the Centre and states on the issue. GST is India’s most ambitious indirect tax reform plan, which aims to stitch together a common market by dismantling fiscal barriers between states.

The Centre has reportedly sent the empowered committee of state finance ministers yet another draft constitutional amendment on the proposed goods & services tax (GST) in a last-ditch attempt to reach a consensus before the Budget session of Parliament. The third draft reportedly proposes the creation of a GST Council through an Act of Parliament, instead of presidential order, as proposed in the previous draft.

The government may also announce some populist measures in the Budget given that assembly elections are due in Kerala, Tamil Nadu, West Bengal and Assam. In all these states, the Congress is potentially looking to regain power or to retain it.

Intraday volatility was immense. The market edged lower in choppy early trade on weak Asian stocks. The Sensex declined once a gain to hit fresh intraday low in morning trade after trimming initial losses. The market once again trimmed losses after hitting fresh seven-month lows in mid-morning trade. The market weakened once again after recovering sharply from near eight-month low in early afternoon trade. Volatility continued as market came off lows in afternoon trade. Auto and banking stocks led a sharp recovery as the key benchmark indices erased all the intraday losses to turn positive for a brief period in mid-afternoon trade.

The food price index rose 13.07% and the fuel price index climbed 11.61% in the year to 29 January 2011, government data on Thursday showed. In the prior week, annual food and fuel inflation stood at 17.05% and 11.61%. The primary articles price index was up 16.24% in the latest week, compared with an annual rise of 18.44% a week earlier.

Foreign institutional investors (FIIs) sold shares worth a net Rs 284.60 crore on Wednesday, 9 February 2011, lower than an outflow of Rs 531.60 crore on Tuesday, 8 February 2011. FII outflow in February 2011 totaled Rs 1301.60 crore (till 9 February 2011). FIIs had sold equities worth Rs 4813.20 crore in January 2011. FII outflow in the calendar year 2011 totaled Rs 6114.70 crore (till 9 February 2011).

The Central Bureau of Investigation (CBI) widened its probe in 2G scam with the arrest of Shahid Balwa, managing director of DB Realty and vice chairman of Etisalat DB, the venture between DB Group and Abu Dhabi’s Etisalat on Tuesday, 8 February 2011. Balwa’s counsel on Wednesday contended that the company of his client was being singled out and he was being made “scapegoat” despite the involvement of more firms in the case.

Swan Telecom and Unitech Telecom had together caused a loss of over Rs 7000 crore to government exchequer as both had offloaded their shares for hefty sums after getting the 2G spectrum, according to CBI. In a five-page FIR, CBI said the officials of the Department of Telecom and some private companies entered into a criminal conspiracy and caused wrongful gains to themselves. DB Group sold a 45% stake in Swan Telecom to Etisalat after the operator was granted a licence. Swan Telecom has since been renamed Etisalat DB.

The Comptroller and Auditor General of India’s (CAG) report in November 2010 said rules were flouted when telecom licences were awarded, which led to many ineligible firms winning licences. Telecoms minister A Raja was sacked soon after the report was released. He was arrested this month on charges of misuse of ministerial office and criminal misconduct.

The Q3 December 2010 results season is drawing towards a close. The results announced so far showed that the combined net profit of a total of 2,370 companies rose 22% to Rs 83211 crore on 19.5% rise in sales to Rs 819849 crore in Q3 December 2010 over Q3 December 2009.

There are concerns of slowdown in corporate profit growth going ahead. With the rise in key policy rates by the Reserve Bank of India (RBI) recently, interest cost will only rise in the coming quarters that could hurt earnings going forward. If raw material costs keep rising at a fast clip, companies will feel the heat of slowing sales growth and rising cost of operations that could start eating into profit growth.

European shares edged lower on Thursday, with Air France falling after a profit warning. The key benchmark indices in France, Germany and UK declined by between 0.32% to 0.9%.

Asian markets succumbed to a bit of profit taking on Thursday, after the head of the Federal Reserve signaled the US economic recovery was still fragile and warned against sharp spending cuts. Fed Chairman Ben Bernanke suggested US economic conditions were still too weak for the central bank to pull back on its vast monetary stimulus. The key benchmark indices in Hong Kong, Japan, Indonesia, South Korea, Singapore and Taiwan fell by between 0.11% to 1.89%. But, China’s Shanghai Composite rose 1.62%.

US index futures reversed initial gains. Trading in US index futures indicated that the Dow could fall 50 points at the opening bell on Thursday, 10 February 2011.

In US market action on Wednesday, investors took profits after a recent rise in stocks but a late-hour rally in Bank of America shares helped the Dow squeeze out its eighth straight day of gains. Bernanke told a congressional committee that the labor market remains sluggish and he continues to believe that inflation will remain subdued.

The BSE 30-share Sensex was down 129.73 points or 0.74% to 17,463.04, its lowest closing level since 5 July 2010. The Sensex lost 230.18 points at the day’s low of 17,362.59 in mid-morning trade. The index rose 44.11 points at the day’s high of 17,636.88 in early trade.

The S&P CNX Nifty was down 27.75 points or 0.53% to 5,225.80, its lowest level since 15 June 2010. The Nifty hit low of 5,196.80 in mid-morning trade.

The BSE Mid-Cap index was up 0.11% and outperformed the Sensex. The BSE Small-Cap index was down 0.86% and underperformed the Sensex.

Sectoral indices on BSE were mixed. The BSE Auto index (up 0.83%), Power index (Up 0.82%), Healthcare index (up 0.58%), Capital Goods index (up 0.03%), FMCG index (down 0.04%), Metal index (down 0.17%), Consumer Durables index (down 0.24%), and banking sector index Bankex (down 0.31%), outperformed the Sensex. The BSE PSU index (down 0.76%), Oil & Gas index (down 0.81%), Realty index (down 1.03%), and IT index (down 1.53%), underperformed the Sensex.

The market breadth, indicating the health of the market, was weak. On BSE, 1,848 shares declined while 1,035 shares advanced. A total of 85 shares remained unchanged.

Among the 30-member Sensex pack, 16 declined while the rest rose.

BSE clocked turnover of Rs 3558 crore, lower than Rs 3942.21 crore on Wednesday, 9 February 2011.

Index heavyweight Reliance Industries (RIL) was down 1.33% to Rs 899.75. The stock hit a 52-week low of Rs 885.10 on NSE today, 10 February 2011. As per reports, RIL’s ambitions to become a key shale gas player will push it to accept the $3.2 billion deal between Chevron Corp and Atlas Energy despite concerns but RIL would finalise the strategy later this week. RIL had acquired shale acreages from Atlas Energy last April, outbidding Chevron. Later US oil major announced acquisition of Atlas.

Cairn India rose 0.43%. The company’s consolidated net profit jumped 590.85% to Rs 2010.12 crore on 425.87% rise in total income to Rs 3130.60 crore in Q3 December 2010 over Q3 December 2009. The company announced Q3 results after market hours today.

Some healthcare stocks edged higher. Matrix Laboratories, Lupin, Ranbay Laboratories and Sun Pharmaceutical Industries rose by between 0.19% to 3.6%.

Most auto shares rose on bargain hunting after recent sharp losses. India’s top truck maker by sales Tata Motors rose 2.37% ahead of its Q3 results tomorrow, 11 February 2011. India’s top bike maker by sales Hero Honda Motors rose 0.87%. The stock had hit a 52-week low of Rs 1412.20 on Wednesday.

Car maker Maruti Suzuki India rose 0.15%, in volatile trade. The stock hit a 52-week low of Rs 1146 today. India’s second largest bike maker by sales Bajaj Auto gained 0.53%.

Mahindra and Mahindra (M&M) was flat in volatile trade after company unveiled plans to acquire a 38% stake in BSE-listed EPC Industrie. The acquisition would be through preferential allotment of shares by EPC, following which M&M will make the mandatory open offer to acquire a 20% stake in the Nashik-based micro-irrigation firm.

Banking stocks were mixed. India’s largest private sector bank by net profit ICICI Bank rose 0.4% to Rs 961.50, off the day’s high of Rs 974. India’s second largest private sector bank by net profit HDFC Bank fell 0.13% to Rs 2019.30, off the day’s high of Rs 2046.70.

India’s largest bank by net profit and branch network State Bank of India fell 3.64%. State Bank Of India has announced that the bank has concluded an issue of Senior debt, fixed rate bonds, Under the medium term note (MTN) Programme, having a maturity of 5 years at a coupon rate of 3.375% p.a. payable annually in the form of Regulation-S Global Notes. The bonds will be issued through bank’s London branch as of 22 February 2011 and shall be listed on six Swiss exchanges.

Power Finance Corporation fell 1.56% after the government on Thursday approved a follow-on share sale by the state-run power sector finance firm. The company will issue fresh shares for 15% of the pre-issue capital and the government will sell 5%, the government said in a statement.

IT stocks fell after Federal Reserve chairman Ben Bernanke signaled the US economic recovery was still fragile. US is the biggest market for Indian IT firms. India’s second largest IT exporter by sales Infosys declined 2.27% and India’s third largest IT exporter by sales Wipro shed 1.25%. India’s largest IT exporter by sales TCS fell 0.67%.

Reliance Infrastructure (R-Infra), part of the Anil Ambani group (ADAG) jumped 9.45% after company said its board will meet on 14 February 2011 to consider a share buyback. The stock was the top gainer from the Sensex pack. The company announced the board meeting for buy back after market hours on Wednesday after the stock slumped 18.79% on that day.

Shares of other Anil Dhirubhai Ambani group (ADAG) stocks also rebounded after plunging on Wednesday. Reliance Capital, Reliance Communications and Reliance MediaWorks jumped by between 1.53% to 4.97%. Reliance Power fell 0.44%, reversing initial gains. On Wednesday, Reliance Capital had tumbled 14.05% and Reliance MediaWorks had tanked 16.11%. Reliance Communications had plunged 14.32%.

ADAG said after trading hours on Wednesday that a series of baseless and motivated rumors were spread by rivals, which was accompanied by vicious and illegal bear hammering of the group shares. It said it had asked the Securities and Exchange Board of India and the stock exchanges to investigate.

Most of the interest rate sensitive realty stocks extended recent steep losses on concerns higher interest costs and higher property prices may dent demand for residential units. Ackruti City, Sobha Developers, Sunteck Realty and Peninsula Land fell by between 0.52% to 8.86%.

Unitech tumbled 5.03% extending recent losses, with the firm named by the Central Bureau of Investigation as one the beneficiaries of cheap spectrum allocation in 2008. The stock hit 52 week low of Rs 32.35 today. The CBI said Unitech was allotted licences for 22 cricles for Rs 1658 crore. It later offloaded its 60% of shares in the licenses to Telenor of Norway for Rs 6100 crores even before the roll-out, CBI said.

Some cement stocks recovered after recent steep losses. ACC, Jaiprakash Associates and Ambuja Cements rose by between 0.91% to 5.25%.

Some telecom stocks fell after the telecom regulator proposed steep increases in the price of second-generation (2G) mobile radio waves. Idea Cellular (down 2.19%) and Bharti Airtel (down 2.8%) dropped.

The Telecom Regulatory Authority of India (TRAI) has recommended a six-fold hike in the price of start-up 2G spectrum and has said that every Mhz of additional spectrum (on an all-India basis) beyond the contracted limit of 6.2 megahertz (Mhz) will cost a massive Rs 4,571.87 crore. All spectrum with existing telecom companies, which is more than the 6.2 megahertz (Mhz) that is being provided under the license be repriced. As a result, Bharti Airtel is now facing a liability of Rs 4,000 crore, Idea Cellular Rs 1,316 crore, MTNL Rs 883 crore and Reliance Communications Rs 70 crore.

TRAI’s proposals to the government come in the wake of a telecoms scandal that has shaken the political system, involving the allocation below market prices of 2G licences and spectrum in 2008.

Hotel shares dropped. Hotel Leela Venture, EIH and Indian Hotels shed by between 2.88% to 8.22%.

Metal stocks were mixed. Sterlite Industries, Hindalco Industries and Jindal Steel & Power fell by between 0.27% to 2.53%. JSW Steel, Tata Steel, Bhushan Steel, National Aluminum Company rose by between 0.21% to 6.42%.

Consumer durables stocks extended recent losses. Gitanjali Gems, Blue Star and Videocon Industries shed by between 0.58% to 0.77%.

Omkar Speciality Chemicals clocked highest volume of 2.24 crore shares on BSE. Cals Refineries (1.75 crore shares), Unitech (1.51 crore shares), Alok Industries (79.26 lakh shares) and Reliance Communications (77.85 lakh shares) were the other volume toppers in that order.

State Bank of India clocked highest turnover of Rs 193.50 crore on BSE. Reliance Infrastructure (Rs 180.40 crore), Jain Irrigation (Rs 120.90 crore), Reliance Capital (Rs 120.56 crore) and Reliance Industries (Rs 115.59 crore) were the other turnover toppers in that order.

The Reserve Bank of India faces a challenge in easing liquidity without signalling that it is loosening its anti-inflationary monetary policy stance, its governor, Duvvuri Subbarao, said on Wednesday. Subbarao also said that a cut in the cash reserve ratio may send a mixed signal to the markets.

The Reserve Bank of India is taking steps to bring liquidity in the financial system, which has been in deficit for several months, into the “comfort zone”, Subir Gokarn, deputy governor of the Reserve Bank of India said on Wednesday.

The government will announce industrial output data for the month of December 2010 tomorrow, 11 February 2011. Industrial production growth slumped to 2.7% in November 2010 as against a revised 11.30% growth in October 2010, as growth in the manufacturing output slowed sharply.

The next major trigger for the stock market is Union Budget 2011-2012 to be unveiled by the finance minister Pranab Mukherjee on 28 February 2011. Investors will watch if the Finance Minister announces measures to rein in inflation and inflationary expectations. The Finance Minister may announce a new road map for the Goods & Services Tax (GST). The original deadline of 1 April 2010 for roll-out of GST has already been missed due to the lack of consensus between the Centre and states on the issue. GST is India’s most ambitious indirect tax reform plan, which aims to stitch together a common market by dismantling fiscal barriers between states.

The Centre has reportedly sent the empowered committee of state finance ministers yet another draft constitutional amendment on the proposed goods & services tax (GST) in a last-ditch attempt to reach a consensus before the Budget session of Parliament. The third draft reportedly proposes the creation of a GST Council through an Act of Parliament, instead of presidential order, as proposed in the previous draft. The empowered committee will convene in New Delhi on 11 February 2011 to discuss the revised draft.

The government may also announce some populist measures in the Budget given that assembly elections are due in Kerala, Tamil Nadu, West Bengal and Assam. In all these states, the Congress is potentially looking to regain power or to retain it.

Index heavyweight Reliance Industries (RIL) gained over 1% while another heavyweight Infosys advanced 1.5%. But, ICICI Bank shed over 1.5%. Cipla slumped close to 3% after poor Q3 earnings. Auto , IT and banking stocks were mixed.

Intraday volatility was high. The key benchmark indices slipped into the red after a firm start. The market bounced back into the green instantly, with the Sensex hitting a fresh intraday high. The market pared gains in morning trade. The Sensex regained strength amid volatility in mid-morning trade. The market held positive in early afternoon trade. The market pared gains in afternoon trade. The market retreated to the day’s low after striking day’s high in late trade.

The GDP growth in the first half of the current fiscal year to end-March is expected to be revised downwards from 8.9% provisional estimate, Chief Statistician of India T.C.A. Anant said on Monday. Anant also said the government will release a new monthly CPI data series from 18 February 2011.

The government today, 7 February 2011, estimated GDP growth for the fiscal year ending March 2011 at 8.6%. Farm output is expected to grow 5.4%, while industry growth this fiscal is expected at 6.2%. The service sector growth is projected to grow 11%.

Finance Minister Pranab Mukherjee on Sunday, 6 February 2011, said inflation and the current account deficit might become causes of concern if crude oil prices keep rising.

Oil traded near the lowest in a week as receding violence in Egypt eased concern that supplies of crude from the Middle East will be disrupted. New York March 2011 crude futures were up 21 cents at $89.24 a barrel. US President Barack Obama said Sunday he is confident the US can work with Egypt’s next government, though he stopped short of calling for President Hosni Mubarak’s immediate departure, which protesters in Egypt are demanding.

Investors pulled $7 billion out of emerging market equity funds in the week ended 2 February 2011, the biggest outflow in three years, data from fund tracker EPFR Global showed, putting a sizeable dent in the record inflows seen in this category in 2010. The large outflow included an outflow of $4.6 billion from exchange-traded funds (ETFs) focused on emerging markets, the largest such outflow these ETFs have ever seen. Among some of the major emerging market countries, Indian equity funds had their biggest outflow since early June 2010 as commercial lenders started passing on the central bank’s latest rake hike, EPFR said. India equity funds had net outflows of $207 million in the week ended 2 February 2011.

On the corporate front, the results announced so far showed that the combined net profit of a total of 1,920 companies rose 22.30% to Rs 76052 crore on 20.50% rise in sales to Rs 634831 crore in Q3 December 2010 over Q3 December 2009.

There are concerns of slowdown in corporate profit growth going ahead. With the rise in key policy rates by the Reserve Bank of India (RBI) recently, interest cost will only rise in the coming quarters that could hurt earnings going forward. If raw material costs keep rising at a fast clip, companies will feel the heat of slowing sales growth and rising cost of operations that could start eating into profit growth.

The next major trigger for the stock market is Union Budget 2011-2012 to be unveiled by the finance minister Pranab Mukherjee on 28 February 2011. Investors will watch if the Finance Minister announces measures to rein in inflation and inflationary expectations. The Finance Minister may announce a new road map for the Goods & Services Tax (GST). The original deadline of 1 April 2010 for roll-out of GST has already been missed due to the lack of consensus between the Centre and states on the issue. GST is India’s most ambitious indirect tax reform plan, which aims to stitch together a common market by dismantling fiscal barriers between states.

The Centre has reportedly sent the empowered committee of state finance ministers yet another draft constitutional amendment on the proposed goods & services tax (GST) in a last-ditch attempt to reach a consensus before the Budget session of Parliament. The third draft reportedly proposes the creation of a GST Council through an Act of Parliament, instead of presidential order, as proposed in the previous draft. The empowered committee will convene in New Delhi on 11 February 2011 to discuss the revised draft.

The government may also announce some populist measures in the Budget given that assembly elections are due in Kerala, Tamil Nadu, West Bengal and Assam. In all these states, the Congress is potentially looking to regain power or to retain it.

Meanwhile, Finance Minister Mukherjee has reportedly convened a meeting of leaders of political parties on 8 February 2011 to resolve the deadlock in Parliament on the issue of Joint Parliamentary Committee (JPC) probe into the 2G spectrum scam. Lok Sabha Speaker Meira Kumar has convened a meeting of leaders of some of the political parties on Monday, 7 February 2011, to ensure smooth functioning of the budget session after the longest shutdown of Parliament in the winter session on the JPC issue.

European shares neared a two-and-a-half year high on Monday, extending Friday’s rise on the back of Asian and US gains, with surging mining stocks led higher by a dividend-raising Randgold Resources . They key benchmark indices in UK, Germany and France were up by between 0.8% to 0.99%.

Asian stocks were mixed on Monday, 7 February 2011. The key benchmark indices in South Korea and Japan rose 0.47% and 0.46% respectively. The key benchmark indices in Indonesia, Hong Kong and Singapore fell by between 0.24% to 1.49%. Markets in China, Taiwan and Vietnam remained shut on account of last week’s Lunar New Year.

US stocks rose on Friday, 4 February 2011, reversing losses and sending the Standard and Poor’s 500 Index to the highest level since June 2008, after unemployment rate unexpectedly dropped and more companies beat earnings estimates. The Dow Jones industrial average rose 29.89 points, or 0.25%, at 12,092.15. The S&P 500 index added 3.77 points, or 0.29%, at 1,310.87 and the Nasdaq Composite index climbed 15.42 points, or 0.56%, at 2,769.30.

The Labor Department said on Friday, 4 February 2011, the US unemployment rate fell to 9% in January 2011 from 9.4% in December 2010.

US index futures reversed early losses. Trading in US index futures indicated that the Dow could rise 35 points at the opening bell on Monday, 7 February 2011.

Back home, on the macro front, there are concerns that high inflation will trigger more monetary tightening from the Reserve Bank of India this year. Prime Minister Manmohan Singh on Friday, 4 February 2011, said the country’s high inflation posed a “serious threat” to the growth momentum, and was driven by supply-side shortages.

Reserve Bank of India (RBI) deputy governor Subir Gokarn on Sunday, 6 February 2011, said events in Egypt will have an impact on monetary policy. “After making the policy announcement on 25th Jan, a whole set of events unfolded in the Middle East, which are starting to have an impact on oil prices, obviously, which we did not anticipate at the time we made the announcement,” Gokarn said. “So, a completely new environment has emerged in a very short time after the announcement. It is going to have an impact on our thinking, our action going forward,” Gokarn added. The central bank holds a mid-quarter policy review on 17 March 2011.

The central bank last month raised interest rates by 25 basis points to clamp down on resurgent inflation, which stood at 8.43 percent in December 2010, and warned of persistently high food prices unless steps are taken to boost supplies.

The BSE 30-share Sensex was up 29.04 points or 0.16% to 18,037.19. The index gained 172.79 points at the day’s high of 18,180.94 in late trade. The index fell 31.14 points at the day’s low of 17,977.01 in late trade.

The S&P CNX Nifty was almost unchanged at 5396. The Nifty hit a high of 5,440.35 and low of 5,376.95 in intra-day trade.

The BSE Mid-Cap index fell 0.52% and the BSE Small-Cap index declined 0.83%. Both these indices underperformed the Sensex.

The sectoral indices on BSE were mixed. The BSE Realty (up 1.67%), FMCG (up 1.42%), Power index (up 0.28%) and IT index (up 0.18%) outperformed the Sensex. The BSE Helathcare index (down 1.5%), Consumer Durables (down 1.32%), Capital Goods index (down 1.11%), Bankex (down 0.36%), Metal index (up 0.07%) and Auto index (up 0.12%) underperformed the Sensex.

The market breadth, indicating the health of the market, was weak. On BSE, 1720 shares declined while 1146 shares advanced. A total of 85 shares remained unchanged. The breadth was strong upto mid-morning trade.

Among the 30-member Sensex pack, 21 gained while the rest fell.

Index heavyweight Reliance Industries (RIL) rose 1.07% to Rs 929.30 after oscillating between Rs 914.40 and Rs 938.90 during the day. As per recent reports, RIL may challenge Chevron Corp’s bid for Atlas Energy Inc. RIL is said to have hired Perella Weinberg Partners and Kirkland & Ellis to evaluate its options. Last April, Reliance agreed to pay Atlas $1.7 billion to form a joint venture and own 40% of Atlas’s Marcellus Shale operations in the eastern United States. In November 2010, Chevron then announced plans to buy Atlas for $3.2 billion.

India’s largest dam builder by sales Jaiprakash Associates jumped 2.27%, reversing Friday’s 2.62% slide.

Auto stocks were mixed. India’s top bike maker by sales Hero Honda Motors gained 2.75%. India’s largest small care maker by sales Maruti Suzuki India advanced 0.87%. India’s top truck maker by sales Tata Motors shed 0.32% reversing initial gains. India’s second largest bike maker by sales Bajaj Auto fell 0.74%.

India’s top tractor maker by sales Mahindra & Mahindra was flat, paring initial gains. The company unveils its Q3 December 2010 earnings on 9 February 2011.

Some metal stocks rose as LMEX, a gauge of six metals traded on the London Metal Exchange, rose 1.16% on Friday, 4 February 2011. Jindal Steel & Power, JSW Steel and Tata Steel gained by between 0.07% to 0.94%.

India’s largest non-ferrous metal firm by sales Sterlite Industries (India) rose 0.36% after the company completed acquisition of a 74% interest in Black Mountain Mining in South Africa from Anglo Operations, a member of the Anglo American plc Group, for a total consideration of $348mn. The acquisition includes the Black Mountain zinc mine and the Gamsberg zinc project.

India’s largest private sector bank by net profit ICICI Bank lost 1.63% after its ADR declined 3.47% on the NYSE on Friday, 4 February 2011.

India’s largest bank by net profit and branch network State Bank of India rose 0.6% and India’s second largest private sector bank by net profit HDFC Bank rose 0.98%.

Software pivotals were mixed. India’s largest software firm by sales TCS shed 1.4%. India’s second largest software firm by sales Infosys rose 1.48% and India’s third largest software firm by sales Wipro lost 2.05%.

India’s largest FMCG company by sales Hindustan Unilever rose 0.46% on reports the company will soon launch its first fruit-based drink under the Kissan brand to cash in on the increasingly health-conscious mindset of the Indian consumer.

Among other FMCG stocks, Dabur India, ITC and Nestle India rose by between 0.6% to 3.07%.

Cipla lost 2.95% to Rs 314.65 after net profit fell 19.49% to Rs 232.69 crore on 11.70% rise in net sales to Rs 1501.36 crore in Q3 December 2010 over Q3 December 2009. Nevertheless, the stocks came off day’s low of Rs 308.50. It was the top loser from the Sensex pack.

Among other healthcare stocks, Lupin, Ranbaxy Laboratories, Sun Pharmaceutical Industries and Pfizer declined by between 0.04% to 2.63%.

Select interest rate sensitive realty stocks advanced on bargain hunting after recent steep losses. Indiabulls Real Estate, Unitech, DLF and HDIL rose by between 1.72% to 3.9%.

Telecom pivotals advanced. India’s largest listed cellular services by sales Bharti Airtel gained 0.66% and India’s second largest listed cellular services by sales Reliance Communications rose 0.7%.

Capital goods stocks edged lower. BEML, Thermax, ABB, Larsen & Toubro and Siemens shed by between 0.14% to 4.38%.

Shree Ashtavinayak Cine Vision clocked highest volume of 3.53 crore shares on BSE. SpiceJet (1.63 crore shares), Cals Refineries (1.11 crore shares), Suzlon Energy (1.02 crore shares) and Unitech (47.07 lakh shares) were the other volume toppers in that order.

Sun TV Network clocked highest turnover of Rs 123.07 crore on BSE. State Bank of India (Rs 110.31 crore), BF Utilities (Rs 98.46 crore), Tata Motors (Rs 93.14 crore) and Tata Steel (Rs 78.92 crore) were the other turnover toppers in that order.

High beta realty, metal and capital goods led the rally. Sugar stocks surged on firm global sugar prices. All the 13 sectoral indices on the BSE were in green. Software pivotals were in demand on strong economic data in the US, the key market for Indian IT firms. Most auto stocks rose on good January 2011 sales.

Index heavyweight Reliance Industries (RIL) gained more than 2%. Another heavyweight Bharti Airtel advanced over 5% while Reliance Communications recovered from record low. Engineering & construction major Larsen & Toubro surged.

The market shrugged off data showing acceleration in food inflation. Food inflation jumped to 17.05% for the week ended 22 January 2011, its highest level since 25 December 2010. Food inflation for the previous week stood at 15.57%. The fuel price index climbed 11.61%, higher that previous week’s 10.87% rise. The primary articles index for the week ended 22 January 2011 rose to 18.44% from previous week’s 17.26% rise.

Business activity in the country’s services sector grew at a faster clip in January 2011 than in December 2010, boosted by new orders and expectations of solid growth, but costs also soared, a survey showed on Thursday, 3 February 2011. The HSBC Markit Business Activity Index, based on a survey of around 400 firms, rose to 58.1 in January 2011 after falling to 57.7 in December 2010 from November’s four-month high.

On the corporate front, the results announced so far showed that the combined net profit of a total of 1,651 companies rose 22.2% to Rs 72527 crore on 20.5% rise in sales to Rs 604242 crore in Q3 December 2010 over Q3 December 2009.

There are concerns of slowdown in corporate profit growth going ahead. With the rise in key policy rates by the Reserve Bank of India (RBI) recently, interest cost will only rise in the coming quarters that could hurt earnings going forward. If raw material costs keep rising at a fast clip, companies will feel the heat of slowing sales growth and rising cost of operations that could start eating into profit growth.

Meanwhile, the stock market regulator Securities & Exchange Board of India (Sebi) in an order released late Wednesday, 2 February 2011, banned 39 entities from the market for indulging in circular trading in five stocks — Spectacle Infotek, Goldstone Technologies, Gemstone Investments, LGS Global and Well Pack Papers & Containers. The order followed a detailed investigation in these stocks and their price movement between 2008 and 2010, the market regulator said.

Finance Minister Pranab Mukherjee on Wednesday, 2 February 2011, said stock markets have seen volatility over the past few days due to selling pressure from foreign institutional investors but the government still expects 8.5% economic growth in the current financial year ending March 2011. There could fluctuations in inflationary pressures over the next three months or so, but the overall trend for prices is to moderate, Mukherjee said. Mukherjee said on Thursday that the rise in food price index reading is part of inflationary fluctuations, referring to the latest weekly food inflation data.

The Finance Minister on Wednesday said manufacturing activity is on a strong growth path, in spite of the monthly fluctuations in the Index of Industrial Production witnessed in recent months, he said. Mukherjee also said fiscal deficit will be lower than the government’s earlier projection of 5.5% for the year ending March 2011.

Foreign institutional investors (FIIs) sold shares worth a net Rs 46.10 crore on Wednesday, 2 February 2011, lower than an outflow of Rs 425.70 on Tuesday, 1 February 2011. FII outflow in the calendar year 2011 totaled Rs 6185.30 crore (till 2 February 2011). FII outflow in January 2011 totaled Rs 4813.20 crore. FIIs had bought equities worth Rs 2049.60 crore in December 2010.

The next major trigger for the stock market is Union Budget 2011-2012. Investors will watch if the Finance Minister announces measures to rein in inflation and inflationary expectations. The Finance Minister may announce a new road map for the Goods & Services Tax (GST). The original deadline of 1 April 2010 for roll-out of GST has already been missed due to the lack of consensus between the Centre and states on the issue. GST is India’s most ambitious indirect tax reform plan, which aims to stitch together a common market by dismantling fiscal barriers between states.

The government may also announce some populist measures in the Budget given that assembly elections are due in Kerala, Tamil Nadu, West Bengal and Assam. In all these states, the Congress is potentially looking to regain power or to retain it.

European markets edged lower on Thursday, 3 February 2011, as heightened tensions in Egypt and upcoming economic data releases prompted traders to tread cautiously. The key benchmark indices in Germany, UK and France were down by 0.12% and 1.08%.

Euro-zone debt worries resurfaced after Standard & Poor’s on Wednesday, 2 February 2011, cut its rating on Ireland. Meanwhile, the European Central Bank (ECB) President Jean-Claude Trichet and officials are scheduled to meet in Frankfurt today, 3 February 2011, to discuss monetary policy. The euro region’s inflation accelerated to a 2.4% annual rate in January 2011, the statistics office said in a preliminary estimate on 31 January 2011, the fastest since October 2008. Trichet said on 26 January 2011 the ECB will ‘do what is necessary’ to maintain price stability.

Japan’s Nikkei 225 average slipped 0.25% after sluggish overnight leads from Wall Street and as renewed violence in Egypt stymied demand for riskier assets. Markets in China, Hong Kong, South Korea, Taiwan, Singapore, Malaysia, Indonesia and Vietnam were shut for the Lunar New Year holidays.

Turmoil in Egypt took center stage again amid violent clashes between pro- and anti-government demonstrators on Wednesday. Crowds, not satisfied with President Hosni Mubarak’s pledge to step down from power after his term expires this fall, called for his nearly 30-year reign to end immediately.

US stocks struggled to move higher on Wednesday, 2 February 2011, as investors took a break after recent rally. The Dow Jones Industrial Average rose 1.81 points to 12,041.97. The S&P 500 fell 3.56 points to 1,304.03 and the Nasdaq declined 3.86 points to 2,321.09. A report by ADP Employer Services showed private companies in America added 187,000 jobs in January 2011, exceeding economists forecast. It is the 12th consecutive month that employers have lifted staffing levels.

US index futures were volatile. Trading in US index futures indicated that the Dow could fall 4 points at the opening bell on Thursday, 3 February 2011.

The BSE 30-share Sensex was up 358.69 points or 1.98% to 18,449.31. The Sensex gained 375.59 points at the day’s high of 18,466.21 in late trade. The index fell 26.01 points at the day’s low of 18,064.61 in early trade.

The S&P CNX Nifty was up 94.75 points or 1.74% to 5,526.75. The Nifty hit a high of 5,532.65 in late trade.

The BSE Mid-Cap index rose 1.09%. The BSE Small-Cap index gained 1.21%. Both these indices underperformed the Sensex.

All the sectoral indices on BSE were in green. The BSE Realty index (up 3.93%), Capital Goods index (up 2.51%), Metal index (up 2.19%) and banking sector index Bankex (up 2.04%), outperformed the Sensex.

Healthcare index (up 0.18%), FMCG index (up 0.46%), IT index (up 0.68%), Consumer Durables index (up 0.91%), Auto index (up 1.39%), Power index (up 1.61%), Oil & Gas index (up 1.66%), and PSU index (up 1.61%), underperformed the Sensex.

The market breadth, indicating the health of the market, was strong. On BSE, 1,819 shares advanced while 1,073 shares declined. A total of 96 shares remained unchanged.

The total turnover on the BSE amounted to Rs 3519 crore lower than Rs 3595.50 crore on Wednesday, 2 February 2011.

Bajaj Auto was the lone loser from the 30-member Sensex pack. India’s second largest bike maker by sales lost 0.51%. Total sales rose 18% to 3.13 lakh units in January 2011 over January 2010. The company announced January sales figures during market hours on Wednesday, 2 February 2011.

Other auto stocks edged higher. India’s largest bike maker by sales Hero Honda Motors gained 2.79%, recovering from Wednesday’s over 5% slide. Net profit fell almost 20% to Rs 429 crore on 34.13% increase in total income to Rs 5223.69 crore in Q3 December 2010 over Q3 December 2009. The result was announced during trading hours on Wednesday, 2 February 2011.

India’s top truck maker by sales Tata Motors surged 4.08%. The company announces Q3 result on Friday, 11 February 2011. The company’s total sales rose 15% to 75,423 units in January 2011 over January 2010.

India’s largest tractor and utility vehicles maker Mahindra & Mahindra rose 0.66%. The company announces Q3 result on Wednesday, 9 February 2011. Total sales rose 21.7% to 57,217 units in January 2011 over January 2010, aided by 21.8% growth in automotive sales to 36,718 units and 21.4% growth in tractor sales to 20,499 units.

India’s largest car maker by sales Maruti Suzuki India rose 0.25%. Total vehicle sales rose 14.7% to Rs 1.09 lakh units in January 2011 over January 2010. Domestic sales rose 23.8% to 1 lakh units in January 2011 over January 2010. The company announced the monthly sales data during market hours on Tuesday, 1 February 2011.

Index heavyweight Reliance Industries (RIL) advanced 2.4% to Rs 943.50, off day’s low of Rs 914.60. Reportedly, fuel exports from RIL’s Jamnagar refinery doubled in January 2011 to the highest in five months, driven by a surge in diesel shipments. RIL shipped at least 1.2 million metric tonnes of fuels from Jamnagar in January, up from about 630,000 tons in December 2010.

India’s top realty developer by sales DLF jumped 7.42% on reports the company plans to make an average quarterly investment of Rs 300-400 crore over the next couple of quarters to acquire land in areas such as New Gurgaon and Chandigarh to consolidate its land holding. The scrip was the top gainer from the Sensex pack.

Among other realty stock, HDIL, Indiabulls Real Estate and Unitech rose by between 2.54% to 6.37%.

India’s largest engineering & construction firm by sales Larsen & Toubro surged 3.72% on bargain hunting, ending a two-day 4.28% slide. Larsen & Toubro’s wholly owned subsidiary L&T Infrastructure Finance has reportedly priced its retail bond issue at 8.2% annually, and 8.3% for the cumulative option. The 10-year bonds will have a buy back option at the end of fifth and seventh years. The company will raise a maximum of Rs 400 crore through the sale which remains open between 4 February 2011 and 4 March 2011.

Among other capital goods stocks, Bhel, Praj Industries, ABB and Siemens rose by between 0.43% to 2.59%.

India’s largest listed cellular services provider by sales Bharti Airtel surged 5.12%, extending Wednesday’s over 2% advance, after the company before market hours on Wednesday, 2 February 2011, said underlying earnings before interest, taxation, depreciation and amortization (EBITDA) margin was sustained at 33.8% in Q3 December 2010. Bharti’s consolidated net profit as per International Financial Reporting Standards declined 41% to Rs 1303 crore on 53% growth in total revenue at Rs 15756 crore in Q3 December 2010 over Q3 December 2009.

India’s second largest listed cellular services provider by sales Reliance Communications rose 0.85% to Rs 118.05, recovering from a record low of Rs 114.30 hit earlier in the day.

Bank stocks saw an across the board rally on fresh buying. India’s biggest commercial bank in terms of branch network, State Bank of India, rose 3.08%. India’s second largest private sector bank by net profit HDFC Bank rose 2.12%. India’s largest private sector bank by net profit ICICI Bank gained 2.13%.

Software pivotals were in demand on strong economic data in the US, the key market for Indian IT firms. India’s third largest IT exporter by sales Wipro gained 0.99% and India’s second largest software services exporter Infosys rose 0.98%.India’s largest software services exporter TCS rose 0.5%.

India’s largest pharma company by sales Cipla gained 1.43% ahead of its Q3 December 2010 earnings on Friday, 4 January 2011.

Sun Pharmaceuticals Industries was up 0.54% after the company’s unit got US drug regulator’s approval to market Galantamine hydrobromide extended-release capsules. The company made this announcement during trading hours today.

Most metal stocks rose after copper rushed towards a record high on Wednesday, nearing $10,000 a tonne before losing momentum. Three-month copper on the London Metal Exchange ended flat at $9,945 a tonne on Wednesday. It earlier hit a record of $9,988.25.

Tata Steel, Sterlite Industries, Hindustan Zinc, Jindal Steel & Power, Hindalco Industries and Steel Authority of India rose by between 1.25% to 4.62%.

National Aluminium Company rose 3.11% on reports the firm has increased the price of aluminium by nearly 5% or Rs 6,000 a tonne to about Rs 1.21 lakh a tonne effective 1 February 2011 due to firming up of global prices.

LMEX, a gauge of six metals traded on the London Metal Exchange, fell 0.10% on Wednesday, 2 February 2011.

Ambuja Cements jumped 3.75% to Rs 125.80. Net profit rose 3.8% to Rs 1264 crore on 4.4% growth in net sales to Rs 7390 crore in the year ended December 2010 over the year ended December 2009. The result was announced during trading hours today. Ambuja Cements said the cement demand-supply imbalance is set to continue for some time and there could be period market and price instability. Equally, the uptrend in in input costs currently shows no sings of abatement. Consequently, in the short term, margins may remain under pressure, the company said in a statement.

Sugar stocks extended Wednesday’s gains after sugar prices in New York spiked to their highest level in more than 30 years on Wednesday, 2 February 2011, as a massive tropical cyclone slammed into the northeast coast of Australia. Shree Renuka Sugars, Bajaj Hindusthan and Balrampur Chini Mills rose by between 3.27% to 5.92%.

Cals Refineries clocked highest volume of 1.22 crore shares on BSE. Birla Power Solutions (91.52 lakh shares), Unitech (68.68 lakh shares), Apollo Hospitals (55.60 lakh shares) and DLF (52.07 lakh shares) were the other volume toppers in that order.

Apollo Hospitals clocked highest turnover of Rs 259.71 crore on BSE. Reliance Industries (Rs 171.36 crore), State Bank of India (Rs 168.79 crore), DLF (Rs 127.04 crore) and Tata Steel (Rs 112.20 crore) were the other turnover toppers in that order.

In macro news, exports in December rose an annual 36.4% to $22.5 billion, while imports for the month fell 11.1% on the year to $25.1 billion, the latest government data showed. The trade deficit in December narrowed to $2.6 billion compared with $8.9 billion in November. Exports rose an annual 29.5% to $164.7 billion in April-December 2010.

The manufacturing sector expanded at a slightly faster pace in January 2011 on the back of output and new order growth but inflationary pressures persisted, a business survey showed. The HSBC Markit Purchasing Managers’ Index, based on a survey of around 500 companies, edged up to 56.8 in January from 56.7 in December. That was the 22nd consecutive month the key index of manufacturing has been above the reading of 50 that divides growth from contraction.

To control surging inflation, the Reserve Bank of India (RBI) at its quarterly policy review on 25 January 2011 raised repo rate by 25 basis points to 6.5% and the reverse repo rate by 25 basis points to 5.5%. Repo rate is the rate at which the RBI lends money to banks. Reverse repo is the rate at which RBI borrows funds from banks. The central bank held the cash reserve ratio steady at 6%.

“As high food inflation persists, the prospect of it spilling over to the general inflation process is rapidly becoming a reality,” Reserve Bank of India (RBI) Governor Subbarao said in the policy document released on Tuesday, 25 January 2011. The RBI lifted its headline inflation projection for March 2011 to 7% from 5.5% previously. The RBI stuck with its 8.5% GDP growth forecast for the current fiscal year, but with an upside bias.

The combined risks from inflation, the high current account deficit (CAD) and fiscal situation contribute to an increase in uncertainty about economic stability that consumers and investors will have to deal with, RBI said. To the extent that this deters consumption and investment decisions, growth may be impacted. While slower growth may contribute to some dampening of inflation and a narrowing of the CAD, it can also have significant impact on capital inflows, asset prices and fiscal consolidation, thereby aggravating some of the risks that have already been identified, it said.

Capital flows, which so far have been broadly sufficient to finance the CAD, may be adversely affected, the RBI said. Faster than expected global recovery may enhance the attractiveness of investment opportunities in advanced economies, which may impact capital flows to India. This may increase the vulnerability of India’s external sector. Hence, the composition of capital inflows needs to shift towards longer-term commitments such as foreign direct investment (FDI), the RBI said.

The BSE 30-share Sensex was down 454.12 points or 2.31%, off close to 530 points from the day’s high and up close to 80 points from the day’s low. Banking, metal, realty, auto and consumer durables stocks led losses. The market breadth was extremely weak. European stocks rose even as Chinese stocks fell earlier in the global day on fears Beijing will soon move to tighten policy again.

Closer home, intraday volatility was high. The market slipped into the red after a firm start. The market recovered sharply to turn positive for a brief period after hitting a fresh intraday low in morning trade. The market moved in a narrow range in the negative terrain in mid-morning trade. The market extended losses to hit fresh intraday low in early afternoon trade. Immense volatility was witnessed in mid-afternoon trade as the key benchmark indices lost ground, soon after staging an intraday recovery. Volatility remained high in late trade as the market trimmed losses after tumbling to a fresh intraday low.

NSE’s volatility index, India VIX, a gauge of traders’ perception of near-term risks in the market based on options prices, jumped 10.62% to to 22.60. The index had jumped 6.19% to 20.43 on Wednesday, 8 December 2010. The index had lost 0.67% to 19.24 on Tuesday, 7 December 2010, a day after it had risen 4.14% to 19.37 on Monday, 6 December 2010. India VIX is calculated based on the S&P CNX Nifty options prices. India VIX is a measure of the market’s expectation of volatility over the next 30 calendar days.

On Wednesday, 8 December 2010, a television channel said the Intelligence Bureau suspects insider trading in shares of Ruchi Soya, K S Oils and Karuturi Global. According to the report, a report on the Indian stock markets prepared by the Intelligence Bureau (IB) suspected that a market operator Vimal Rathod was accumulating shares of Ruchi Soya, KS Oils, Karuturi Global on behalf of investor C Shivasankaran. The IB has reportedly passed on the information to the Central Bureau of Investigation (CBI) and the market regulator, the Securities and Exchange Board of India (Sebi) for further action.

K S Oils today, 9 December 2010, denied media reports of involvement of the company and its executives in price manipulation. Shares of K S Oils were down 10.8% at Rs 30.55, off the day’s low of Rs 28.55. The stock had tumbled 14.7% on Wednesday, 8 December 2010, after a television channel reported about the IB report.

Shares of Ruchi Soya were down 6.89% at Rs 83.15, off the day’s low of Rs 79.65 after the company today, 9 December 2010, said the promoters have already denied reports of price manipulation. Ruchi Soya said promotes have not sold any shares in the current financial year, barring a nominal market sale of 12,255 shares representing 0.008% of the total promoters’ stake. Shares of Ruchi Soya had tanked 27% on Wednesday.

Shares of Glodyne Technoserve remained locked at 20% lower circuit at Rs 645.65 on BSE even as the company today, 9 December 2010, clarified to BSE that the company follows strong corporate governance practice and that there has been no communication received by the company from Sebi or any stock exchanges. The company said it was issuing the clarification in response to reports in a section of the media about price movement of the company’s shares. The stock had tumbled 17% on Wednesday, 8 December 2010.

IRB Infrastructure Developers rose 1.3% to Rs 193 after the company denied reports of involvement in rigging of its shares. The company issued the clarification during trading hours today, 9 December 2010. In its clarification to the stock exchanges denying reports of pricing rigging IRB Infrastructure Developers also said it had not received any official communication in this regard from the capital market regulator or exchanges or any other authorities. The IRB Infrastructure Developers stock had fallen 9.42% to settle at Rs 190.40 on Wednesday, 8 December 2010.

Capital market regulator the Securities & Exchange Board of India (Sebi), last week, penalised four companies including real estate developer Ackruti City, Murli Industries and Welspun Corp for colluding with stock brokers to rig their share prices. Late last month, the Central Bureau of Investigations unearthed a bribe-for-loan scandal, involving some officials from state-run banks and two other financial firms.

Foreign institutional investors (FIIs) dumped shares worth net Rs 1297.80 crore on Wednesday, 8 December 2010, much higher than an outflow of Rs 419.70 crore on Tuesday, 7 December 2010. The Sensex had lost 1.19% on Wednesday.

Foreign funds pressed sales of shares worth a net Rs 2209.35 crore during the first three trading sessions this week from Monday, 6 December 2010 to Wednesday, 8 December 2010, as per the data from the stock exchanges. The net outflow totaled Rs 727.88 crore so far this month, the stock exchanges data showed.

The food price index rose 8.69%, while the fuel price index climbed 9.99% in the year to 27 November 2010, government data on Thursday showed. In the prior week, annual food and fuel inflation stood at 8.60% and 9.99% respectively. The primary articles price index was up 12.66% in the latest week compared with an annual rise of 12.72% a week earlier.

The Reserve Bank of India is deeply conscious of the liquidity situation, Governor D Subbarao said on Thursday.

European shares hit a 26-month highs on Thursday on optimism the US tax cuts would boost consumption, with technology stocks boosted after ASML lifted its booking forecast. The key benchmark indices in France and UK rose by between 0.28% to 0.58%. But, Germany’s DAX fell 0.1%, reversing initial gains.

Asian markets mostly advanced on Thursday, 9 December 2010, after an agreement in the US to extend tax breaks sent US shares moderately higher on Wednesday, 8 December 2010. The key benchmark indices in Hong Kong, Indonesia, Japan, Singapore, South Korea and Taiwan rose by between 0.23% to 1.70%.

The upswing in Asian stocks came after modest gains in the US stocks on Wednesday, 8 December 2010, where stocks fluctuated before turning positive late in the session. A compromise in Washington to extend tax cuts boosted shares and sent bond prices sharply lower, as some investors expect it to lead to economic growth.

But, China’s Shanghai Composite index fell 1.32% on fears Beijing will soon move to tighten policy again. China early this week said it will release inflation data at the weekend instead of next week.

South Korea’s central bank held rates on Thursday after raising them last month, signaling it may resume tightening early next year unless the euro zone debt crisis and tensions with North Korea get out of control. The Bank of Korea left the base rate on hold at 2.50%.

Trading in US index futures indicated that the Dow could gain 34 points at the opening bell on Thursday, 9 December 2010. The market’s attention is set to turn to US initial jobless claims later on Thursday, before Chinese trade data for November comes out on Friday.

Back home, the next major trigger for the equity market is the advance tax payment of corporates for the third installment, which falls due on 15 December 2010. The advance tax figures will provide a cue on Q3 December 2010 corporate earnings.

The large capital flows into India are not a matter of concern, according to a mid-year review of the Indian economy tabled by Finance Minister Pranab Mukherjee in parliament on Tuesday. Foreign funds have made record purchases of Indian stocks this year.

According to mid-year review, the economy may grow by 9% during the year ending March 2011 (FY 2011). Average headline inflation is seen at 8.98% for the year, it said. The report indicated that the country’s fiscal deficit will not be more than 5.5% of its gross domestic product in FY 2011.

The Indian economy grew a robust 8.9% year-on-year in Q2 September 2010, maintaining the same pace of expansion as the previous quarter, boosted by farm output and manufacturing, government data released Tuesday, 30 November 2010 showed. The manufacturing sector grew an annual 9.8% and farm output grew an annual 4.4% in Q2 September 2010. The government revised upwards the Q1 June 2010 GDP growth to 8.9% from 8.8% earlier.

The Reserve Bank of India (RBI) will revisit its growth projection for the economy at its third-quarter policy review on 25 January 2011, RBI governor Duvvuri Subbarao said on Wednesday. The RBI currently projects the economy to grow at 8.5% in the fiscal year ending March 2011. The central bank chief expressed discomfort with the current levels of inflation. “Inflation is coming down but still above the Reserve Bank’s tolerance level; growth on the other hand has been encouraging,” he said.

The recent macro economic data has been strong. Business activity in India’s services sector surged to a four-month high in November 2010, driven by robust growth in new orders, a survey showed on Friday, 3 December 2010. The HSBC Markit Business Activity Index, based on a survey of 400 firms, rose to 60.1 in November from 56.2 in October. It was the best showing for the index since July, and the 19th straight month it has remained above the 50 mark that divides growth from contraction.

The manufacturing activity strengthened further in November 2010 and the strong growth momentum is showing up in rising inflation pressures, according to an HSBC survey released on Wednesday, 1 December 2010. The HSBC Manufacturing Purchasing Managers’ Index rose to 58.4 in November from 57.2 in October, the survey said.

Exports rose an annual 26.8% to $18.9 billion in November 2010, while imports for the month grew 11.2% on the year to $27.8 billion, as the provisional data released by Trade Secretary Rahul Khullar showed on Wednesday.

The BSE 30-share Sensex was down 454.12 points or 2.31% to 19,242.36. The Sensex slumped 535.61 points at the day’s low of 19,160.87 in late trade. The Sensex rose 74.61 points at the day’s high of 19,771.09 in early trade.

The S&P CNX Nifty was down 137.20 points or 2.32% to 5,766.50.

The BSE Mid-Cap index fell 4.48% and the BSE Small-Cap index shed 5.92%. Both these indices underperformed the Sensex.

The BSE Small-Cap index has plunged 2,498.87 points or 22.2% within a month from a high of 11,243.99 on 10 November 2010. The BSE Mid-Cap index has lost 1,470.63 points or 16.8% from a high of 8,730.30 on 10 November 2010.

Coming back to today’s trade, barring the BSE IT index all the sectoral indices on BSE were in the red. Consumer Durables index (down 6.29%), Realty index (down 4.76%), Metal index (down 3.67%), Healthcare index (down 3.53%), Auto index (down 3.33%), Banking sector index Bankex (down 3.24%), Oil & Gas index (down 2.8%), Power index (down 2.56%) and PSU index (down 2.55%) underperformed the Sensex.

BSE IT index (up 0.03%), Teck index (down 0.82%), FMCG index (down 0.93%) and Capital Goods index (down 2.18%) and outperformed the Sensex.

The market breadth, indicating the overall health of the market, was extremely weak. On BSE, 2683 shares fell while 304 shares rose. A total of 59 shares remained unchanged.

Among the 30-member Sensex pack, 27 fell while the rest rose.

BSE clocked turnover of Rs 4554 crore, higher than Rs 3510.73 crore on Wednesday, 8 December 2010.

Index heavyweight Reliance Industries fell 3.41% to Rs 984.35, off day’s high of Rs 1033. As per reports, the company is likely to increase crude imports from Latin America as it seeks better refining margins by processing heavier and cheaper grades of oil. Reliance Industries’ plants are complex refineries that turn low-quality crude into gasoline and diesel for sale mainly outside of India.

Banking stocks fell for the fourth day in a row on worries higher cost of funds will hit net interest margins. India’s second largest private sector bank by net profit HDFC Bank fell 1.82%, with the stock falling for the fourth straight day.

India’s largest bank by net profit and branch network State Bank of India (SBI) fell 4.33%, with the stock falling for the sixth straight day. SBI during trading hours on Monday, 6 December 2010, said it has raised deposit rates by 50 to 150 basis points across various maturities with effect from Tuesday, 7 December 2010. Among all slabs, the sharpest hike is in the 46 to 90-day slab, where the bank would offer 5.50% as against 4% earlier. In case of deposits with a maturity of 181 days to less than one year, the bank will now offer 7.25% as against 6% earlier. The bank will offer 8.5% for 555-day and 1,000-day deposits.

India’s largest private sector bank in terms of operating income ICICI Bank fell 4.41% with the stock falling for the fifth straight day. The bank has hiked its benchmark prime-lending rate and Floating Reference Rate (FRR) for consumer loans (including home loans) by 50 basis points with effect from 6 December 2010. It has also announced an increase in interest rates for various tenors of retail fixed deposits by 25-50 basis points with effect from 6 December 2010.

India’s top mortgage lender by total income, Housing Development Finance Corporation (HDFC), fell 1.85%, with the stock falling for the third straight day. On Friday, 3 December 2010 HDFC, hiked its benchmark lending rate by a steep 75 basis points, making home loan dearer for both existing and new borrowers. With this revision, the retail prime lending rate (RPLR) goes up from 14.25% to 15%.

Metal stocks reversed initial gains. National Aluminum Company, Jindal Steel & Power, Hindustan Zinc, Hindalco Industries, Sterlite Industries and JSW Steel fell by between 1.71% to 6.86%.

India’s largest steel maker by sales Tata Steel fell 3.1%, reversing initial gains. As per reports the company could team up with an Indian metals company or a miner to make a counter bid for Riversdale Mining, in response to Rio’s $3.5 billion (about Rs 15,750 crore) bid for coal-rich Australian miner Riversdale. Tata Steel is gearing up for a battle to control the Australian-listed miner that owns large coal mines in Mozambique and has become a target for global mining majors such as Anglo-American and Rio Tinto. Tata Steel which owns 24% in Riversdale, is one of the larger shareholders in the Australian company, and may have to spend upward of $1 billion to raise its shareholding to a controlling 51%, reports said

LMEX, a gauge of six metals traded on the London Metal Exchange rose 1.5% on Wednesday, 8 December 2010

Realty stocks fell as higher interest rates may affect demand for residential and commercial properties. Omaxe, Unitech, Ackruti City, DLF, Indiabulls Real Estate, and HDIL fell by between 2.34% to 10.4%.

Auto stocks declined for the second straight day in a row on worries a possible hike fuel hike may dent demand for vehicles. India’s top small car maker by sales Maruti Suzuki India fell 1.79%. India’s largest tractor and utility vehicles maker Mahindra & Mahindra (M&M) fell 3.43%. The company, last week, announced strong sales in November 2010.

Bajaj Auto fell 2.29%. The company’s total sales rose 8% to 2,99,231 units in November 2010 over November 2009. The figures were announced on Thursday, 2 December 2010.

Tata Motor fell 4.71%. As per reports, Tata Motors has told its vendors that it will raise production of Nano, hoping to build confidence after the small car sold only 509 units in November. Nano vendors, worried over falling sales and cut in production, have met the automobile major’s top brass in Mumbai. The company said in a separate communication to dealers that it plans to introduce new financing packages to boost sales. Many dealers have refrained from picking up fresh stocks as they were trying to sell existing cars.

Bike maker Hero Honda Motors fell 0.4%, reversing initial gains. As per reports the company has hiked the prices of its models by 1.5% to 2.5% to offset the rising input costs. The price increase amounts to Rs 500 for entry segment models, while the company’s high-end models Karizma and ZMR have the highest hike of Rs 1,500.

Consumer durables stocks fell on profit taking. Titan Industries, Rajesh Exports, Blue Star, Videocon Industries and Gitanjali Gems fell by between 3.09% to 20%.

India’s largest cigarette maker by sales ITC rose 0.39% on reports company is eying an acquisition in its paperboards and specialty papers division to add capacity to its paper production. The multi-business conglomerate, which is in talks with several companies in the paper production segment, may clinch a deal in the next six to eight months.

Telecom pivotals declined. India’s second largest listed cellular services provider by sales Reliance Communications slumped 5.66%, extending four-day 8.42% slide. The stock was the top loser from the Sensex pack.

India’s largest listed cellular services provider by sales Bharti Airtel slipped 2.58%, with the stock falling for the second straight day.

Software stocks bucked weak market on hopes extension of tax cuts by President Obama may give boost to consumption in the US, the biggest market for Indian IT firms. India’s second largest software company by sales Infosys gained 0.54%. Infosys Technologies is reportedly looking for an acquisition in the legal process outsourcing business and will consider domestic firms with a strong client base or US firms with technologies in the business.

India’s third largest IT exporter by sales Wipro rose 0.67%. The company recently signed a contract with Vodafone Essar to build and manage its fixed line telecom service business. Wipro will provide a wide range of services, including network design, network build, integration with existing IT OSS/BSS applications and managed services of the setup over three years. In addition, Wipro will build an enterprise network operating centre (NOC) to manage the operations of Vodafone Essar’s enterprise customers.

But, India’s largest software company by sales TCS fell 0.61%, reversing initial gains. The company announced during market hours on Friday, 3 December 2010 that the Uttar Pradesh state government has selected the company for its State Data Center project.

Capital goods stocks also fell on profit taking. Bhel, Larsen & Toubro, ABB and Punj Lloyd fell by between 0.47% to 4.45%.

K S Oils clocked highest volume of 1.98 crore shares on BSE. Resurgence Mines (1.66 crore shares), Alok Industries (1.23 crore shares), Sanraa Media (1.08 crore shares) and Ruchi Soya Industries (89.67 lakh shares) were the other volume toppers in that order.

State Bank of India clocked highest turnover of Rs 340.07 crore on BSE. Reliance Industries (Rs 109.12 crore), ICICI Bank (Rs 101.64 crore), Tata Steel (Rs 99.67 crore) and Tata Motors (Rs 82.55 crore) were the other turnover toppers in that order.

The BSE 30-share Sensex was down 25.77 points or 0.13, up close to 90 points from the day’s low and off close to 100 points from the day’s high. From a 2-1/2-month closing low of 19,136.61 on 26 November 2010, the Sensex had jumped 856.09 points or 4.47% in four trading sessions to settle at 19,992.70 on Thursday, 2 December 2010. Banking, realty and metal stocks fell. But, IT stocks rose.

The BSE Sensex closed below the psychological 20,000 mark after alternatively moving above and below that mark throughout the day. The 50-unit S&P CNX Nifty closed a tad below the psychological 6,000 mark after alternatively moving above and below that mark throughout the day. The market breadth was weak, with some small-cap and mid-cap stocks suffering steep losses.

Stocks were volatile. The key benchmark indices swung between gains and losses at the onset of the trading session. The market edged higher to hit a fresh intraday high in morning trade. The key benchmark indices once gain slipped into the red in mid-morning trade after hitting a fresh intraday high. The Sensex moved between positive and negative terrain near the flat line in early afternoon trade. The market slipped to a fresh intraday low in afternoon trade. The market cut losses after hitting a fresh intraday low in mid-afternoon trade.

NSE’s volatility index, India VIX, a gauge of traders’ perception of near-term risks in the market based on options prices, lost 1.06% at 18.60. The index had lost 2.08% to 18.80 on Thursday, 2 December 2010. The index had lost 7.29% to 19.20 on Wednesday, 1 December 2010. India VIX is calculated based on the S&P CNX Nifty options prices. India VIX is a measure of the market’s expectation of volatility over the next 30 calendar days.

The Securities and Exchange Board of India (Sebi) on Thursday barred founders and related entities of four firms from trading on the stock exchanges as these firms had indulged in “fraudulent and unfair” trade practices. The founders of Murli Industries, Ackruti City, Welspun Corp and Brushman India have been directed not to deal in any securities of their group companies, it said. Sebi also prohibited Sanjay Dangi and his group entities from dealing in any securities on charges of manipulation of share prices.

Sebi said that all four firms had raised funds through a qualified institutional placement or foreign currency convertible bonds during 2007-2009 and the Dangi group was observed to be trading substantially in the shares of these firms around the same period. Sebi also asked the stock exchanges to enable closing off any open positions in the futures and options segment and directed that these firms should not take any fresh positions.

The latest Sebi action comes close on the heels of the outbreak of a bribe-for-loan scandal last week and after last month’s telecom scam. A bribe-for-loan scandal spooked the banking sector and the stock market late last month. Chiefs of some of the top rung public sector banks and financial institutions were arrested by the Central Bureau of Investigation (CBI) on 24 November 2010, for allegedly sanctioning loans in return for bribes. The CBI has reportedly sent notices to 21 medium-to-large sized Indian companies regarding the ongoing probe into a financial bribery scandal.

Finance Minister Pranab Mukherjee, last week, asked all banks, financial institutions and insurance firms to look into their exposures to firms named by the Central Bureau of Investigation in a loans bribery scandal. A ministry statement quoted Pranab Mukherjee as calling on regulatory and other institutions to further improve safeguards.

Planning Commission deputy chairman Montek Singh Ahluwalia said on Friday, 3 December 2010, that India needs to monitor capital inflows due to the global uncertainty. He also said that the current account deficit in the current fiscal year could be wider than the previous fiscal year.

Business activity in India’s services sector surged to a four-month high in November 2010, driven by robust growth in new orders, a survey showed on Friday. The HSBC Markit Business Activity Index, based on a survey of 400 firms, rose to 60.1 in November from 56.2 in October. It was the best showing for the index since July, and the 19th straight month it has remained above the 50 mark that divides growth from contraction.

European shares were mostly lower in volatile trade on Friday, with the market awaiting direction from the US monthly non-farm payrolls report. The key benchmark indices in Germany and UK fell by between 0.02% to 0.06%. But, France’s CAC 40 rose 0.45%.

As per the market buzz, the European Central Bank (ECB) has stepped up buying of stressed euro-zone government bonds. Meanwhile, rating agency Standard & Poor’s said Thursday it may downgrade Greece’s long-term debt if new European bailout rules prove onerous to private holders of the country’s bonds. S&P said it will decide whether to downgrade Greece within three months, by which time the new debt-crisis rules will be clear. S&P issued a similar warning about Portugal this week.

Asian stocks pared gains after a firm start on Friday, 3 December 2010, and were trading mixed on caution ahead of the influential US non-farm payroll data due later in the global day. The key benchmark indices in Japan, Indonesia, South Korea and Taiwan were up by between 0.05% to 0.45%. China’s Shanghai Composite fell 0.04% and Hong Kong’s Hang Seng index dipped 0.55%, on lingering concerns about further tightening to cool inflation. Singapore’s Straits Times index fell 0.8%.

China’s purchasing managers index for the non-manufacturing sector fell to a nine-month low of 53.2 in November from 60.5 in October, the China Federation of Logistics and Purchasing (CFLP) said on Friday.

Trading in US index futures indicated a flat opening of US stocks on Friday, 3 December 2010. The latest data showed a gauge of US jobless benefits hit a new two-year low last week and pending home sales in the world’s biggest economy unexpectedly rose in October 2010.

The US government will release the data on non-farm payroll later in the global day today, 3 December 2010. The non-farm payrolls number is forecast to increase by 144,000 in November from October, when it climbed by 151,000. The jobless rate, meanwhile, may stand unchanged at 9.6%, as per economists’ expectations. A strong US jobs report may lead investors to expect that the Federal Reserve could scale back its latest quantitative easing measures.

Closer home, Chief Economic Adviser to the finance ministry, Kaushik Basu on Thursday, 2 December 2010, said the government will upwardly revise its economic growth forecast for the fiscal year that ends in March 2011. Basu also said he expected headline inflation in November, due for release on 14 December 2010 to ease further.

The latest data showed a continuation of the recent trend of easing of food inflation. The food price index rose 8.60% while the fuel price index climbed 9.99% in the year to 20 November 2010, government data on Thursday showed. In the prior week, annual food and fuel inflation stood at 10.15% and 10.57% respectively. The primary articles price index was up 12.72% in the latest week compared with an annual rise of 13.38% a week earlier.

India’s merchandise exports rose 21.3% to $18 billion in October 2010 over October 2009, boosting hopes that the country may be able to reach the $200 billion target fixed for the current fiscal. Imports during the period grew by 6.8% to $ 27.68 billion, leaving a trade deficit of $9.72 billion, data released on 1 December 2010, showed.

India’s manufacturing activity strengthened further in November 2010 and the strong growth momentum is showing up in rising inflation pressures, according to an HSBC survey released on Wednesday, 1 December 2010. The HSBC Manufacturing Purchasing Managers’ Index rose to 58.4 in November from 57.2 in October, the survey said.

The Indian economy grew a robust 8.9% year-on-year in Q2 September 2010, maintaining the same pace of expansion as the previous quarter, boosted by farm output and manufacturing, government data released Tuesday, 30 November 2010 showed. The manufacturing sector grew an annual 9.8% and farm output grew an annual 4.4% in Q2 September 2010. The government revised upwards the Q1 June 2010 GDP growth to 8.9% from 8.8% earlier.

Finance Minister Pranab Mukherjee on Tuesday said GDP growth would be between 8.5% to 8.75% in the current fiscal that ends in March 2011 (FY 2011). Chairman of the Prime Minister’s Economic Advisory Council C. Rangarajan said the economy is expected to grow 9% in the year to March 2012 (FY 2012). Rangarajan also said the government may reassess FY 2011 growth expectations and that it was “not impossible” to reach 9% growth in the financial year.

The output of key infrastructure industries surged by a robust 7% in October 2010, against a 3.9% growth recorded in the same month last year, helped by a strong showing by the electricity, crude oil and the finished steel sectors. The latest data for the six core sector showed a sharp rebound from the output in September 2010, when growth in these sectors had slipped to 2.7%.

The next major trigger for the equity market is the advance tax payment of corporates for the third installment, which falls due on 15 December 2010. The advance tax figures will provide a cue on Q3 December 2010 corporate earnings.

But, year-end profit taking may cap upside on the domestic bourses in the near term. Funds based in US and Europe follow calendar year as their accounting year.

The BSE 30-share Sensex was down 25.77 points or 0.13% to 19,992.89. The Sensex rose 75.11 points at the day’s high of 20,067.81 in morning trade. The index fell 115.58 points at the day’s low of 19,877.12 in mid-afternoon trade.

The S&P CNX Nifty was down 18.90 points or 0.31% at 5992.80. The Nifty hit a high of 6,025.40 and low of 5,964.25.

The market breadth, indicating the health of the market, was weak. On BSE, 2,389 shares fell while 689 shares rose. A total of 63 shares remained unchanged. The breadth alternatively swung between positive and negative zone in early trade.

Among the 30-member Sensex pack, 17 fell while the rest rose.

BSE clocked turnover of Rs 3958 crore, lower than Rs 4440.70 crore on Thursday, 2 December 2010.

The BSE Mid-Cap index fell 2.03% and the BSE Small-Cap index fell 3%. Both these indices underperformed the Sensex.

Most of the sectoral indices on BSE fell. BSE Realty index (down 4.29%), Consumer Durables index (down 3.63%), Metal index (down 1.25%), banking sector index Bankex (down 0.9%), Power index (down 0.74%), PSU index (down 0.56%), Oil & Gas index (down 0.34%) and Healthcare index (down 0.17%) underperformed the Sensex.

BSE IT index (up 0.66%), Auto index (up 0.3%), Teck index (up 0.29%), FMCG index (up 0.16%) and Capital Goods index (down 0.15%) outperformed the Sensex.

Index heavyweight Reliance Industries (RIL) was down 0.31% to Rs 1006.40. The stock hit high of Rs 1022.50 and low of Rs 998.25. As per recent reports, the natural gas production from RIL’s East Coast block has dropped by about 15% to about 45-46 million standard cubic metres per day (mscmd) from 53-54 mscmd. The production from D-1 and D-3 gas fields in the KG-D6 block has dropped due to reservoir complexities.

Software stocks rose on a slew of recent better-than-expected US economic data. US is the key market for Indian IT firms. India’s largest software company by sales TCS rose 0.33%, with the stock gaining for the second straight day. The company announced during market hours today that Uttar Pradesh selsected company for its State Data Center project.

India’s second largest software company by sales Infosys rose 0.89%, with the stock gaining for the third straight day. India’s third largest software company by sales Wipro rose 0.68%, with the stock gaining for the second straight day.

India’s largest bike maker by sales Hero Honda Motors gained 2.47% on bargain hunting after sliding 7.27% on Thursday on reports the Hero Group has agreed to increase royalty payments made to Japanese automaker Honda Motor Co. to 8% of overall annual sales in return for a technology makeover and a stake sale. It was the top gainer from the Sensex pack.

Hero Honda Motors would reportedly make the increased payments until 2014, when the present technology sharing agreement will lapse and be renegotiated. Negotiations are at an advanced stage and a final decision will be made in the next few days, reports suggest.

Other auto stocks were mixed. India’s top small car maker by sales Maruti Suzuki India fell 0.58%, reversing initial gains. Total sales rose 28.20% to 1.12 lakh vehicles in November 2010 over November 2009. The figures were announced during trading hours on Wednesday, 1 December 2010.

India’s largest tractor and utility vehicles maker Mahindra & Mahindra (M&M) rose 1.19%. The stock had jumped 4.53% on Wednesday, 1 December 2010, boosted by strong sales in November 2010.

India’s largest truck maker by sales Tata Motors fell 0.42%. The company’s total vehicle sales rose 1% to 54,622 units in November 2010 over November 2009. The figures were announced during market hours on Wednesday, 1 December 2010.

Bajaj Auto rose 1.93%. The company’s total sales rose 8% to 2,99,231 units in November 2010 over November 2009. The figures were announced during trading hours on Thursday, 2 December 2010.

Ackruti City slumped 19.99% after the Securities and Exchange Board of India (Sebi) on Thursday barred founders and related entities from trading on the stock exchanges as it had indulged in “fraudulent and unfair” trade practices.

Among other realty stocks Parsvnath Developers, Anant Raj Industries, HDIL, Indiabulls Real Estate, DLF and Unitech fell by between 2.36% to 8.08%.

Banking stocks fell on profit taking. The Reserve Bank of India (RBI) Governor Duvvuri Subbarao said on Friday there was a strong case to review and recast banking legislation. He also said that banks need to increase their deposit rates and reduce lending rates to accelerate the savings, investment rate and boost a double-digit growth.

India’s largest private sector bank in terms of operating income ICICI Bank fell 0.69% to Rs 1181.95. The stock came off the day’s low of Rs 1168.15. The private sector bank has recently withdrawn a special housing loan scheme. The schemes have been under the Reserve Bank of India’s scrutiny on concerns about asset quality in the housing loan sector. India’s second largest private sector bank by net profit HDFC Bank was flat.

India’s largest bank by net profit and branch network State Bank of India fell 0.85%. The bank is planning to launch a rights issue in January-March, Chairman O.P. Bhatt said today. Among other PSU stocks, Bank of Baroda and Bank of India fell by between 0.84% to 2.4%. But, Punjab National Bank rose 0.21%.

The government on Wednesday, 1 December 2010, approved additional capital infusion of Rs 6000 crore in 10 public sector banks with an objective to raise its holding to a minimum 58% in all state-run banks.

India’s top mortgage lender by total income Housing Development Finance Corporation fell 0.85%. The company on Wednesday, 1 December 2010, said it would not extend a special housing loan scheme that was available until Tuesday, 30 November 2010.

Metal shares fell on profit taking. Tata Steel, Hindalco Industries, Hindustan Zinc, Bhushan Steel, Sterlite Industries, JSW Steel and Steel Authority of India fell by between 0.16% to 5.84%.

LMEX, a gauge of six metals traded on the London Metal Exchange rose 1.61% on Thursday, 2 December 2010.

Welspun Corp slumped 26.84% after the Securities and Exchange Board of India (Sebi) on Thursday barred founders and related entities from trading on the stock exchanges as the firm had indulged in “fraudulent and unfair” trade practices.

India’s largest cigarette maker by sales ITC rose 0.41%, reversing initial losses triggered by reports the company has halted production over a health ministry order that every pack that cigarette maker sell should carry a stark image of mouth cancer as a deterrent to smokers. The stock came off the day’s low of Rs 164.70.

Telecom pivotals fell on profit taking. India’s largest listed cellular services provider by sales Bharti Airtel fell 0.17%. India’s second largest listed cellular services provider by sales Reliance Communications lost 1.62%, snapping three-day gains, on profit booking. Idea Cellular fell 1.13%.

India’s largest engineering and construction firm by sales Larsen & Toubro rose 0.45%, reversing initial losses after the company said during market hours today that it won a Rs 716-crore order in United Arab Emirates.

Cals Refineries clocked the highest volume of 2.15 crore shares on BSE. Karuturi Global (2.09 crore shares), Resurgence Mines (1.41 crore shares), Delta Corp (1.01 crore shares) and Power Grid Corporation of India (98.53 lakh shares) were the other volume toppers in that order.

State Bank of India clocked the highest turnover of Rs 142.55 crore on BSE. Welspun Corp (Rs 137.23 crore), Delta Corp (Rs 107.06 crore), Tata Motors (98.71 crore) and Power Grid Corporation of India (Rs 98.48 crore) were the other turnover toppers in that order.

The market has staged a strong comeback after a recent steep slide. From a 2-1/2-month closing low of 19,136.61 on 26 November 2010, the Sensex jumped 856.09 points or 4.47% in four trading sessions.

The market breadth was strong. Index heavyweight Reliance Industries (RIL) gained. Realty stocks edged higher for the third day in a row on bargain hunting after a recent steep slide triggered by the outbreak of a bank loans bribery scandal last week. Software stocks rose on a slew of recent better-than-expected US economic data. Consumer durables, banking and IT stocks also rose.

The market jumped in early trade on positive global cues. The market pared gains in morning trade. A bout of volatility was witnessed as the key benchmark indices regained strength in mid-morning trade on firm Asian stocks. The Sensex moved in a range in early afternoon trade. Gains in index heavyweight Reliance Industries (RIL) helped the key benchmark indices recover from lower level in afternoon trade. The market pared once again pared gains in mid-afternoon trade. The market came off lows in late trade.

NSE’s volatility index, India VIX, a gauge of traders’ perception of near-term risks in the market based on options prices, was down 2.08% at 18.80. The index had lost 7.29% to 19.20 on Wednesday, 1 December 2010. India VIX is calculated based on the S&P CNX Nifty options prices. India VIX is a measure of the market’s expectation of volatility over the next 30 calendar days.

As per media reports, the Intelligence Bureau (IB) has identified Ketan Parekh as one of the key players manipulating the stock prices of key companies in the 2010 bull run. Parekh masterminded the 2002 securities scam that rocked the country. Parekh and his associates, in collusion with promoters, “manipulated share prices of many scrips through a web of front entities and demat accounts,” says a report from IB. The IB report further adds that Parekh along with a Kolkata-based associate, planned to manipulate the initial share sale of many companies wherein “cartel members would secure 50% of IPO proceeds from promoters of unknown and fringe proceeds after their listings.”

The Reserve Bank of India (RBI) deputy governor Governor Subir Gokarn on Wednesday 1 December 2010, said the RBI’s monetary stance is still anti-inflationary and said the RBI would not liberalise the key policy ratio viz. the cash reserve ratio (CRR) to leave more funds in the hands of banks. Earlier this week, the RBI reduced the statutory liquidity ratio (SLR), the percentage of deposits kept by banks in government securities by two per cent to infuse liquidity in the cash system.

Gokarn said RBI’s actions are conditioned by the need to prevent food inflation from spilling over to more broader base inflation pressure and as the economy is reaching capacity limits that risk is high. The RBI’s next policy review–a mid-quarter policy review–is due on 16 December 2010.

The food price index rose 8.60% while the fuel price index climbed 9.99% in the year to 20 November 2010, government data on Thursday showed. In the prior week, annual food and fuel inflation stood at 10.15% and 10.57% respectively. The primary articles price index was up 12.72% in the latest week compared with an annual rise of 13.38% a week earlier.

European shares rose on Thursday, building on strong gains in the previous session, with investors expecting the European Central Bank to announce new measures to tackle the euro zone debt crisis. The key benchmark indices in France, Germany and UK rose by between 0.06% to 0.6%.

Investors are awaiting the outcome a scheduled policy meeting from the decision by the European Central Bank (ECB) later in the global day. All eyes are on whether the ECB decides to expand its bond-purchasing programs–implemented to ease market jitters over the region’s sovereign bond crisis.

The number of registered jobless in Spain rose 0.6% in November from a month earlier to 4.1 million, the Labour Ministry said on Thursday.

Asian stocks rose on Thursday, 2 December 2010, after improved economic indicators powered big gains on Wall Street and worries eased about Europe’s debt problems. The key benchmark indices in China, Hong Kong, Japan, Indonesia, South Korea, Singapore and Taiwan rose by between 0.5% to 2.09%.

Signs that the US job market thawed in November jump-started the advance in US markets on Wednesday, 1 December 2010. ADP Employer Services, a payroll company, said small businesses added the largest amount of workers in three years last month. Improved economic growth in the US, the world’s No. 1 economy, would be a boon for export-reliant Asia. The Institute of Supply Management said its index of manufacturing activity rose in November for the 16th month.

Back home, the initial public offer (IPO) of state-run MOIL, the largest manganese ore producer in India, was subscribed a massive 56.43 times.

India’s merchandise exports rose 21.3% to $18 billion in October 2010 over October 2009, boosting hopes that the country may be able to reach the $200 billion target fixed for the current fiscal. Imports during the period grew by 6.8% to $ 27.68 billion, leaving a trade deficit of $9.72 billion, data released today, 1 December 2010, showed.

India’s manufacturing activity strengthened further in November 2010 and the strong growth momentum is showing up in rising inflation pressures, according to an HSBC survey released on Wednesday, 1 December 2010. The HSBC Manufacturing Purchasing Managers’ Index rose to 58.4 in November from 57.2 in October, the survey said. The data on Business Activity Index, indicating the performance of the services sector, is due for release in the coming days.

The Indian economy grew a robust 8.9% year-on-year in Q2 September 2010, maintaining the same pace of expansion as the previous quarter, boosted by farm output and manufacturing, government data released Tuesday, 30 November 2010 showed. The manufacturing sector grew an annual 9.8% and farm output grew an annual 4.4% in Q2 September 2010. The government revised upwards the Q1 June 2010 GDP growth to 8.9% from 8.8% earlier.

Finance Minister Pranab Mukherjee on Tuesday said GDP growth would be between 8.5% to 8.75% in the current fiscal that ends in March 2011 (FY 2011). Chairman of the Prime Minister’s Economic Advisory Council C. Rangarajan said the economy is expected to grow 9% in the year to March 2012 (FY 2012). Rangarajan also said the government may reassess FY 2011 growth expectations and that it was “not impossible” to reach 9% growth in the financial year.

The output of key infrastructure industries surged by a robust 7% in October 2010, against a 3.9% growth recorded in the same month last year, helped by a strong showing by the electricity, crude oil and the finished steel sectors. The latest data for the six core sector showed a sharp rebound from the output in September 2010, when growth in these sectors had slipped to 2.7%.

A bribe-for-loan scandal spooked the banking sector and the stock market recently. Chiefs of some of the top rung public sector banks and financial institutions were arrested by the Central Bureau of Investigation (CBI) on 24 November 2010, for allegedly sanctioning loans in return for bribes. The Securities & Exchange Board of India (Sebi) is reportedly examining the possibility of insider trading in shares of at least nine companies. The Sebi has joined the CBI to probe the possibility of insider trading in shares of these companies, named by the investigator as involved in the loan scandal, recent reports suggest.

The CBI has reportedly sent notices to 21 medium-to-large sized Indian companies regarding the ongoing probe into a financial bribery scandal. The cases are limited to individuals and unlikely to create a large fallout, a news agency report said, late last week, citing an unnamed senior CBI official. The CBI is not currently considering widening its probe into bribery over loans to corporates, the report added.

Finance Minister Pranab Mukherjee, last week, asked all banks, financial institutions and insurance firms to look into their exposures to firms named by the Central Bureau of Investigation in a loans bribery scandal. A ministry statement quoted Pranab Mukherjee as calling on regulatory and other institutions to further improve safeguards.

The next major trigger for the equity market is the advance tax payment of corporates for the third installment, which falls due on 15 December 2010. The advance tax figures will provide a cue on Q3 December 2010 corporate earnings.

But, year-end profit taking may cap upside on the domestic bourses in the near term. Funds based in US and Europe follow calendar year as their accounting year.

The BSE 30-share Sensex was up 142.70 points or 0.72% to 19,992.70. The Sensex rose 234.25 points at the day’s high of 20,084.25 in early trade. The index rose 67.77 points at the day’s low of 19,917.77 in morning trade.

The S&P CNX Nifty was up 50.80 points or 0.85% at 6011.70. The Nifty hit a high of 6,029.50 in early trade.

The BSE Mid-Cap index rose 1.07% and the BSE Small-Cap index rose 1.12%. Both these indices outperformed the Sensex.

Except the BSE Capital Goods index and the BSE Auto index, all the other sectoral indices on BSE rose. BSE Realty index (up 2.29 %), Metal index (up 1.48%), IT index (up 1.47%), Oil & Gas index (up 1.47%), Consumer Durables index (up 1.35%), banking sector index Bankex (up 1.23%) and Teck index (up 0.99%), outperformed the Sensex.

BSE Auto index (down 0.3%), Capital Goods index (down 0.26%), Power index (up 0.01%), FMCG index (up 0.06%), Healthcare index (up 0.51%) and BSE PSU index (up 0.59%) underperformed the Sensex.

The market breadth, indicating the health of the market, was strong. On BSE, 1,933 shares advanced while 1045 shares declined. A total of 72 shares remained unchanged.

Among the 30-member Sensex pack, 17 gained while the rest slipped.

The BSE clocked turnover of Rs 4412 crore, lower than Rs 4619.48 crore on Wednesday, 1 December 2010.

Index heavyweight Reliance Industries (RIL) rose 1.96% to Rs 1009.50. The stock hit a high of Rs 10011.50 and low of Rs 996.15. As per recent reports, the natural gas production from RIL’s East Coast block has dropped by about 15% to about 45-46 million standard cubic metres per day (mscmd) from 53-54 mscmd. The production from D-1 and D-3 gas fields in the KG-D6 block has dropped due to reservoir complexities.

Metal and mining shares saw an across the board surge after strong investor response to the MOIL issue. Tata Steel, Hindalco Industries, Hindustan Zinc, National Aluminium Company, Bhushan Steel, Sterlite Industries, JSW Steel and Steel Authority of India rose by between 0.69% to 3.13%.

LMEX, a gauge of six metals traded on the London Metal Exchnage rose 2.55% on Wednesday, 1 December 2010.

Consumer durables stocks rose on renewed buying. Videocon Industries, Blue Star, Rajesh Exports, Asian Star Company and Gitanjali Gems rose by between 0.73% to 3.68%.

Most realty stocks edged higher for the third day on bargain hunting after a recent steep slide triggered by the outbreak of a bank loans bribery scandal last week, mainly involving realty and infrastructure firms. DLF, Indiabuuls Real Estate, HDIL, Ansal Properties, Omaxe, Unitech, Sobha Developers and Orbit Corporation rose by between 0.69% to 9.09%.

Banking stocks gained on fresh buying on expectations of a strong credit offtake in a growing economy. India’s second largest private sector bank by net profit HDFC Bank advanced 1.16%, with the stock gaining for the second straight day.

India’s largest private sector bank in terms of operating income ICICI Bank rose 1.99%, with the stock gaining for the second straight day. As per recent reports, the bank has withdrawn a special housing loan scheme with immediate effect. The schemes have been under the Reserve Bank of India’s scrutiny on concerns about asset quality in the housing loan sector.

But, India’s largest bank by net profit and branch network State Bank of India 0.24%, reversing initial gains. Among other PSU stocks, Bank of Baroda, Bank of India and Punjab National Bank rose by between 1.37% to 2.06%.

The government on Wednesday, 1 December 2010, approved additional capital infusion of Rs 6000 crore in 10 public sector banks with an objective to raise its holding to a minimum 58% in all state-run banks.

India’s top mortgage lender by total income Housing Development Finance Corporation rose 0.79%, with the stock gaining for the second straight day after the company on Wednesday, 1 December 2010, said it would not extend a special housing loan scheme that was available until Tuesday, 30 November 2010.

Software stocks rose on a slew of recent better-than-expected US economic data. US is the key market for Indian IT firms. India’s largest software company by sales TCS rose 1.48%, after the company said on Thursday it opened a back office services centre in Manila, its first such facility in Southeast Asia. Back office services revenue was 11.5% of TCS’ total revenue in the year to March 2010, the company said.

India’s second largest software company by sales Infosys rose 1.34%. India’s third largest software company by sales Wipro rose 2.57%.

India’s largest bike maker by sales Hero Honda Motors slumped 7.27% on reports the Hero Group has agreed to increase royalty payments made to Japanese automaker Honda Motor Co. to 8% of overall annual sales in return for a technology makeover and a stake sale. It was the top loser form the Sensex pack.

Hero Honda Motors would reportedly make the increased payments until 2014, when the present technology sharing agreement will lapse and be renegotiated. Negotiations are at an advanced stage and a final decision will be made in the next few days, reports suggest.

Other auto stocks saw mixed trend. India’s top small car maker by sales Maruti Suzuki India fell 0.35% reversing initial gains. Total sales rose 28.20% to 1.12 lakh vehicles in November 2010 over November 2009. The figures were announced during trading hours on Wednesday, 1 December 2010.

India’s largest truck maker by sales Tata Motors rose 2.5%, extending Wednesday’s 4.13% jump. The company’s total vehicle sales rose 1% to 54,622 units in November 2010 over November 2009. The figures were announced during market hours on Wednesday, 1 December 2010.

India’s largest tractor and utility vehicles maker Mahindra & Mahindra (M&M) fell 1.45%. The stock had jumped 4.53% on Wednesday, 1 December 2010, boosted by strong sales in November 2010.

Bajaj Auto fell 0.23%, reversing initial gains. The company’s total sales rose 8% to 2,99,231 units in November 2010 over November 2009. The figures were announced during trading hours today, 2 December 2010.

India’s largest engineering and construction firm by sales Larsen & Toubro fell 0.86%. The company said during market hours today it has won Rs 415-crore order for thermal power plant construction.

Sugar shares rose on reports the government will take a decision on permitting regular exports of sugar towards the end of December 2010 following an assessment of total production of the sweetener in the 2010-11 crop year. Dhampur Sugars, Shree Renuka Sugars, Bajaj Hindusthan and Balrampur Chini rose by between 0.94% to 3.79%.

Karuturi Global clocked highest volume of 2.4 crore shares on BSE. Cals Refineries (2.07 crore shares), Birla Power Solutions (1.7 crore shares), Resurgence Mines (1.46 crore shares) and Sanraa Media (1.13 crore shares) were the other volume toppers in that order.

State Bank of India clocked the highest turnover of Rs 217.58 crore on BSE. Tata Motors (132.86 crore), Power Grid Corporation of India (Rs 97.75 crore), LIC Housing Finance (Rs 84.09 crore) and ABG Shipyard (Rs 83.80 crore) were the other turnover toppers in that order.

From a 2-1/2-month closing low of 19,136.61 on Friday, 26 November 2010, the Sensex has jumped 713.39 points or 3.72% in the last three trading sessions.

The market breadth was strong. Metal and mining shares saw an across the board surge after strong investor response to the MOIL issue. Banking stocks gained on fresh buying on expectations of a strong credit offtake in a growing economy. Auto stocks, barring Maruti Suzuki India, edged higher on higher November 2010 sales. Telecom pivotals saw divergent trend. Software stocks saw mixed trend and underperformed the Sensex.

NSE’s volatility index, India VIX, a gauge of traders’ perception of near-term risks in the market based on options prices, shed 7.29% to 19.20. The index had lost 2.82% to 20.71 on Tuesday, 30 November 2010. The index had lost 5.62% to 21.31 on Monday, 29 November 2010. The index had risen 4.39% to 22.58 on Friday, 26 November 2010, a day after it had plunged 12.36% to 21.63 on Thursday, 25 November 2010. India VIX is calculated based on the S&P CNX Nifty options prices. India VIX is a measure of the market’s expectation of volatility over the next 30 calendar days.

The market edged higher in early trade. Stocks soon extended gains. The Sensex surged to a fresh intraday high in mid-morning trade on strong manufacturing data for the month just gone. The market pared gains in early afternoon trade. The market regained strength in afternoon trade. The market struck a fresh intraday high in mid-afternoon trade on positive global cues. The market pared gains later. The market surged to a fresh intraday high in late trade.

The initial public offer (IPO) of state-run MOIL, the largest manganese ore producer in India, was subscribed a massive 53.84 times by 16:00 IST on the last day of the bidding for the issue today, 1 December 2010. Bidding for the issue by institutional investors ended on Tuesday, 30 November 2010.

Meanwhile, the Lok Sabha today, 1 December 2010, approved a $9.8-billion additional spending bill to cover various payments including outstanding government debt, food and fertiliser subsidies, and government pensions. The bill was passed by a voice vote in parliament, a type of vote allowing the government to bypass a three-week deadlock between the ruling Congress party-led coalition and opposition parties caused by rows over a series of corruption scandals.

India’s merchandise exports rose 21.3% to $18 billion in October 2010 over October 2009, boosting hopes that the country may be able to reach the $200 billion target fixed for the current fiscal. Imports during the period grew by 6.8% to $ 27.68 billion, leaving a trade deficit of $9.72 billion, data released today, 1 December 2010 showed.

India’s manufacturing activity strengthened further in November 2010 and the strong growth momentum is showing up in rising inflation pressures, according to an HSBC survey released on Wednesday, 1 December 2010. The HSBC Manufacturing Purchasing Managers’ Index rose to 58.4 in November from 57.2 in October, the survey said.

November marked the 20th straight month that the PMI stayed above the 50-point level, which separates expansion from contraction in the level of activity at local factories. “A spike in the backlog of works confirms that capacity is tight, which together with rising input and output prices strengthens the case for continued tightening by the Reserve Bank of India,” HSBC said, adding that rate hikes are expected to resume in early 2011.

The data on Business Activity Index, indicating the performance of the services sector, is due for release in the coming days.

The next major trigger for the equity market is the advance tax payment of corporates for the third installment, which falls due on 15 December 2010. The advance tax figures will provide a cue on Q3 December 2010 corporate earnings.

But, year-end profit taking may cap upside on the domestic bourses in the near term. Funds based in US and Europe follow calendar year as their accounting year.

European stocks edged higher on Wednesday, 1 December 2010, after a rebound in Asian markets, with banking and insurance stocks among the main beneficiaries. The key benchmark indices in UK, Germany and France were up by between 0.3% to 1.57%.

The cost of insuring Portuguese, Spanish and other euro-zone government debt against default fell sharply Wednesday morning, retreating from record levels.

Global rating agency Standard & Poor’s on Tuesday put Portugal’s credit rating on review for a possible downgrade, saying the country may have to turn to the European Union and the International Monetary Fund (IMF) for funding.

Asian stocks ended mostly higher after a choppy session Wednesday, as a fall in the US dollar against several major currencies helped improve investors’ appetite for risk, while commodity shares pushed higher. The key benchmark indices in South Korea, China, Japan, Singapore, Hong Kong, Taiwan and Indonesia were up by between 0.12% to 2.49%.

Chinese stocks recovered from lower level, shrugging off policy tightening fears. China’s manufacturing activity expanded at a faster pace in November than in October, and input prices rose sharply, raising concerns that further tightening measures are needed to contain inflation.

US stocks declined on Tuesday, 30 November 2010, on continued worries about the European sovereign-debt crisis. The Dow Jones Industrial Average lost 46.47 points, or 0.42%, to 11006.02. The Nasdaq Composite Index shed 26.99, or 1.07%, to 2498.23 and the Standard & Poor’s 500-stock index slipped 7.21, or 0.61%, to 1180.55.

Meanwhile, the US consumer confidence rose to a five-month high in November 2010, data on Tuesday showed. The Conference Board said its index of consumer confidence rose to 54.1 in November, the highest reading since June and up from a revised 49.9 in October. Meanwhile, the Chicago Purchasing Managers’ Index rose to 62.5 in November from 60.6 in October.

Trading in US index futures indicated that the Dow could jump 99 points at the opening bell on Wednesday, 1 December 2010. US index futures reversed initial fall.

Closer home, the Indian economy grew a robust 8.9% year-on-year in Q2 September 2010, maintaining the same pace of expansion as the previous quarter, boosted by farm output and manufacturing, government data released Tuesday, 30 November 2010 showed. The manufacturing sector grew an annual 9.8% and farm output grew an annual 4.4% in Q2 September 2010. The government revised upwards the Q1 June 2010 GDP growth to 8.9% from 8.8% earlier.

Finance Minister Pranab Mukherjee on Tuesday said GDP growth would be between 8.5% to 8.75% in the current fiscal that ends in March 2011 (FY 2011). Chairman of the Prime Minister’s Economic Advisory Council C. Rangarajan said the economy is expected to grow 9% in the year to March 2012 (FY 2012). Rangarajan also said the government may reassess FY 2011 growth expectations and that it was “not impossible” to reach 9% growth in the financial year.

The output of key infrastructure industries surged by a robust 7% in October 2010, against a 3.9% growth recorded in the same month last year, helped by a strong showing by the electricity, crude oil and the finished steel sectors. The latest data for the six core sector showed a sharp rebound from the output in September 2010, when growth in these sectors had slipped to 2.7%.

The Reserve Bank of India on Monday, 29 November 2010, decided to extend its liquidity support facility to banks to further ease the funds crunch. The second LAF, which will be conducted daily at 16:15 IST, will be available till 28 January 2011, against 16 December 2010 announced earlier. The RBI has also further eased Statutory Liquidity Ratio (SLR) requirements as a temporary measure. Banks can now maintain a lower SLR that is two percentage points less than the current requirement. Earlier, they were allowed a one percentage point relief.

A bribe-for-loan scandal spooked the banking sector and the stock market recently. Chiefs of some of the top rung public sector banks and financial institutions were arrested by the Central Bureau of Investigation (CBI) on 24 November 2010, for allegedly sanctioning loans in return for bribes. The Securities & Exchange Board of India (Sebi) is reportedly examining the possibility of insider trading in shares of at least nine companies. The Sebi has joined the CBI to probe the possibility of insider trading in shares of these companies, named by the investigator as involved in the loan scandal, recent reports suggest.

The CBI has reportedly sent notices to 21 medium-to-large sized Indian companies regarding the ongoing probe into a financial bribery scandal. The cases are limited to individuals and unlikely to create a large fallout, a news agency report said, late last week, citing an unnamed senior CBI official. The CBI is not currently considering widening its probe into bribery over loans to corporates, the report added.

Finance Minister Pranab Mukherjee, last week, asked all banks, financial institutions and insurance firms to look into their exposures to firms named by the Central Bureau of Investigation in a loans bribery scandal. A ministry statement quoted Pranab Mukherjee as calling on regulatory and other institutions to further improve safeguards.

The BSE 30-share Sensex jumped 328.75 points or 1.68% to 19,850. The Sensex rose 366.01 points at the day’s high of 19,887.26 in late trade. The index rose 3.9 points at the day’s low of 19,525.15 in early trade.

The S&P CNX Nifty was up 98.20 points or 1.67% at 5,960.90.

The BSE Mid-Cap index rose 2.83% and the BSE Small-Cap index rose 3.14%. Both these indices outperformed the Sensex.

Except BSE Teck index, all the other sectoral indices on BSE rose. BSE Metal index (up 3.39%), PSU index (up 3.18%), Realty index (up 3.11%), Bankex (up 2.96%), Capital Goods index (up 2.88%), Auto index (up 1.9%), outperformed the Sensex.

BSE Teck index (down 0.03%), IT index (up 0.11%), FMCG index (up 0.18%), Oil & Gas index (up 1.48%), Healthcare index (up 1.53%), Power index (up 1.61%), Consumer Durables index (up 1.61%), underperformed the Sensex.

The market breadth, indicating the health of the market, was strong. On BSE, 2428 shares advanced while 587 shares declined. A total of 65 shares remained unchanged.

The total turnover on BSE amounted to Rs 4593 crore, lower than Rs 4680.27 crore on Tuesday, 30 November 2010.

Among the 30-member Sensex pack, 24 gained while the rest slipped.

Index heavyweight Reliance Industries (RIL) rose 0.33% to Rs 990.10 after gyrating in band of Rs 983.40-997.40 so far during the day. As per reports, the natural gas production from RIL’s East Coast block has dropped by about 15% to about 45-46 million standard cubic metres per day (mscmd) from 53-54 mscmd. The production from D-1 and D-3 gas fields in the KG-D6 block has dropped due to reservoir complexities.

India’s state-run oil & gas explorer Oil and Natural Gas Corporation jumped 3.23% after chairman R.S. Sharma told the media the company expects to launch its $3 billion follow-on public offer in March 2011 and the government will soon decide on the company’s stock split.

Indian Oil Corporation (IOC) jumped 10.96% to Rs 384.10 after the company’s chairman BM Bansal was quoted today as saying that the company is likely to sell its shares at Rs 450 each through a follow on public offer. The issue is likely to happen in the third or fourth week of January 2011.

Metal and mining shares saw an across the board surge after strong investor response to the MOIL issue. Tata Steel, Hindalco Industries, Hindustan Zinc, National Aluminium Company, Bhushan Steel, Sterlite Industries, JSW Steel and Steel Authority of India rose by between 1.76% to 9.43%.

But, Sesa Goa fell 2.81% after the company said it would stop mining operations at Thakurani mine in Orissa from Wednesday, 1 December 2010. The announcement was made after market hours on Tuesday, 30 November 2010.

Banking stocks gained on fresh buying on expectations of a strong credit offtake in a growing economy. India’s largest bank by net profit and branch network State Bank of India gained 3.71%. India’s second largest private sector bank by net profit HDFC Bank advanced 3.21%.

India’s largest private sector bank in terms of operating income ICICI Bank rose 2.04% on reports the bank has withdrawn a special housing loan scheme with immediate effect. The schemes have been under the Reserve Bank of India’s scrutiny on concerns about asset quality in the housing loan sector.

India’s top mortgage lender by total income Housing Development Finance Corporation rose 1.46% after the company said it would not extend a special housing loan scheme that was available until Tuesday, 30 November 2010.

Telecom pivotals saw divergent trend. India’s largest listed cellular services provider by sales Bharti Airtel lost 2.51%, on profit booking after surging 6.45% on Tuesday, 30 November 2010.

India’s second largest listed cellular services provider by sales Reliance Communications gained 3.94%, extending Tuesday’s, 30 November 2010 3.40% advance.

India’s top small car maker by sales Maruti Suzuki India slipped 0.77% to Rs 1412.80 on profit booking after striking day’s high of Rs 1447.60. Total sales rose 28.20% to 1.12 lakh vehicles in November 2010 over November 2009. The figures were announced during market hours today.

India’s largest truck maker by sales Tata Motors jumped 4.13%. The company’s total vehicle sales rose 1% to 54,622 units in November 2010 over November 2009. The figures were announced during market hours today.

India’s largest tractor and utility vehicles maker Mahindra & Mahindra (M&M) surged 4.53% after two-wheeler sales grew 125% in November to 15,854 units.

Two wheeler makers Hero Honda Motors and Bajaj Auto fell 2.28% and 0.35%, respectively.

India’s largest realty stock by sales DLF jumped 3.79%, extending Tuesday’s, (30 November 2010) 7% surge. Earlier, the stock had slumped 9.8% in the preceding five trading days to 29 November 2010 following the outbreak of a bank loans bribery scandal last week, mainly involving realty and infrastructure firms

Among other realty stocks, Unitech, Indiabulls Real Estate, HDIL and Omaxe rose by between 1.52% to 4.04%.

North India’s largest cement company by sales ACC rose 1.02% as the company’s cement dispatches rose 4.81% to 1.74 million tonnes in November 2010 over November 2009. The company announced its November 2010 dispatches figures during market hours today, 1 December 2010.

Software stocks saw mixed trend and underperformed the Sensex. India’s largest software company by sales TCS fell 0.07%. India’s second largest software company by sales Infosys rose 0.17%. India’s third largest software company by sales Wipro declined 1.34%

Consumer durables stocks rose on renewed buying. Videocon Industries, Titan Industries and Gitanjali Gems rose by between 2.47% to 5.76%.

Cals Refineries clocked the highest volume of 24.07 crore shares on BSE. Karuturi Global (1.37 crore shares), Birla Power Solutions (1.34 crore shares), FCS Software (1.16 crore shares) and Sanraa Media (1.07 crore shares) were the other volume toppers in that order.

State Bank of India clocked highest turnover of Rs 236.78 crore on BSE. Tata Motors (Rs 127.82 crore), LIC Housing Finance (Rs 125.24 crore), Gravita India (Rs 101.58 crore) and Jubilant Food Organosys (Rs 101.55 crore) were the other turnover toppers in that order.

The BSE Sensex has lost 820.98 points or 4.11% to 19,136.61 in four trading sessions from its close of 19957.59 on 22 November 2010.

The finance ministry has not suggested recalling of corporate loans under scanner in the financial bribery scam, the financial services secretary R. Gopalan said on Friday, 26 November 2010. The Sensex dived below the psychological 19,000 level in morning trade but soon regained that level. The Securities & Exchange Board of India (Sebi) is reportedly examining the possibility of insider trading in shares of at least nine companies. The Sebi has joined the Central Bureau of Investigation (CBI) to probe the possibility of insider trading in shares of these companies, named by the investigator as involved in the loan scandal, reports suggest.

The market breadth was extremely weak with stocks of a number of small and mid-cap shares falling sharply. Realty and construction shares slumped, extending recent steep losses. But, banking shares recovered from early lows with ICICI Bank and State Bank of India logging decent gains.

Intraday volatility was high. The market reversed direction soon after a firm start. Stocks tumbled in morning trade. The market recovered in choppy trade later as the Sensex and the Nifty came off two-month lows. The recovery gathered steam in early afternoon trade. The key benchmark indices once again slipped into the red after turning positive for a brief period in afternoon trade. The Sensex swung between gains and losses in mid-afternoon trade. The market weakened again in late trade.

NSE’s volatility index, India VIX, a gauge of traders’ perception of near-term risks in the market based on options prices, was up 4.39% at 22.58. The index had plunged 12.36% to 21.63 on Thursday, 25 November 2010. The index had risen 6.10% to 24.68 on Wednesday, 24 November 2010. The index had jumped 16.71% to 23.26 on Tuesday, 23 November 2010. India VIX is calculated based on the S&P CNX Nifty options prices. India VIX is a measure of the market’s expectation of volatility over the next 30 calendar days.

The Central Bureau of Investigation (CBI) has reportedly sent notices to 21 medium-to-large sized Indian companies regarding the ongoing probe into a financial bribery scandal. The cases are limited to individuals and unlikely to create a large fallout, a news agency report said citing an unnamed senior CBI official. The CBI is not currently considering widening its probe into bribery over loans to corporates, the report added.

Finance Minister Pranab Mukherjee on Thursday, 25 November 2010, asked all banks, financial institutions and insurance firms to look into their exposures to firms named by the Central Bureau of Investigation in a loans bribery scandal. A ministry statement quoted Pranab Mukherjee as calling on regulatory and other institutions to further improve safeguards.

Chiefs of some of the top rung public sector banks and financial institutions were arrested by the Central Bureau of Investigation (CBI) on Wednesday, 24 November 2010, for allegedly sanctioning loans in return for bribes. The CBI has arrested the Chief Executive Officer of LIC Housing Finance, Secretary (Investment), LIC based in Mumbai, a General Manager, Bank of India based in Mumbai, a director (Chartered Accountant) of Central Bank of India based in New Delhi, a DGM of Punjab National Bank base in New Delhi. The CBI also arrested Rajesh Sharma, chairman and managing director of Money Matters group, which is at the centre of the scandal.

The CBI said in a statement that it has busted a racket wherein a private financial services company, its CMD and other associates were allegedly bribing senior officials of public sector banks and financial institutions for facilitating large scale corporate loans. They were also gathering confidential business information from financial institutions, the CBI statement said.

Officers of top management and middle management of various public sector banks and financial institutions viz. Bank of India, Central Bank of India, Punjab National Bank, LIC and LIC Housing Finance were receiving illegal gratifications from the private financial services company who were acting as mediators and facilitators for corporate loans and other facilities from financial institutions, the CBI said. Searches were conducted at various locations in Mumbai, Delhi, Chennai, Jaipur, Kolkata and Jalandhar, which have resulted in seizure of incriminating documents, the CBI said in a statement.

“It is an insignificant amount … it is individual personal greed, it is not systematic failure,” R. Gopalan, secretary financial services, government of India, told a news channel late on Wednesday, 24 November 2010. Junior finance minister Namo Narain Meena on Thursday, 25 November 2010, said that the loans bribery scandal that has led to several arrests is not a widespread scam and will not hit markets or the banking sector.

Meanwhile, Life Insurance Corporation of India has reportedly sent to the finance ministry files relating to investments in close to 40 companies along with notings. The files were requisitioned by the government some days before the CBI arrested the secretary in charge of investment at the Corporation Naresh Kumar Chopra, a newspaper report said. The CBI, in its remand application, had alleged that Mr Chopra had received a bribe for passing on insider information with regard to LIC’s investment in a host of companies that include, Adani, JP Hydro, JSW Power, DB Realty, Pantaloon. The bureau has alleged that Mr Chopra received 16 lakh paid by Rajesh Sharma, CMD of Money Matters, through his associates.

Foreign institutional investors (FIIs) sold shares worth a net Rs 532.20 crore on Thursday, 25 November 2010, as against an inflow of Rs 1775.50 crore on Wednesday, 24 November 2010.

Year-end profit taking may continue to weigh on the the domestic bourses in the near term. Funds based in US and Europe follow calendar year as their accounting year. The market has lost ground soon after hitting a record closing high early this month.

The initial public offer of state-run MOIL, the largest manganese ore producer in India, was subscribed 34% by 16:00 IST on the first day of the issue today, 26 November 2010.

Bank and mining shares pulled European markets lower on Friday, 26 November 2010, as markets took in fresh reports of blasts heard in Korea and as sovereign debt issues continued weigh on investors. The key benchmark indices in Germany, France and UK were down 0.88% to 1.59%.

Investors continued to worry about the possibility of contagion to Portugal and Spain following Ireland’s decision to ask for aid from the European Union and the International Monetary Fund.

Adding to the sour mood were reports of artillery fire near the South Korean island of Yeonpyeong. Artillery blasts rang out near the South Korean island of Yeonpyeong Friday, according to reports, three days after a North Korean shellfire attack killed four there. North Korea’s official news agency reportedly said further escalation will lead to open war.

Asian stocks fell in choppy trade on Friday, 26 November 2010, amid tensions on the Korean Peninsula. The key benchmark indices in South Korea, Singapore, Taiwan, Japan, Hong Kong, China and Indonesia were down 0.45% to 1.61%.

Trading in US index futures indicate that the Dow could fall 74 points at the opening bell on Friday, 26 November 2010. The US financial markets are open for only half a day on Friday, 26 November 2010.

Closer home, the food price index rose 10.15% and the fuel price index climbed 10.57% in the year to 13 November 2010, government data released on Thursday showed. In the prior week, annual food and fuel inflation stood at 10.30% and 10.57%, respectively. The primary articles price index was up 13.38% in the latest week compared with an annual rise of 13.30% a week earlier.

The BSE 30-share Sensex was down 181.55 points or 0.94% to 19,136.61, its lowest closing since 9 September 2010. The Sensex rose 99.45 points at the day’s high of 19,417.61 in early trade. The index lost 363.34 points at the day’s low of 18,954.82 in morning trade.

The S&P CNX Nifty was down 47.80 points or 0.82% at 5,751.95, its lowest closing since 9 September 2010. The Nifty hit a low of 5,690.35 in morning trade.

The BSE Small-Cap index lost 3.06% and the BSE Small-Cap index declined 4.49%. Both these indices underperformed the Sensex.

The market breadth, indicating the health of the market, was weak. On BSE, 2552 shares declined while 499 shares rose. A total of 57 shares remained unchanged.

All the 13 sectoral indices on the BSE edged lower. The BSE Realty index (down 4.68%), the BSE Consumer Durables index (down 3.90%), and the BSE Metal index (down 2.54%), underperformed the Sensex.

The BSE IT index (down 0.02%), Bankex (down 0.03%), and the BSE Healthcare index (down 0.39%), outperformed the Sensex.

Among 30-member Sensex pack, 24 declined while the rest gained. Cipla (up 1.58%), and Tata Power Company (up 0.55%), edged higher from the Sensex pack.

Reliance Infrastructure (down 7.25%), Bhel (down 2.28%), and Reliance Communications (down 5.84%), edged lower from the Sensex pack.

Index heavyweight Reliance Industries (RIL) fell 1.69% to Rs 963.70, off day’s low of Rs 958.90 and high of Rs 990.50. RIL and NTPC may reportedly settle their five-year-old legal battle over a contract to supply natural gas from RIL’s field in the Krishna-Godavari basin to the state-owned power utility.

The RIL-NTPC dispute dates back to 2005 when NTPC dragged RIL to the Bombay High Court, complaining that RIL was not honouring a contract to sell 12 million standard cubic metres a day (mmscmd) of gas to its Kawas and Gandhar expansion projects in Gujarat for 17 years at $2.34 per unit. Shares in NTPC fell 0.25%.

Realty stocks slumped for the third straight day on concerns more of these firms could be named in the probe. The fresh sanctions of loans may take a hit after the outbreak of the scam involving sanctioning of loans in return for bribes. Sale of property is largely driven by financed funds.

India’s largest realty player by sales DLF lost 0.94%, extending three-day losses. Ackruti City (down 13.34%), HDIL (down 3.94%), Indiabulls Real Estate (down 12.05%), Orbit Corporation (down 13.21%), Unitech (down 4.60%), and DB Realty (down 10%), declined.

Frontline banking and financial stocks were mixed after a recent steep slide triggered by the outbreak of the loan scam. India’s largest bank by net profit and branch network State Bank of India rose 1.16% to Rs 2859, off sharply from day’s low of Rs 2795.10. The stock rose on bargain hunting after the stock corrected close to 7% in the preceding three trading sessions. India’s largest private sector bank by net profit ICICI Bank rose 0.51%.

But, India’s second largest private sector bank by net profit HDFC Bank shed 0.74%. India’s largest mortgage financier by total income HDFC fell 2.23%.

Bank of India (BoI) rose 3.02% to Rs 433, off the day’s low of Rs 388.35, after the state-run bank clarified it has a proper structure for sanctioning loans, which is duly observed and the asset quality continues to be good.

Metal stocks fell in a broad-based market sell-off. Sesa Goa (down 5.72%), Sterlite Industries (down 2.49%), National Aluminum Company (down 4.03%), Hindalco Industries (down 2.87%), and Tata Steel (down 0.92%), edged lower. But, Steel Authority of India rose 3.12%.

Jindal Steel and Power lost 2.01% on reports the environment ministry has told the company to provide a reason why it should not cancel a green nod for the firm’s 6 million tonnes per year Orissa plant.

Construction shares were hammered brutally for the third day in a row on funding worries after the loan scam was unearthed on Wednesday 24 November 2010. India’s largest dam builder by sales Jaiprakash Associates tumbled 8.09% to Rs 105.70 after media reports named the company in an alleged loan bribery scandal. It was the top loser from the Sensex pack. The company’s executive chairman Manoj Gaur in a TV interview said the company has neither taken any loan for realty business nor it intends to take any.

Hindustan Construction Company slumped 19.49% on reports the environment ministry has asked Lavasa Corporation to halt building a new town outside Pune. After market hours on Thursday, 25 November 2010, HCC and Lavasa clarified to the stock exchanges that Money Matters Financial Services is associated with the group on a fee based arrangement, where the latter acts as an agent for selling the group’s properties.

Nagarjuna Construction Company (down 3.07%), IVRCL Infrastructure (down 6.06%), Patel Engineering (down 1.59%), and Gammon India (down 5.01%), were among the other losers from the construction pack.

IRB Infrastructure Developers spurted 4.89% on bargain hunting after the stock corrected 17.49% in the preceding three sessions to Rs 203.55 on Thursday, 25 November 2010, from a recent high of Rs 246.70 on 22 November 2010.

India’s largest tractor maker by sales Mahindra & Mahindra dropped 3.23%. The company has agreed to acquire up to 5.5% stake in Tech Mahindra from BT over time through an inter-se transfer of shares. Shares of Tech Mahindra fell 1.36%.

India’s largest truck maker by sales Tata Motors lost 3.75%. The company reportedly plans to set up a second factory in Bangladesh, one of its main export destinations for commercial vehicles, in six months to cater to growing sales of small and light commercial vehicles. Separately, Tata Motors reportedly plans to launch compressed natural gas (CNG)-powered trucks in the medium and heavy segments for the domestic market within a year.

Software pivotals outperformed the Sensex on a weak rupee, which hit a 10-week low against the dollar. India’s largest software company by sales TCS rose 2.09% to Rs 1045 and was the top gainer from the Sensex pack. India’s second largest software company by sales Infosys fell 0.77%. India’s third largest software company by sales Wipro was down 0.46%. A weak rupee boosts revenue of IT firms in rupee terms as the sector derives a lion’s share of revenue from exports.

Select PSU shares rose on bargain hunting after a recent slide. ONGC (up 0.54%), Indian Oil Corporation (up 0.96%), Oriental Bank of Commerce (up 3.85%), and BPCL (up 1.45%), gained.

Shares of select stocks collapsed after reports the Securities & Exchange Board of India is examining the possibility of insider trading in shares of these companies. Central Bank of India (down 10.51%), Money Matters Financial Services (down 10%), LIC Housing Finance (down 11.49%) and Pantaloon Retail (down 2.25%) declined.

LIC Housing Finance clocked highest turnover of Rs 370.78 crore on BSE. Core Projects (Rs 298.74 crore), State Bank of India (Rs 243.62 crore), Power Grid Corporation of India (Rs 211.14 crore) and Tata Steel (Rs 124.16 crore) were the other turnover toppers in that order.

Cals Refineries clocked highest volume of 8.09 crore shares on BSE. Karuturi Global (2.55 crore shares), Power Grid Corporation of India (2.21 crore shares), Hindustan Construction (2.05 crore shares) and IFCI (1.79 crore shares) were the other volume toppers in that order.

The market opened on a firm note as most Asian stocks rose after Ireland on Sunday, 21 November 2010, formally applied for aid from the European Union and the International Monetary fund. A bout of volatility was witnessed as the key benchmark indices later pared gains. The market surged in mid-morning trade. Firmness prevailed in early afternoon trade. The market struck a fresh intraday high in afternoon trade. Buying intensified in the mid-afternoon trade.

In the near-term, year-end profit taking may cap the upside on the domestic bourses. A number of stocks have clocked decent to strong gains this year. Funds based in US and Europe follow calendar year as their accounting year. The market had lost ground soon after hitting a record closing high early this month. The Sensex and the Nifty had settled at two-month closing lows on Friday, 19 November 2010.

European shares rose on Monday after Ireland agreed to a rescue package from European partners and the International Monetary Fund. The key benchmark indices in UK, France and Germany were up by 0.29% to 0.52%. Ireland’s request, which eased concerns over regional and global economies prompted risk-sensitive stock investors to increase their share holdings.

The bailout deal between debt-burdened Dublin and the European Union took shape on Sunday, 21 November 2010, as EU finance ministers backed Ireland’s filing for three-year loans totaling roughly EUR80 billion.

Details of the size and conditions of any bailout package remained unclear. The program will address the fiscal challenges of the Irish economy and also include a fund for potential future capital needs of the banking sector, euro-zone finance ministers said in a statement.

Asian stocks rose on Monday, 22 November 2010, on news over the weekend that Ireland has formally applied for aid from the European Union and the International Monetary fund. The key benchmark indices in Japan, South Korea, Indonesia and Taiwan were up by between 0.17% to 0.93%. Hong Kong stocks fell, with real-estate stocks down sharply in the wake of measures Friday, 19 November 2010, to cool prices in the sector. The Hang Seng index was down 0.35%. Singapore’s Straits Times fell 0.20%.

In China, the Shanghai Composite index was down 0.15%. China on Friday, 19 November 2010, lifted its reserve requirement ratio for banks by 0.5%, aimed at reining in credit growth and rising inflation. However, the central bank’s latest move lowers the chance of an interest rate hike this month.

Flows into equity and bond funds “hit a wall in mid-November 2010,” said fund-tracker EPFR on Friday, 19 November 2010, weighed by investor worries about indebtedness in the euro zone and weaker demand from China amid rising inflation. EPFR said globally tracked equity funds were hit with redemptions totaling $5.6 billion just a week after collectively posting their biggest inflow in more than 22 months. Only three major equity fund groups – Asia ex-Japan, Global and EMEA Equity Funds – posted inflows during the week ending 17 November 2010. But all emerging market equity funds combined posted inflows for the week, and extended year-to-date flows to $81.9 billion, “within a whisker of last year’s $83.3 billion inflow record,” wrote EPFR.

Trading in US index futures indicated that the Dow could rise 33 points at the opening bell on Monday, 22 November 2010.

While global liquidity remains ample, a section of the market is worried that a strong equity issuance pipeline over the next six months will soak liquidity from the secondary equity market. Indian companies are estimated to raise about Rs 80000 crore from equity and debt issue over the next three to six months. Steel Authority of India and Indian Oil Corporation (IOC) are some of the state-run firms that are planning large share sales in coming months. The Indian Government is selling 10% of its 78.92% stake in IOC, while the company will issue new equity of 10% of existing paid up capital. The size of the follow-on public offer of IOC is pegged at a massive about Rs 19000 crore.

Other upcoming state offers include Manganese Ore India’s IPO to raise up to $270 million, Hindustan Copper’s $1.6 billion share sale, and Shipping Corp of India’s $320 milion share sale.

According to one report, fund raising by way of initial public offerings (IPOs), follow-on public offerings (FPOs) and qualified institutional placements (QIPs) have totalled a record Rs 87733 crore in the year till date, beating the previous high of Rs 65344 crore in calendar year 2007.

Meanwhile, the Supreme Court on Monday, 22 November 2010, will hear petition filed by Centre for Public Interest Litigation, asking the top court to monitor 2G probe. Supreme Court will hear Prime Minister Manmohan Singh’s affidavit on 2G tomorrow, 23 November 2010. The PM told the Supreme Court on Saturday, 20 November 2010, he had done nothing wrong and had followed correct procedures. In a rare move, the Supreme Court last week reprimanded Singh for failing to probe ex-telecoms minister Andimuthu Raja over allegations he had sold licences too cheaply. The court demanded Singh himself explain what had happened, tarnishing his squeaky-clean image.

Speaking at the HT Leadership Summit in New Delhi on Saturday, 20 November 2010, Singh said, “There should be no doubt in anybody’s mind that if any wrong thing has been done by anybody, he or she will be brought to book. But for all these to happen, in a democracy we have to allow Parliament to function… We are ready to discuss all issues. We are not afraid of discussions,” he said on the stalemate over the spectrum issue.

The BSE 30-share Sensex surged 372.15 points or 1.9% to settle at 19,957.59. The Sensex jumped 403.58 points at the day’s high of 19,989.02 in mid-afternoon trade. The index rose 55.98 points at the day’s low of 19,641.42 in morning trade.

The 50-unit S&P CNX Nifty rose 119.70 points or 2.03% at 6,010. The Nifty hit a high of 6,020.25 in mid-afternoon trade.

The BSE Mid-Cap index was up 1.28%. The BSE Small-Cap index rose 1.46%. Both these indices underperformed the Sensex.

The market breadth, indicating the health of the market, was strong. On BSE, 1908 shares rose while 1067 shares fell. A total of 110 shares remained unchanged.

BSE clocked a turnover Rs 3819 crore, lower than Rs 4701.05 crore on Friday, 19 November 2010.

All the sectoral indices on BSE were in positive zone. The banking sector index Bankex (up 2.64%), Consumer Durables index (up 2.59%), IT index (up 2.50%), Realty index (up 2.01%), outperformed the Sensex.

Auto index (up 1.77%), FMCG index (up 1.76%), Oil & Gas index (up 1.52%), Metal index (up 1.24%), PSU index (up 1.17%), Power index (up 0.93%), Healthcare index (up 0.55%) and Capital Goods index (up 0.30%), underperformed the Sensex.

From 30-share Sensex pack, 27 gained while rest of them declined.

Wipro (up 4.16%), Jaiprakash Associates (up 4.02%), DLF (up 3.43%) and Tata Motors (up 3.18%) were the leading Sensex gainers.

Index heavyweight Reliance Industries (RIL) rose 1.53% to Rs 1012.10. RIL after market hours on 19 November 2010 said its crude distillation unit number 1 and coker unit at the Jamnagar Refinery complex, which were under planned shutdown for carrying out maintenance activities from last week of October, 2010, have safely restarted on 17 November 2010 and are operating satisfactorily.

NTPC (down 0.62%), Larsen & Toubro (down 0.22%) and Sterlite Industries (down 0.11%), were the leading Sensex losers.

Investors also took fresh positions in banking shares after recent declines. IndusInd Bank, Kotak Mahindra Bank, Bank of India, Axis Bank, Oriental Bank of Commerce, Federal Bank, HDFC Bank, Bank of Baroda, Canara Bank, Indian Overseas, Punjab National Bank, Yes Bank, Union Bank of India and IDBI Bank rose by 0.64% to 5.40%.

India’s largest private sector bank by market capitalisation ICICI Bank rose 2.69%. India’s largest commercial bank by branch network State Bank of India rose 1.56%.

The BSE banking sector index — the Bankex had declined 5.54% in three consecutive sessions to settle at 13,705.09 on Friday, 19 November 2010 from a recent high of 14,509.60 on 15 November 2010.

Consumer durables stocks rose. Rajesh Exports, Titan Industries, VIP Industries, Gitanjali Gems, Whirlpool of India, Blue Star, Videocon Industries and Bajaj Electricals rose by 0.31% to 4.20%.

IT stocks, too, edged higher. Wipro, HCL Technologies, Infosys, TCS, Rolta India, Mphasis, Oracle Financial Services Software and Tech Mahindra rose by 0.01% to 4.16%.

India’s largest truck maker by sales Tata Motors rose 3.18% on reports the company will start selling its small car Nano in six more states across the country from 22 November 2010. Among other auto shares, Bajaj Auto, Mahindra & Mahindra, Maruti Suzuki India, Ashok Leyland and Hero Honda Motors rose by 0.42% to 2.07%.

Realty shares bounced back after recent sell-off. Indiabulls Real Estate, DLF, Sobha Developers, Unitech, Ackruti City, Anant Raj Industries, Orbit Corporation, Peninsula Land, and Sunteck Realty rose by 0.18% to 3.46%.

The BSE Realty index had declined 16.75% in seven sessions to 3173.57 on Friday, 19 November 2010, from a recent high of 3812.36 on 9 November 2010.

Among FMCG sector gainers, Ruchi Soya Industries, ITC, Mcleod Russel (India), Nestle India, Tata Global Beverages, United Spirits and Hindustan Unilever rose by 0.08% to 6.03%.

Among Oil & Gas stocks, Aban Offshore, Cairn India, ONGC, Essar Oil, BPCL, HPCL and Gail India rose by 0.42% to 2.67%.

Metal shares also rose. Tata Steel, Jindal Steel & Power, JSW Steel, Welspun Corp, Hindalco Industries, Steel Authority of India, NMDC, Sesa Goa, National Aluminium Company, Hindustan Zinc and Jindal Saw rose by 0.18% to 2.95%.

From the power sector, GVK Power & Infrastructure, Adani Power, Tata Power, GMR Infrastructure, Reliance Power, Lanco Infratech, ABB, JSW Energy, Neyveli Lignite Corporation, Suzlon Energy, Siemens, Crompton Greaves, Bharat Heavy Electricals, NHPC, Torrent Power, Power Grid Corporation of India and Reliance Infrastructure rose by 0.19% to 3%.

Pharma stocks rose. Orchid Chemicals, Ranbaxy Laboratories, Piramal Healthcare, Biocon, Cipla, Glaxosmithkl Pharmaceuticals, Sun Pharmaceuticals Industries, Dr Reddy’s Laboratories, Glenmark Pharmaceuticals, and Jubilant Organosys rose by 0.18% to 3.53%.

From the capital goods pack, Reliance Industrial Infrastructure, Havells India, AIA Engineering, Areva T&D, ABB, Lakshmi Machine Works, Praj Industries, Thermax, Suzlon Energy, Siemens, Crompton Greaves, Bharat Electricals, Jyoti Structures, BHEL and Gammon India rose by 0.11% to 7.41%.

State Bank of India clocked a highest turnover of Rs 177.28 crore on BSE. Gravita India (Rs 164.42 crore), Coal India (Rs 109.09 crore), Tata Steel (Rs 71.42 crore) and Educomp Solutions (Rs 66.18 crore), were other turnover toppers in that order.

Resurgere Mines & Minerals India reported a highest volume of 1.73 crore shares on BSE. Cals Refineries (1.24 crore shares), SEL Manufacturing Company (82.76 lakh shares), Shree Ashtavinayak Cine Vision (82.14 lakhs shares) and Alok Industries (69.10 lakh shares), were other volume toppers in that order.

The market surged to hit day’s high after a weak start as most Asian stocks reversed initial losses. It trimmed gains after extending initial gains to hit fresh intraday highs in morning trade. It pared gains in mid-morning trade. It reversed initial gains to hit fresh intraday lows in early afternoon trade. It trimmed losses in afternoon trade. It recovered sharply to regain positive zone in mid-afternoon trade. It extended gains in late trade.

European shares hit a two-year high on Tuesday, with several companies including Vodafone and Barclays gaining after upbeat profit statements, and with the macroeconomic backdrop boosting sentiment. The key benchmark indices in France, Germany and UK rose by between 0.64% to 0.77%.

Most Asian stocks reversed initial losses. The key benchmark indices in South Korea, Singapore, Indonesia and Taiwan rose by between 0.18% to 1.03%. But, the key benchmark indices in China, Hong Kong and Japan fell by between 0.39% to 1.02%.

Gains in global stocks and commodities were extended last week after the U.S. Federal Reserve on Wednesday announced it would sink $600 billion into buying Treasurys over the next eight months to stimulate the sluggish economy by lowering long-term interest rates.

Southeast Asian economies need to shift towards less expansionary fiscal and monetary policies as they recover from the global economic downturn, the Organisation for Economic Cooperation and Development (OECD) said in a report published on Tuesday. Southeast Asian economies are expected to achieve average growth of 6.0% per year in 2011-2015, roughly in line with the precrisis level of 6.1% due to strong domestic demand, the report said. It projected 7.3% growth in the region for 2010.The report, which is the first of its kind issued by the OECD, analyses the long-term economic outlook and the policy challenges for the Southeast Asian region.

Growth rates in the world’s developed economies are set to diverge, the OECD said on Monday, with the recovery losing steam in France, Canada, Italy and Britain, but picking up pace in Germany, Japan and the United States.

US index futures reversed initial losses losses. Trading in US index futures indicated that the Dow could gain 18 points at the opening bell on Tuesday, 9 November 2010.

Back home, U.S. President Barack Obama endorsed on Monday India’s long-held demand for a permanent seat on the U.N. Security Council, a reflection of the Asian country’s growing global weight and its challenge to rival China. In his three-day trip — the longest stay in any foreign country by Obama — the U.S. leader announced $10 billion in business deals, Obama will also visit Indonesia, South Korea and Japan on the tour that will see Washington push to prevent countries unilaterally devaluing currencies to protect their exports, a top theme at the G20 summit in Seoul this week. Obama has also announced the United States would relax export controls over sensitive technology, another demand of India’s.

Meanwhile, the $ 1.7 billion follow-on public offer of state-run Power Grid Corporation opened for bidding today, 9 November 2010. The issue was fully subscribed by 16:00 IST on the first day of the issue, data on NSE showed. The issue closes on Thursday 11 November 2010 for the qualified institutional bidders and on Friday 12 November 2010 for all other bidders. Follow-on offer price band is fixed between Rs 85 to Rs 90 per Share, and 5% discount will be available to Retail investors and eligible employees at the issue price on allotment.

While global liquidity remains ample, a section of the market is worried that a strong equity issuance pipeline over the next six months will soak liquidity from the secondary equity markets. Indian companies are estimated to raise about Rs 80000 crore from equity and debt issue over the next three to six months. After Power Grid Corp, Steel Authority of India and Indian Oil Corp are some of the other companies that are planning large share sales in coming months.

Meanwhile, share sales by the Indian government in state run firms Manganese Ore India (MOIL) and Shipping Corporation of India are likely to hit the market by end-November, while an offer by Hindustan Copper is likely in December, Disinvestment Secretary Sumit Bose said

On the corporate front, the Q2 September 2010 corporate results have been encouraging. The combined net profit of a total of 2093 firms surged 36.7% to Rs 84386 crore on 17.8% growth in sales to Rs 621280 crore in Q2 September 2010 over Q2 September 2009.

In macro news, the food inflation eased for a third week in late October 2010, the latest government data showed. The food price index in the year to 23 October rose 12.85% compared with 13.75% rise in the previous week, as the prices of vegetables and pulses fell. Fuel inflation for the same period was at 10.67%, slowing from 11.25% the prior week. The primary articles price index was up 15.43%, compared with an annual rise of 16.62% a week earlier. Food makes up a little over 14% of the wholesale price index (WPI) while fuel contributes about 15%.

India’s services sector expanded last month at a faster rate than in September 2010, bringing an end to a 3-month decline in the key business activity index, a survey showed on Wednesday, 3 November 2010. The manufacturing sector expanded in October 2010 at a much faster pace than in September 2010, supported by strong output and a sharp rise in new business, a purchasing managers’ index (PMI) showed on Monday, 1 November 2010.

The Reserve Bank of India (RBI) at its second quarterly monetary policy review on Tuesday, 2 November 2010, hiked its lending and borrowing rates by a quarter point each, as expected, to tackle inflationary pressures. The central bank signaled a pause in its policy tightening drive that began in October 2009. Based purely on current growth and inflation trends, the Reserve Bank of India (RBI) believes that the likelihood of further rate actions in the immediate future is relatively low, RBI governor D Subbarao said in a monetary policy statement. “However, in an uncertain world, we need to be prepared to respond appropriately to shocks that may emanate from either the global or domestic environment,” he added.

The RBI said it will continue to closely monitor both global and domestic macroeconomic conditions. “We will take action as warranted with a view to mitigating any potentially disruptive effects of lumpy and volatile capital flows and sharp movements in domestic liquidity conditions, consistent with the broad objectives of price and output stability”, the policy statement said.

So far in 2010, foreign funds have pumped more than $28 billion into Indian primary and secondary equities.

The BSE 30-share Sensex was up 80.10 points or 0.38%, to 20,932.48. At the day’s high of 20984.08 hit in morning trade, index jumped 131.70 points. The index fell 89.57 points at the day’s low of 20762.81 in early afternoon trade.

The S&P CNX Nifty was up 28.35 points or 0.45% to 6,301.55.

The BSE Mid-Cap index rose 0.38% and matched with Sensex’s gains. The BSE Small-Cap index rose 0.85% and outperformed the Sensex.

The BSE clocked turnover of Rs 5404 crore higher than Rs 5161.15 crore on Monday, 8 November 2010.

The market breadth, indicating the health of the market was strong. On BSE, 1749 shares rose while 1239 shares fell. A total of 100 shares remained unchanged.

From the 30 share Sensex pack 20 rose and rest fell.

Index heavyweight Reliance Industries (RIL) fell 0.41% to Rs 1107.45. The stock hit a high of Rs 1120.50 and low of Rs 1097.75. RIL’s net profit rose 27.80% to Rs 4923.00 crore on 22.69% rise in net sales to Rs 57479.00 crore in Q2 September 2010 over Q2 September 2009. Its gross refining margin (GRM) for quarter was at $7.9 per barrel as against $6 per barrel in the corresponding period of the previous year.

India’s largest bank by branch network and net profit State Bank of India slumped 4.4% after lower than expected Q2 result. The stock was the top loser from the Sensex pack. On a consolidated basis, State Bank of India’s net profit fell 22.52% to Rs Rs 2363.95 crore on 14.57% increase in total income to Rs Rs 37925.44 crore in Q2 September 2010 over Q2 September 2009. State Bank of Indore merged with State Bank of India with effect from 26 August 2010. Hence, the results for the quarter ended 30 September 2010 is not comparable with the corresponding period of the previous year. The bank announced Q2 result after market hours on Monday, 8 November 2010.

But, shares of leading private banks rose. India’s second largest private sector bank by net profit HDFC Bank rose 2.42%.

India’s largest private sector bank by net profit ICICI Bank rose 1.11%. The stock on 5 November 2010 scaled a 52-week high of Rs 1,277.

Capital goods stocks fell on profit taking. BHEL, ABB, Thermax, Larsen & Toubro and BEML fell by between 0.09% to 1.7%.

Some consumer durables stocks rose on renewed buying. Videocon Industries, Titan Industries, Lloyd Electric and Gitanjali Gems rose by between 0.14% to 5.72%.

Software stocks also rose on renewed buying. India’s third largest software services exporter by sales Wipro rose 0.05%. India’s largest software services exporter by sales TCS rose 2.25%. India’s second largest software services exporter by sales Infosys rose 0.94%.

India’s largest realty player by sales DLF rose 1.23% ahead of its Q2 result on Wednesday, 10 November 2010. HDIL, Indiabulls Real Estate and Unitech rose by between 0.63% to 6.08%.

FMCG stocks rose on bargain hunting. ITC, Dabur India, Britannia Industries, Hindustan Unilever and Nestle India rose by between 1.34% to 8.4%.

Auto stocks were mixed. India’s largest tractor maker by sales Mahindra & Mahindra rose 0.6%, reversing initial losses. The stock hit record high of Rs 797 on Monday, 8 November 2010. The company’s auto sales rose 34% to 34,495 units in October 2010 as against 25,670 units during October 2009.

Bajaj Auto rose 0.68% reversing initial losses. The company reported 32% surge in total sales to a 3.7 lakh units in October 2010 over October 2009. The company clocked record motorcycle and commercial vehicle sales in the recently concluded month.

India’s top small car maker by sales Maruti Suzuki India fell 1.2%. The company’s total sales rose 39.2% to 1.18 lakh vehicles in October 2010 over October 2009.

India’s largest bike maker by sales Hero Honda Motors fell 0.19% reversing initial gains. The company reported its highest ever monthly sales at 5,05,553 units in October 2010, registering a jump of 42.75% over the same month last year

India’s biggest commercial India’s biggest commercial vehicles maker by sales Tata Motors rose 0.2% ahead of its Q2 result today. The stock hit record high of Rs 1294.70 today. Total sales rose 21.26% to 64,757 units during October 2010 compared to 53,404 units in the same month last year. The company unveils its Q2 September 2010 results on 9 November 2010.

Metal stocks rose on expectations of strong domestic demand. Copper maker Hindalco Industries rose 0.56%. The company announced after market hours today that its net profit rose 26.08% to Rs 433.81 crore in Q2 September 2010 over Q2 September 2009. The stock hit a record high of Rs 239.35 on Monday. Hindalco Industries said 8,000 metric tons of cathode production may be lost at its copper plant in Gujarat because a cooling tower broke down.

Sesa Goa, Jindal Steel & Power, Steel Authority of India, Tata Steel and Sterlite Industries and JSW Steel rose by between 0.37% to 2.38%.

But, Hindustan Zinc fell 1.93% after the company cut zinc prices by Rs 2200 per tonne.

Shares of tea makers rose on anticipations of higher tea prices due to a supply disruption. Assam Company India (up 15.05%), Harrisons Malayalam (up 3.18%), Asian Tea & Exports (up 1.84%) and Mcleod Russel India (up 0.78%), rose.

FCS Software clocked the highest volume of 2.59 crore shares on BSE. Birla Power Solutions (1.55 crore shares), Cals Refineries (1.5 crore shares), Assam Company (1.47 crore shares) and Alok Industries (1.19 crore shares) were the other volume toppers in that order.

State Bank of India clocked the highest turnover of Rs 272.35 crore on BSE. Coal India (Rs 204.33 crore), Jet Airways (Rs 141.05 crore), Neha International (Rs 139.33 crore) and Subex (Rs 97.39 crore) were the other turnover toppers in that order.

The market breadth which was strong for most part of the day, turned negative in late trade. IT stocks declined in volatile trade, tracking weakness in tech stocks in Asia triggered by Apple’s weaker-than-expected iPad sales. Banking stocks fell amid high intraday volatility. Index heavyweight Reliance Industries (RIL) lost close to 1%

Stocks were volatile. The market reversed initial strong gains. The market came off the highs after an intraday rebound in morning trade. Volatility continued later. The market surged near the day’s high in afternoon trade. A sudden sell-off was witnessed in mid-afternoon trade that followed a rally in afternoon trade. The market extended losses in choppy late trade.

NSE’s volatility index, India VIX, a gauge of traders’ perception of near-term risks in the market based on options prices, was up 3.94% at 23.23. The index had lost 1.32% to 22.35 on Monday, 18 October 2010. The index had jumped 9.95% to 22.65 on Friday, 15 October 2010. The index had risen 2.9% at 20.60 on Thursday, 14 October 2010. India VIX is calculated based on the S&P CNX Nifty options prices. India VIX is a measure of the market’s expectation of volatility over the next 30 calendar days.

Market men are worried that a strong equity issuance pipeline over the next six months will soak liquidity from the secondary equity markets. Indian companies are estimated to raise about Rs 80000 crore from equity and debt issue over the next three to six months. This includes a large initial public offer (IPO) from Coal India, which is currently open for bidding. In fact, the proposed fund raising exercise would be still higher if Indian Oil Corporation (IOC) hits the market with a follow-on public offer.

Divestment secretary Sumit Bose today, 19 October 2010, said the government will start the process for appointing bankers for follow-on public offer of refiner Indian Oil Corporation (IOC) within a few weeks. As per media reports, IOC’s follow-on public offer could total as much as Rs 19000 crore. Bose said the government is targeting shares sales for IOC and state-run explorer Oil and Natural Gas Corp in the March 2011 quarter.

The initial public offer of state-run Coal India was subscribed 1.57 times by 16:00 IST on day two of the issue today, 19 October 2010. The government plans to raise about Rs 15,000 crore from divestment of 10% stake in Coal India.

Investors are keenly watching Q2 September 2010. The initial batch of Q2 September 2010 results has been strong. Tier-1 IT firms are seen reporting strong earnings growth in Q2 September 2010 as high volumes will boost operating margins. However, the IT sector faces headwind of a firm rupee in Q3 December 2010. Higher volumes and price hike will aid earnings growth of most auto firms in Q2 September 2010 though analysts will closely eye operating profit margins and outlook on margins in the face of rising metal prices

Banks are seen reporting decent-to-strong earnings growth on the back of pick-up in credit offtake. Manufacturers of base metals are also seen reporting strong Q2 results on the back of higher metal prices. Increase in product prices will offset higher input costs for consumer staples firms in Q2 September 2010. But, cement firms will report dismal results due to a sharp fall in cement prices during the monsoon season.

In overseas news, Brazil raised the so-called IOF financial transactions tax on local bond purchases by foreigners for the second time this month, to 6% from 4%. The latest measure to rein in capital inflows is with an intention to curb the currency’s rally. It may be recalled that on 4 October 2010, Brazil had already doubled the tax from 2%.

European shares were trading mixed on Tuesday, 19 October 2010, with financials gaining ahead of results from Goldman Sachs. The key benchmark indices in France and UK were down 0.09% and 0.04%. But, Germany’s DAX rose 0.13%.

Most Asian stocks rose on Tuesday with banking stocks in Sydney and Tokyo rising after a strong earnings report from Citigroup, but tech shares were struggling in Korea and Taiwan on Apple’s weaker-than-expected iPad sales. The key benchmark indices in Japan, Singapore, China, Indonesia and Hong Kong were up by between 0.35% to 1.58%. But, the key benchmark indices in South Korea and Taiwan were down 0.97% and 0.18% respectively.

Chinese airline and nonferrous-metal stocks resumed their advance amid yuan-appreciation hopes and strong liquidity, after the Shanghai Composite snapped a seven-session winning streak in the previous session.

Data on China’s third-quarter gross domestic product and consumer-level price inflation is due on Thursday, 21 October 2010.

The People’s Bank of China lifted deposit and lending rates by a quarter point on Tuesday, according to the official Xinhua news agency. The surprise policy move brought the one-year yuan lending rate to 5.56% from 5.31% and the one-year deposit rate to 2.5% from 2.25%. The announcement was the first policy tightening since December 2007.

US stocks closed higher Monday as investors were encouraged by earnings from Citigroup and a measure of home-builder confidence that topped expectations. The Dow Jones Industrial Average rose 80.91 points, or 0.73%, to 11143.69, its highest close since 3 May 2010. The Nasdaq Composite added 11.89, or 0.48% to 2480.66, while the Standard & Poor’s 500-stock index advanced 8.52, or 0.72%, to 1184.71.

The National Association of Home Builders (NAHB) said its housing-market index rose three points to 16 in October 2010, the first improvement in the index in five months. The index measures builder confidence for sales prospects of new, single-family homes. The NAHB report boosted expectations for data on housing starts and building permits due later in the global day today, 19 October 2010.

Trading in US index futures indicated that the Dow could rise 8 points at the opening bell on Tuesday, 19 October 2010. US index futures were off initial lows.

Back home, as per a survey by an industry body, the business confidence of India Inc. for the October-December 2010 quarter declined on concerns such as inflation and high interest rates. The Confederation of Indian Industry (CII) 74th Business Outlook Survey showed the industry lobby’s business confidence index for October-December 2010 fell by 1.4 points to 66.2 as compared to an increase of 1.5 points during April-September 2010. The index reflects the expectation of Indian industry about the performance of companies, sectors and the economy. The survey found inflationary conditions, slackening consumer demand, cost and availability of labour and high interest rates as the top concerns.

Coming back to stocks, foreign funds have made heavy purchases of Indian equities this year. Net equity inflow in 2010 now stands at a record $23.69 billion, above last year’s $17.45 billion, as per data from the Securities & Exchange Board of India (Sebi). The Sebi data includes FII inflow through primary and secondary market route.

A sizable chuck of FII inflow this year is from India-focused exchange traded funds as well as long-only funds.

Bond yields edge lower in choppy trade. The yield on the benchmark 10-year bond was hovering at 8.08%, compared with Monday’s (18 October 2010) close of 8.09%. The yield on most traded 8.13% 2,022 bond was hovering at 8.10%, lower than Monday’s (18 October 2010) close 8.12%.

Higher inflation in September 2010 has raised the chances of a rate hike at the central bank’s next policy review on 2 November 2010. The wholesale-price index rose 8.62% in September 2010 from a year earlier, higher than the annual rise of 8.5% in August 2010, government data showed on Friday, 15 October 2010. The annual reading for July 2010 was upwardly revised to 10.31%. The Reserve Bank of India (RBI) next reviews monetary policy on 2 November 2010.

A separate data showed the food inflation rose marginally to 16.37% for the week ended 2 October 2010, on the back of higher prices of cereals, fruits, select vegetables and milk. Food inflation was at 16.24% for the week ended 25 September 2010.

Customs, Central Excise and Service Tax revenue collections at all India level rose 44.4% to Rs 150686 crore during April-September 2010 as compared to corresponding period in previous year, data released on 13 October 2010 showed.

Industrial production rose at a much slower-than-expected 5.6% in August 2010 from a year earlier, sharply lower than the previous month’s revised 15.2% growth, data showed on Tuesday, 12 October 2010. Manufacturing output rose an annual 5.9% in August 2010, lower than a 10.6% rise in August 2009. Industrial production growth for July 2010 was revised upwards to 15.2% from 13.8% earlier.

The Reserve Bank of India (RBI) governor D Subbarao on Friday, 15 October 2010, said the RBI was watching the exchange rate situation and will intervene in the forex market if inflows are lumpy and volatile. India must manage capital inflows so that it can fund its current account deficit while at the same time not harming exports, Deputy Governor Subir Gokarn had said on Thursday 14 October 2010. The rupee hit a 25-1/2-month high above 44 per dollar on Friday, 15 October 2010.

“The Coal India IPO may add pressure on liquidity at least temporarily, so it is something that we will look at and if the circumstances warrant, we will think about responding,” Gokarn said late last week.

The BSE 30-share Sensex was down 185.76 points or 0.92% to 19,983.13. The Sensex lost 244.93 points at the day’s low of 19,923.96 in late trade. The index gained 163.13 points at the day’s high of 20,332.02 in early trade.

The S&P CNX Nifty was down 48.65 points or 0.80% to 6,027.30. The Nifty hit a low of 6,008.15 in late trade.

The market breadth, indicating the health of the market, turned negative in late trade. The breadth was strong for most part of the day. On BSE, 1535 shares declined while 1497 shares advanced. A total of 85 shares remained unchanged.

The BSE Mid-Cap index rose 0.24% to 8,291.68 and the BSE Small-Cap index gained 0.24% to 10,638.96. Both these indices outperformed the Sensex

Most sectoral indices on BSE edged lower. The BSE IT index (down 2.22%), the BSE Realty index (down 1.75%), and the BSE Teck index (down 1.73%), underperformed the Sensex. The BSE HealthCare (up 1.06%), the BSE Auto index (up 0.28%), and the BSE FMCG index (up 0.06%), outperformed the Sensex.

The total turnover on BSE amounted to Rs 5257 crore, higher than Monday’s Rs 4,578.92 crore.

Among the 30-share Sensex pack, 27 declined while only 3 of them managed gains. DLF (down 2.66%), NTPC (down 1.69%), and Reliance Infrastructure (down 1.36%), edged lower from the Sensex pack.

Cipla (up 1.58%), and ACC (up 0.70%), edged higher from the Sensex pack.

IT stocks declined in volatile trade tracking weakness in tech stocks in Asia triggered by Apple’s weaker-than-expected iPad sales. India’s second largest IT exporter by sales Infosys dropped 3.09% to Rs 3011 after oscillating in a wide band of Rs 3007-Rs 3110 during the day. It was the top loser from the Sensex pack.

Infosys before market hours on Friday, 15 October 2010, reported a 16.7% rise in consolidated net profit as per International Financial Reporting Standards (IFRS) to Rs 1737 crore on 12.1% growth in revenue to Rs 6947 crore in Q2 September 2010 over Q1 June 2010. The core operating profit margin (OPM) surged to 30.2% in Q2 September 2010 from 28.31% in Q1 June 2010.

Infosys also raised its earnings as well revenue forecast for the year ending March 2011 in both dollar and rupee terms. But, the company’s top management cautioned about the global economic environment.

India’s largest IT exporter by sales TCS lost 1.47% to Rs 965, off day’s high of Rs 987. The company announces its Q2 September 2010 results on 21 October 2010.

India’s third largest software services exporter by sales Wipro slipped 1.19% to Rs 462, retreating from day’s high of Rs 475.80. The company announces its Q2 September 2010 results on 22 October 2010.

Index heavyweight Reliance Industries (RIL) slipped 0.82% to Rs 1040.25, after striking day’s high of Rs 1068. RIL has reportedly indicated that it may actively bid for oil and gas exploration blocks, including nine new areas, being auctioned by the Government. Out of 34 blocks being offered under NELP-IX, 19 blocks are new areas — seven are in deep sea, two in shallow waters and ten onland blocks. The rest 15 (one in deep water, five in shallow water and nine onland blocks) are recycled blocks.

Indian Oil Corporation (IOC) was down 0.49% while ONGC slipped 1.65%. The government will start the process for appointing bankers for a share sale in state-run refiner IOC within a few weeks, divestment secretary Sumit Bose said on Tuesday. The government is targeting shares sales for IOC and state-run explorer Oil and Natural Gas Corporation (ONGC) in the coming March quarter, he said.

Banking stocks were not able to sustain an intraday recovery. India’s largest private sector bank by net profit ICICI Bank fell 0.09% to Rs 1115 after moving in a band of Rs 1110.20-Rs 1150.95

India’s second largest private sector bank by net profit HDFC Bank fell 1.59% after striking day’s high of Rs 2424. The bank’s net profit rose 32.7% to Rs 912.10 crore on 14.37% growth in total income to Rs 5770.70 crore in Q2 September 2010 over Q2 September 2009. The result was announced after market hours today.

India’s largest bank by net profit and branch network State Bank of India declined 1.49% to Rs 3120, after hitting a day’s high of Rs 3203.

ING Vysya Bank jumped 8.31% after net profit surged 40.75% to Rs 75.26 crore on 20.5% rise in total income to Rs 832.05 crore in Q2 September 2010 over Q2 September 2009. The private sector bank declared its results after market hours on Monday, 18 October 2010.

Auto stocks, though down, outperformed the Sensex in anticipation of robust sales during the ongoing festive season that lasts till Diwali early next month. India’s top small car maker by sales, Maruti Suzuki India fell 0.62%. The company announces its Q2 September 2010 earnings on 30 October 2010.

India’s largest truck maker by sales Tata Motors slipped 0.32%. The company’s global vehicle sales rose 19% to 86,996 units in September 2010 over September 2009.

India’s largest tractor and utility vehicles maker Mahindra & Mahindra (M&M) shed 0.31%.

India’s leading bike maker by sales Hero Honda Motors rose 1.53% on recent reports of US private equity firms Carlyle, Kohlberg Kravis Roberts & Co and Warburg Pincus are in talks to acquire an effective 15-18% stake in the company. Hero Honda Motors is yet to clarify on this report.

Bajaj Auto slipped 1.13% on profit booking. The company’s net profit jumped 69% to Rs 682 crore on 52% growth in turnover to Rs 4426 crore in Q2 September 2010 over Q2 September 2009. Bajaj Auto said EBITDA (earnings before interest, taxation, deprecation and amortization) margin improved to 20.7% in Q2 September 2010 from 20% in Q1 June 2010, on the back of a richer product mix and record sales volumes. The company said its operating margins continue to be the best in the industry.

Bajaj Auto further said the company is on track to achieve its target of sales of 4 million vehicles for the year ending March 2011 (FY 2011), with an EBITDA margin of 20%

India’s largest engineering & construction firm by sales Larsen & Toubro fell 1.15% to Rs 1989.90. The company has secured an order worth Rs 1449 crore from DB Power for balance of plant package.

L&T during market hours on Monday, 18 October 2010 reported 19.59% rise in profit after tax from ordinary activities to Rs 694.14 crore on 17.72% rise in net sales to Rs 9260.77 crore in Q2 September 2010 over Q2 September 2009.

Zee Entertainment Enterprises jumped 1.44% after chief executive officer Punit Goenka said the company has sought permission to launch 6-7 new channels. The company, which currently has 32 channels, plans to launch a food, golf and regional language channels among others, Goenka said.

Biocon jumped 12.15% after the company entered into a $350-million strategic alliance with US drug-major Pfizer for marketing insulin products. Biocon announced the deal with the US drug major after market hours on Monday, 18 October 2010.

Natco Pharma lost 2.04%, after Celgene Corporation filed a lawsuit in the US against Natco’s application to the US Food & Drug Administration to sell a generic version of its blood cancer drug Revlimid. The company confirmed the law suit during trading hours today, 19 October 2010.

Glenmark Pharmaceuticals rose 5.1% to Rs 310.20. The company will announce its Q2 result on 27 October 2010.

Camlin fell 5.46% after net profit fell 12.7% to Rs 0.89 crore on 11.1% rise in net sales to Rs 78.59 crore in Q2 September 2010 over Q2 September 2009. The company announced the Q2 result after market hours on Monday, 18 October 2010.

VTM jumped 20% after net profit galloped 790.4% to Rs 4.63 crore on 74.1% rise in net sales to Rs 30.64 crore in Q2 September 2010 over Q2 September 2009. The company declared its results after market hours on Monday, 18 October 2010.

SE Investments surged 4.99% after the company fixed 1 November 2010 as the record date for a 2-for-1 stock split. The company announced the record date during trading hours today, 19 October 2010.

Bedmutha Industries was the turnover topper on the BSE, with turnover of Rs 195.76 crore followed by Biocon (Rs 194.06 crore), Commercial Engineers & Body Builders Company (Rs 144.47 crore), State Bank of India (Rs 118.94 crore), and Infosys (Rs 96.44 crore), in that order.

Cals Refineries was the top traded counter on the BSE with volume of 2.68 crore shares followed by Karuturi Global (1.87 crore shares), Commercial Engineers & Body Builders Company (1.16 crore shares), Shree Ashtavinayak Cine Vision (1.15 crore shares), and JM Financial (1.11 crore shares), in that order.

The initial public offer of state-run Coal India was subscribed 27% by 16:00 IST on the first day of the issue today, 18 October 2010, data on NSE website showed. Market men are worried that the Coal India IPO, billed as the country’s largest issue ever, will soak liquidity from the secondary market. The government plans to raise about Rs 15,000 crore from divestment of 10% stake in Coal India.

The BSE Sensex and the S&P CNX Nifty regained their psychological 20,000 and 6,000 levels, respectively after falling below those levels in intraday trade. The Sensex settled 43.84 points or 0.22% higher at 20,168.89, up 298.38 points from the day’s low and off 60.50 points from the day’s high. The turnover on BSE was lower as compared with that on Friday, 15 October 2010. Shares of debutante Commercial Engineers & Body Builders Company settled at discount over the initial public offer price with high volumes.

The market breadth was weak, compared with a positive breadth in the opening trade. Banking stocks and select IT pivotals staged a strong intraday rebound. Oil & gas stocks were in demand on news-based developments. Index heavyweights Reliance Industries (RIL) jumped over 2% and ONGC gained over 1.5%. Most metal stocks edged lower, weighed by fall in metal prices on the London Metal Exchange, on Friday, 15 October 2010. Bank stocks bounced back on expectations of strong Q2 results. Telecom pivotals saw divergent trend. Fertiliser shares declined on profit booking after recent solid surge.

Weird quotes were seen during the 15-minute pre-open session that began on BSE and NSE today, 18 October 2010, with a wide difference in the Sensex and Nifty values. In the pre-open session that began on the bourses today, 18 October 2010, the first eight minutes are reserved for order entry, modification and cancellation. The next four minutes were set aside for order matching and trade confirmation. The remaining three minutes will facilitate the transition from call auction to normal open session.

NSE’s volatility index, India VIX, a gauge of traders’ perception of near-term risks in the market based on options prices, declined 1.32% to 22.35. The index had jumped 9.95% to 22.65 on Friday, 15 October 2010. The index had risen 2.9% at 20.60 on Thursday, 14 October 2010. India VIX is calculated based on the S&P CNX Nifty options prices. India VIX is a measure of the market’s expectation of volatility over the next 30 calendar days.

The near term focus of the market is on Q2 September 2010 quarter earnings as brokerage update their earnings estimates to FY 2012 (year ending March 2012) taking into consideration the latest quarterly earning.

Tier-1 IT firms viz. TCS, Wipro, and HCL Technologies are seen reporting strong earnings growth in Q2 September 2010 as high volumes will boost operating margins. However, the IT sector faces headwind of a firm rupee in Q3 December 2010. Higher volumes and price hike will aid earnings growth of most auto firms in Q2 September 2010 though analysts will closely eye operating profit margins and outlook on margins in the face of rising metal prices

Banks are seen reporting decent-to-strong earnings growth on the back of pick-up in credit offtake. Manufacturers of base metals are also seen reporting strong Q2 results on the back of higher metal prices. Increase in product prices will offset higher input costs for consumer staples firms in Q2 September 2010. But, cement firms will report dismal results due to a sharp fall in cement prices during the monsoon season.

European stocks moved off initial lows on Monday, 18 October 2010. The key benchmark indices in Germany and UK were up 0.26% and 0.07% respectively. France’s CAC was down 0.09%.

France’s interior minister, citing Saudi intelligence, said the country is under threat of a terror attack by al-Qaeda, media reports say. Minister Brice Hortefeux said Saudi officials spoke of a threat in Europe, particularly in France, media reports say. The group Al-Qaeda in the Arabian Peninsula was active or planning to be active, Hortefeux said in an interview broadcast Sunday.

Asian stocks fell on Monday, 18 October 2010, as investors took some profits ahead of a widely expected easing in US monetary policy. The key benchmark indices in China, Japan, South Korea, Singapore, Taiwan, Indonesia and Hong Kong were down by between 0.02% to 1.76%.

Chinese stocks reversed sharp early gains to end lower, snapping a seven-session winning run as some airline and commodity producers came under selling pressure in afternoon trade. The Shanghai Composite index, which topped the psychologically-important 3,000-point level during the session, ended 0.5% lower at 2,955.23. Data on China’s third-quarter gross domestic product and consumer-level price inflation is due on Thursday, 21 October 2010.

US markets ended on a mixed note on Friday, 15 October 2010, with the Dow Jones Industrial Average edging lower, weighed by financials stocks. The Dow declined 31.79 points or 0.3% to 11,062.78. But, the S&P 500 index rose 2.38 points or 0.2% to 1176.19. The Nasdaq Composite index climbed 33.39 points or 1.37% to 2,468.77, with the index lifted by strong Google Inc. quarterly results.

US economic news was mixed on Friday. Investors liked the fact that Ben Bernanke, chairman of the US Federal Reserve, addressed the issue of additional economic stimulus, raising the possibility that the central bank will attempt to put the economic recovery back on track. There are hopes that the Fed will embark on another round of quantitative easing, which involves pumping more money into the US economy by purchasing government bonds and taking other measures to encourage lending.

US retail sales rose 0.6% in September 2010, topping expectations. However, consumer sentiment as measured by the University of Michigan declined.

Trading in US index futures indicated that the Dow could fall 42 points at the opening bell on Monday, 18 October 2010. US index futures were off initial lows.

Back home, the initial public offer (IPO) of state-run Coal India was subscribed 27% by 16:00 IST on day one of the issue today, 18 October 2010. The issue, which is billed as India’s largest ever, closes on Thursday, 21 October 2010. The government plans to raise about Rs 15,000 crore from divestment of 10% stake in Coal India.

The government has set Rs 225-245 per share price band for the Coal India IPO. Retail investors and company employees will get shares at 5% discount on the final issue price to be discovered through the book-building route. The Indian government is selling 63.16 crore Coal India shares, or 10% of the company.

A section of the market is concerned that a strong equity issuance pipeline over the next six months will soak liquidity from the secondary equity markets. Indian companies are estimated to raise about Rs 80000 crore from share sales over the next three to six months. This includes the large initial public offer (IPO) from Coal India, which is current open for bidding.

Meanwhile, as per an industry body survey, the business confidence of India Inc. for the October-December 2010 quarter declined on concerns such as inflation and high interest rates. The Confederation of Indian Industry (CII) 74th Business Outlook Survey showed the industry lobby’s business confidence index for October-December 2010 fell by 1.4 points to 66.2 as compared to an increase of 1.5 points during April-September 2010. The index reflects the expectation of Indian industry about the performance of companies, sectors and the economy. The survey found inflationary conditions, slackening consumer demand, cost and availability of labour and high interest rates as the top concerns.

Coming back to stocks, foreign funds have made heavy purchases of Indian equities this year. Net equity inflow in 2010 now stands at a record $23.36 billion, above last year’s $17.45 billion, as per data from the Securities & Exchange Board of India (Sebi). The Sebi data includes FII inflow through primary and secondary market route.

A sizable chuck of FII inflow this year is from India-focused exchange traded funds as well as long-only funds.

Foreign funds sold shares worth a net Rs 112.75 crore on Friday, 15 October 2010, as per the provisional data from the stock exchanges. Domestic funds dumped shares worth a net Rs 1053.45 crore on that day.

Bond yields rose as higher inflation in September 2010 has raised the chances of a rate hike at the central bank’s next policy review on 2 November 2010. The yield on the most traded 8.13% 2,022 bond was hovering at 8.12%, compared with Friday’s (15 October 2010) close of 8.09%. The yield on the benchmark 10-year bond was hovering at 8.09%, compared with Friday’s (15 October 2010) close of 8.07%.

The wholesale-price index rose 8.62% in September 2010 from a year earlier, higher than the annual rise of 8.5% in August 2010, government data showed on Friday, 15 October 2010. The annual reading for July 2010 was upwardly revised to 10.31%. The Reserve Bank of India (RBI) next reviews monetary policy on 2 November 2010.

A separate data showed the food inflation rose marginally to 16.37% for the week ended 2 October 2010, on the back of higher prices of cereals, fruits, select vegetables and milk. Food inflation was at 16.24% for the week ended 25 September 2010.

Customs, Central Excise and Service Tax revenue collections at all India level rose 44.4% to Rs 150686 crore during April-September 2010 as compared to corresponding period in previous year, data released on 13 October 2010 showed.

Industrial production rose at a much slower-than-expected 5.6% in August 2010 from a year earlier, sharply lower than the previous month’s revised 15.2% growth, data showed on Tuesday, 12 October 2010. Manufacturing output rose an annual 5.9% in August 2010, lower than a 10.6% rise in August 2009. Industrial production growth for July 2010 was revised upwards to 15.2% from 13.8% earlier.

The Reserve Bank of India (RBI) governor D Subbarao on Friday, 15 October 2010, said the RBI was watching the exchange rate situation and will intervene in the forex market if inflows are lumpy and volatile. India must manage capital inflows so that it can fund its current account deficit while at the same time not harming exports, Deputy Governor Subir Gokarn had said on Thursday 14 October 2010. The rupee hit a 25-1/2-month high above 44 per dollar on Friday, 15 October 2010.

“The Coal India IPO may add pressure on liquidity at least temporarily, so it is something that we will look at and if the circumstances warrant, we will think about responding,” Gokarn said late last week.

The BSE 30-share Sensex was up 43.84 points or 0.22% to 20,168.89. The Sensex lost 254.54 points at the day’s low of 19,870.51 in morning trade. The index rose 104.34 points at the day’s high of 20,229.39 in late trade.

The S&P CNX Nifty was up 13.30 points or 0.22% to 6,075.95.

The market breadth, indicating the health of the market, was weak. The breadth was positive in opening session. On BSE, 1754 shares declined while 1286 shares advanced. A total of 79 shares remained unchanged.

The total turnover on BSE amounted to Rs 4401 crore, lower than Friday’s turnover of Rs 5292.57 crore.

The BSE Mid-Cap index fell 0.47% to 8,272.22 and the BSE Small-Cap index declined 0.15% to 10,613.85. Both these indices underperformed the Sensex.

Sectoral indices on BSE displayed mixed trend. The BSE Consumer Durables index (down 1.02%), the BSE FMCG (down 0.18%), and the BSE Power index (down 0.17%), underperformed the Sensex.

The BSE IT (up 1.28%), the BSE Oil & Gas index (up 0.84%), and the BSE Realty index (up 0.72%), outperformed the Sensex.

Among the 30-share Sensex pack, 16 declined while the rest advanced.

ACC (down 2.96%), Tata Power (down 1.92%), Jaiprakash Associates (down 1.76%), edged lower from the Sensex pack. NTPC (up 1.33%), Reliance Infrastructure (up 1.03%), and DLF (up 0.83%), edged higher from the Sensex pack.

IT stocks rebounded sharply from the days’ lows as the rupee declined against the dollar after a steep rally over the past one month or so. The partially convertible rupee was trading at 44.28/29 a dollar, weaker than Friday’s (15 October 2010) close of 44.10/11, a 25-month closing high. A firm rupee negatively impacts operating profit margin of IT firms as the sector derives a lion’s share of revenue from exports.

India’s largest IT exporter by sales TCS surged 3.20% to Rs 981.40, off day’s low of Rs 931 and was the top gainer from the Sensex pack. The company announces its Q2 September 2010 results on 21 October 2010.

India’s second largest IT exporter by sales Infosys rose 0.84% to Rs 3102, after sliding to day’s low of Rs 3043. Infosys before market hours on Friday, 15 October 2010, reported a 16.7% rise in consolidated net profit as per International Financial Reporting Standards (IFRS) to Rs 1737 crore on 12.1% growth in revenue to Rs 6947 crore in Q2 September 2010 over Q1 June 2010. The core operating profit margin (OPM) surged to 30.2% in Q2 September 2010 from 28.31% in Q1 June 2010.

Infosys also raised its earnings as well revenue forecast for the year ending March 2011 in both dollar and rupee terms. But, it cautioned about the global economic environment.

India’s third largest software services exporter by sales Wipro slipped 1.16% to Rs 468. Nevertheless, the stock rebounded from day’s low of Rs 461. The company announces its Q2 September 2010 results on 22 October 2010.

HCL Technologies rose 3.5% ahead of its Q1 September 2010 results on 20 October 2010.

Oil & gas stocks were in demand on news-based developments. Index heavyweight Reliance Industries (RIL) jumped 2.18% to Rs 1063.60, with bulk of the gains materializing at the fag end of the trading session. The stock’s came of sharply from day’s low of Rs 1034.25. Reportedly, RIL has set aside Rs 5000 crore to build malls and form ventures with global brands in the next two years.

India’s largest oil exploration firm by sales Oil and Natural Gas Corporation (ONGC) advanced 1.83%. The company on Saturday, 16 October 2010 said it has made two new discoveries of oil and gas reserves — gas at the Krishna-Godavari basin block and oil in the Cauvery basin.

State-run oil marketing firm BPCL rose 0.71% after company on Friday, 15 October 2010, hiked petrol prices by 70 paise per litre effective midnight Friday.

Among other oil marketing firms, HPCL advanced 0.48% and Indian Oil Corporation gained 0.31%.

Petronet LNG jumped 8.3% ahead of its Q2 September 2010 results on 25 October 2010.

India’s largest engineering and construction firm by sales Larsen & Toubro (L&T) rose 1.03% to Rs 2010, recovering sharply from day’s low of Rs 1928.80. Profit after tax from ordinary activities rose 19.59% to Rs 694.14 crore on 17.72% rise in net sales to Rs 9260.77 crore in Q2 September 2010 over Q2 September 2009. The company announced the result during market hours today.

The L&T management maintained its revenue growth forecast at 20% for the year ending March 2011 (FY 2011). A senior executive of the company said the order book is seen rising 25% in FY 2011, maintaining the earlier guidance.

India’s largest mortgage lender by total income HDFC rose 0.16% to Rs 728, off day’s low of Rs 705.55, on strong Q2 results. Net profit rose 21.62% to Rs 807.54 crore on 4.2% rise in total income to Rs 2970.22 crore in Q2 September 2010 over Q2 September 2009. The company announced the results during trading hours.

Bank stocks bounced back on expectations of strong Q2 results. India’s second largest private sector bank by total income HDFC Bank rose 1.03% to Rs 2411, after sliding to day’s low of Rs 2352.55 in intra-day trade.

India’s largest private sector bank by total income ICICI Bank lost 0.76%. The stock came off the day’s low of Rs 1,094.30.

India’s largest truck maker by sales Tata Motors rose 1.34% to Rs 1172, off the day’s low of Rs 1131.35. The company’s global vehicle sales rose 19% to 86,996 units in September 2010 over September 2009.

India’s largest bike maker Hero Honda Motors fell 0.07% to Rs 1801.05 in volatile trade after moving in a band of Rs 1790-1814.50. As per reports, US private equity firms Carlyle, Kohlberg Kravis Roberts & Co and Warburg Pincus are in talks to acquire an effective 15-18% stake in the company.

Telecom pivotals saw divergent trend. India’s largest cellular services provider by sales Bharti Airtel dropped 2.02%. The company added 2.04 million mobile users in September 2010 versus 2.03 million in August 2010.

India’s largest cellular services provider by sales Reliance Communications (RCom) rose 0.17% after the company it said signed up 2 million mobile users in September 2010. RCom had 115.3 million users as of end-August 2010.

Most metal stocks edged lower after LMEX, a gauge of six metals traded on the London Metal Exchange, declined 0.42% on Friday, 15 October 2010.

Steel Authority of India (down 0.14%), Sesa Goa (down 0.91%), National Aluminium Company (down 1.27%), Hindalco Industries (down 0.78%), JSW Steel (down 0.24%), declined.

However, Tata Steel (up 1.86%), Hindustan Zinc (up 0.53%), and Jindal Saw (up 3.47 %), rose.

India’s largest non-ferrous metal firm by sales Sterlite Industries India was down 0.92%. The Supreme Court on Monday, 18 October 2010, extended a stay on a lower court order asking Sterlite Industries to close its copper smelter in south India. The stay will continue till the second week of December 2010, allowing the unit to continue its operations.

On 1 October 2010, the Supreme Court had stayed till 18 October 2010 an order from the Madras High Court asking Sterlite to shut its smelter in Tuticorin on environmental grounds.

Fertiliser shares declined on profit booking after a recent surge triggered by optimism good rains this year will boost sales. Coromandel International (down 3.22%), Zuari Industries (down 3.23%), Rashtriya Chemicals & Fertilisers (down 5.02%), Deepak Fertilisers (down 0.31%), Chambal Fertiliser & Chemicals (down 7.80%), GSFC (down 5.77%), Nagarjuna Fertilisers & Chemicals (down 3.91%) and National Fertilisers (down 2.28%), declined.

Jay Bharat Maruti was locked at 20% upper limit, extending gains for the second day, after net profit jumped 133% to Rs 10.30 crore in Q2 September 2010 over Q2 September 2009. The company declared its results during trading hours on Friday, 15 October 2010, when the stock had gained 5.07% to Rs 81.80.

Dr Reddy’s Laboratories gained 1.01% after the company received approval from the US Food & Drug Administration to market Lansoprazole delayed release capsules in United States. The company made this announcement on Saturday, 16 October 2010.

Shiva Cement was locked at 20% upper limit after the company said its cement dispatches grew 12.6% in September 2010 over September 2009. The company made this announcement during trading hours today, 18 October 2010.

Kiri Dyes & Chemicals rose 4.70% after the company’s board decided to open bidding for a proposal qualified institutional placement of shares on Thursday, 21 October 2010.

Surana Telecom and Power jumped 10.27% after company said that it has been allocated a solar power project of 5 megawatt capacity from the state government of Gujarat. The company announced this during market hours today, 18 October 2010.

Indiabulls Real Estate jumped 5.39%. The company will announce its Q2 September 2010 results on 20 October 2010.

Piramal Healthcare rose 3.58%. The company will announce its Q2 results on 22 October 2010.

Shares of Commercial Engineers & Body Builders Company (CEBBCO) settled at Rs 112.25 on BSE, an 11.61% discount to the initial public offer price of Rs 127. The stock debuted at Rs 122.80, a discount of 3.3% to the issue price of Rs 127. It hit a high of Rs 144.80 and a low of Rs 106.30 during the day.

Bedmutha Industries was the top traded counter on the BSE with turnover of Rs 378.52 crore followed by Commercial Engineers & Body Builders Company (Rs 138.20 crore), Larsen & Toubro (Rs 137.72 crore), State Bank of India (Rs 88.10 crore), and Reliance Industries (Rs 86.95 crore), in that order.

Cals Refineries was the top traded counter on the BSE with volume of 1.98 crore shares followed by Bedmutha Industries (1.83 crore shares), Commercial Engineers & Body Builders Company (1.14 crore shares), Pipavav Shipyard (97.36 lakh shares), and Alok Industries (86.89 lakh shares), in that order.

Investors have resorted to profit taking ahead of a mega Rs 15000-crore initial public offer (IPO) of state-run Coal India next week. The Coal India IPO, billed as the country’s largest issue ever, will soak liquidity from the secondary market. Latest data showing higher inflation in September 2010 also weighed on investor sentiment today, 15 October 2010.

The Bombay Stock Exchange (BSE) and the National Stock Exchange (NSE) have decided to implement ‘pre-market call auctions’ which is a special 15-minute trading window starting at 9:00 IST from Monday, 18 October 2010. The aim of this exercise is to enable better price discovery in the market at the opening bell.

Coming back to today’s trade, the market breadth was weak, in contrast with a strong breadth at the onset of the trading session. All the sectoral indices on the BSE suffered losses, with shares from IT, banking, and metal stocks worst hit. Index heavyweights Reliance Industries (RIL) and Bharti Airtel declined sharply in late trade. IT stocks tumbled after sector bellwether Infosys cautioned about the global economic environment at the time of announcing Q2 September 2010 results before trading hours today. Telecom pivotals and auto stocks drifted lower on profit booking. Select fertiliser stocks were in demand on optimism good rains this year will boost sales.

Infosys reported strong Q2 September 2010 results and the IT bellwether raised its earnings as well revenue forecast for the year ending March 2011, in both dollar and rupee terms at the time of announcing the second results. But, the Infosys stock tanked over 3% on profit booking, giving up initial gains that pushed the scrip to a record high. TCS, too, fell after hitting a record high in early trade.

The market edged lower amid a bout of volatility in early trade. The market came off the lower level after hitting the day’s low in morning trade. The market moved in a narrow range later. The market slumped to a fresh intraday low in early afternoon trade. The market extended losses in afternoon trade. Weakness persisted in mid-afternoon trade. The market slumped to the day’s low on heavy selling in late trade.

NSE’s volatility index, India VIX, a gauge of traders’ perception of near-term risks in the market based on options prices, jumped 9.95% to 22.65. The index had risen 2.9% at 20.60 on Thursday, 14 October 2010. The index had lost 2.39% to 20.02 on Wednesday, 13 October 2010. The index had declined 3.25% to 20.51 on Tuesday, 12 October 2010. The index had lost 0.93% to 21.20 on Monday, 11 October 2010. The index had lost 4.68% at 21.40 on Friday, 8 October 2010, a day after rising 3.31% to 22.45 on Thursday, 7 October 2010. India VIX is calculated based on the S&P CNX Nifty options prices. India VIX is a measure of the market’s expectation of volatility over the next 30 calendar days.

Bond yields rose on higher inflation in September 2010. The yield on the most traded 8.13% 2,022 bond was hovering at 8.09%, compared with Thursday’s (14 October 2010) close of 8.06%. The yield on the benchmark 10-year bond was hovering at 8.07%, compared with Thursday’s (14 October 2010) close of 8.02%.

The wholesale-price index rose 8.62% in September 2010 from a year earlier, higher than the annual rise of 8.5% in August 2010, the latest government data showed. The annual reading for July 2010 was upwardly revised to 10.31%. The Reserve Bank of India (RBI) next reviews monetary policy on 2 November 2010.

A separate data showed the food inflation rose marginally to 16.37% for the week ended 2 October 2010, on the back of higher prices of cereals, fruits, select vegetables and milk. Food inflation was at 16.24% for the week ended 25 September 2010.

The near term focus of the market is on Q2 September 2010 results. Brokerage earnings estimates now rolling over to FY 2012 (year ending March 2012).

Tier-1 IT firms viz. TCS, Wipro, and HCL Technologies are seen reporting strong earnings growth in Q2 September 2010 as high volumes will boost operating margins. However, the IT sector faces headwind of a firm rupee in Q3 December 2010. The rupee today, 15 October 2010, hit a 2-year high against the dollar. Higher volumes and price hike will aid earnings growth of most auto firms in Q2 September 2010 though analysts will closely eye operating profit margins and outlook on margins in the face of rising metal prices.

Banks are seen reporting decent-to-strong earnings growth on the back of pick-up in credit offtake. Manufacturers of base metals are also seen reporting strong Q2 results on the back of higher metal prices. Increase in product prices will offset higher input costs for consumer staples firms in Q2 September 2010. But, cement firms will report dismal results due to a sharp fall in cement prices during the monsoon season.

European shares were trading mixed on Friday, 15 October 2010, with the technology sector supported by strong results from US peer Google and as oil majors gained as crude prices climbed towards $83 on the back of a weak dollar. The key benchmark indices in France and Germany were up 0.14% and 0.16% respectively. However, UK’s FTSE 100 index was down 0.32%.

Most Asian markets edged lower on Friday, 15 October 2010, with banking stocks in Seoul and Sydney weighing on those markets. The key benchmark indices in Japan, Taiwan, Indonesia and Hong Kong were down by between 0.12% to 0.87%. However, key benchmark indices in China, South Korea, and Singapore were up by between 0.13% and 3.18%.

Some investors took cash off the table after Thursday’s (14 October 2010) rally and ahead of Federal Reserve Chairman Bernanke’s speech at a conference in Boston later in the global day. Markets will be watching closely for clues on the timing and extent of any further quantitative easing measures to kick start an ailing US economy.

Meanwhile, South Korea, which will in November 2010 chair a Group of 20 economies summit, today, 15 October 2010, warned that international tensions over foreign exchange policy could lead to increased trade protectionism. South Korea and China are sparring with each other in what may be seen as a currency war. Brazil, South Korea and Thailand have all announced measures to restrain surging overseas inflows. Singapore recently took steps to boost its currency to curb inflation.

Trading in US index futures indicated the Dow could fall 14 points at the opening bell on Friday, 15 October 2010. US index futures swung between gains and losses.

US stocks ended slightly lower on Thursday, 14 October 2010 as investors retreated from financials because of concerns over banks’ foreclosure practices. The Dow Jones Industrial Average fell 1.51 points, or 0.01%, to 11094.6, snapping a four-session winning streak in a day of choppy trading. The Nasdaq Composite index shed 5.85 points, or 0.24%, to 2435.38 and the Standard & Poor’s 500-stock index fell 4.29, or 0.36%, to 1173.81.

Back home, foreign funds continue to aggressively mop up Indian stocks. Net equity inflow in 2010 now stands at a record $23.36 billion, above last year’s $17.45 billion, as per data from the Securities & Exchange Board of India (Sebi). The Sebi data includes FII inflow through primary and secondary market route.

A sizable chuck of FII inflow this year is from India-focused exchange traded funds as well as long-only funds.

But, a section of the market is concerned that a strong equity issuance pipeline over the next six months will soak liquidity from the secondary equity markets. Indian companies are estimated to raise about Rs 36,000 crore from share sales over the next three to six months. This includes a large initial public offer (IPO) from Coal India. The government plans to raise about Rs 15,000 crore from divestment of 10% stake in Coal India. The Coal India IPO is billed as the country’s largest issue ever. The IPO of Coal India opens for bidding on Monday, 18 October 2010 and closes on Thursday, 21 October 2010.

The government has set Rs 225-245 per share price band for the Coal India IPO. Retail investors will get shares at 5% discount on the final issue price to be discovered through the book-building route. The Indian government is selling roughly 63.16 crore Coal India shares, or 10% of the company.

The Reserve Bank of India (RBI) governor D Subbarao today, 15 October 2010, said the RBI was watching the exchange rate situation and will intervene in the forex market if inflows are lumpy and volatile. India must manage capital inflows so that it can fund its current account deficit while at the same time not harming exports, Deputy Governor Subir Gokarn had said on Thursday 14 October 2010. The rupee today, 15 October 2010, strengthened past 44 per dollar, hitting a 25-1/2-month high.

“The Coal India IPO may add pressure on liquidity at least temporarily, so it is something that we will look at and if the circumstances warrant, we will think about responding,” Gokarn said at the press conference.

Global emerging-market equity funds attracted more cash for a sixth straight week as overseas investors sought faster growth amid expectations the US Federal Reserve will add stimulus. Developing-nation stock funds took in $4.1 billion for the week ended 13 October 2010, more than half the $7.63 billion total investors put into equity funds, according to data from global fund tracker EPFR Global.

Customs, Central Excise and Service Tax revenue collections at all India level rose 44.4% to Rs 150686 crore during April-September 2010 as compared to corresponding period in previous year, data released on 13 October 2010 showed.

Industrial production rose at a much slower-than-expected 5.6% in August 2010 from a year earlier, sharply lower than the previous month’s revised 15.2% growth, data showed on Tuesday, 12 October 2010. Manufacturing output rose an annual 5.9% in August 2010, lower than a 10.6% rise in August 2009. Industrial production growth for July 2010 was revised upwards to 15.2% from 13.8% earlier.

The BSE 30-share Sensex was down 372.59 points or 1.82% to 20,125.05. The index lost 407.46 points at the day’s low of 20,090.18 in late trade. The Sensex rose 80.81 points at the day’s high of 20,578.45 in early trade.

The S&P CNX Nifty was down 114.70 points or 1.86% to 6,062.65.

The market breadth, indicating the health of the market was weak, in contrast with a strong breadth at the onset of the trading session. On BSE, 2058 shares declined while 997 shares advanced. A total of 94 shares remained unchanged.

The total turnover on BSE amounted to Rs 5252 crore, lower than Rs 6746 crore on Thursday, 14 October 2010

The BSE Mid-Cap index fell 1.22% to 8,311.66 and the BSE Small-Cap index declined 0.74% to 10,629.65. Both these indices outperformed the Sensex.

Among sectoral action, the BSE IT index (down 3.25%), the BSE Teck (down 3.01%), and the BSE Auto index (down 2%), underperformed the Sensex.

The BSE Realty (down 0.96%), the BSE Power index (down 0.98%), and the BSE HealthCare index (down 1.13%), outperformed the Sensex.

Among the 30-share Sensex pack, 28 declined while only 2 of them managed gains. DLF (down 2.53%), and ACC (down 2.09%), were among the leading Sensex losers.

NTPC (up 0.27%), and Cipla (up 0.10%), edged higher from the Sensex pack.

IT stocks tumbled after sector bellwether Infosys cautioned about the global economic environment at the time of announcing Q2 September 2010 results before trading hours today. Infosys Technologies slipped 3.15% to Rs 3,083.80, halting three-day 3.67% gain, on profit booking. The stock retraced after striking a record high of Rs 3,249 today.

Infosys before market hours today reported strong Q2 September 2010 results. Consolidated net profit as per International Financial Reporting Standards (IFRS) jumped 16.7% to Rs 1737 crore on 12.1% growth in revenue to Rs 6947 crore in Q2 September 2010 over Q1 June 2010. The core operating profit margin (OPM) surged to 30.2% in Q2 September 2010 from 28.31% in Q1 June 2010.

Infosys has raised its earnings as well revenue forecast for the year ending March 2011 in both dollar and rupee terms. Infosys now expects a between 11.4% to 13.2% growth in earnings per American depository share (ADS) at between $2.54 to $2.58 for the year ending March 2011 (FY 2011) over the year ended March 2010 (FY 2010). The company expects a between 6.4% to 8.2% growth in EPS in rupee terms at between Rs 115.07 to Rs 117.07 for FY 2011.

As far as the top line is concerned, Infosys now expects a 24% to 25% growth on consolidated revenue in dollar terms at between $5.95 billion to $6 billion for FY 2011. The company expects 18.5% to 19.4% growth in revenue in rupee terms at between Rs 26951 crore to Rs 27165 crore for FY 2011.

But, Infosys officials cautioned about the global economic environment. Chief Financial Officer V. Balakrishnan said the continued global economic uncertainty, coupled with extreme currency volatility, is a concern for the IT industry. “Though the economic environment continues to be challenging, we have leveraged our client relationships, solutions and investments to grow faster in this quarter,” S. Gopalakrishnan, the company’s chief executive and managing director, said in the earnings statement.

At the time of announcing the second quarter results, the Infosys board declared interim dividend of Rs 10 per equity share and a special dividend of Rs 30 per share on 30th year of operations of the company.

India’s third largest software services exporter by sales Wipro lost 4.13% to Rs 470.80. The company announces its Q2 September 2010 results on 22 October 2010. It was the top loser from the Sensex pack.

India’s largest IT exporter by sales TCS declined 3.52% to Rs 951, after striking a record high of Rs 1010 in early trade. The company announces its Q2 September 2010 results on 21 October 2010.

Index heavyweight Reliance Industries (RIL) slipped 1.95% to Rs 1037.60 after oscillating in a band of Rs 1036 – 1067.50 during the day. RIL during market hours today said it has raised $1.5 billion in an issue of dollar bonds. A $1 billion, 10-year tranche of the issue was priced at 205 basis points over US Treasuries, while a $500 million 30-year bond was priced at 240 basis points above Treasuries, RIL said.

The proceeds from the issue by a unit called Reliance Holding USA Inc and guaranteed by the parent will be used in refinancing existing debt, business investments and general corporate purposes, RIL said.

Banking stocks fell for the second day in a row on profit taking. India’s largest private sector bank by total income ICICI Bank fell 1.64% after its American depositary receipt declined 1.73% on the NYSE on Thursday, 14 October 2010. India’s second largest private sector bank by total income HDFC Bank slipped 1.45%.

India’s largest bank by branch network and net profit State Bank of India declined 2.73%.

India’s largest truck maker by sales Tata Motors fell 2.29%. The company’s global vehicle sales rose 19% to 86,996 units in September 2010 over September 2009.

Other auto stocks also drifted lower on profit booking. India’s largest tractor and utility vehicles maker Mahindra & Mahindra (M&M) fell 1.24% and India’s top small car maker by sales, Maruti Suzuki India declined 3.13%.

India’s leading bike maker by sales Hero Honda Motors shed 3.05% while India’s second largest bike maker by sales Bajaj Auto fell 1.24%

Metal stocks fell on profit booking. Sterlite Industries (down 2.01%), Hindalco Industries (down 1.37%), National Aluminum Company (down 1.01%), Steel Authority of India (down 1.60%), Hindustan Zinc (down 0.24%), JSW Steel (down 1.79%), Tata Steel (down 2.63%), fell.

Telecom pivotals declined. India’s largest cellular services provider by sales Bharti Airtel slipped 3.10% and India’s second largest cellular services provider by sales Reliance Communications declined 2.52%.

Bedmutha Industries was the top traded counter on the BSE with turnover of Rs 298.13 crore followed by Orchid Chemicals (Rs 195.67 crore), Infosys (Rs 167.69 crore), Parentral Drugs (Rs 157.70 crore), and Raymond (Rs 106.16 crore), in that order.

Karuturi Global was the top traded counter on the BSE with volume of 2.84 crore shares followed by Cals Refineries (1.99 crore shares), Bedmutha Industries (1.48 crore shares), Jm Financials (1.13 crore shares), and Chambal Fertilisers & Chemicals (1.05 crore shares), in that order.

Select fertiliser stocks were in demand on optimism good rains this year will boost sales. Rashtriya Chemicals and Fertilisers (RCF) (up 4.29%), Chambal Fertiliser & Chemicals (up 3.34%), GNFC (up 0.55%) surged.

Havells India rose 0.97% to Rs 416.10 on reports it plans to bring brands from its international subsidiary Havells Sylvania to India early next year, with five new showrooms in major cities and a big advertising blitz.

Kernex Microsystems India was locked at the upper circuit of 5% after the company reported net profit of Rs 2.92 crore for Q2 September 2010 as against a net loss of Rs 3.25 crore in Q2 September 2009. The result was announced after trading hours on Thursday, 14 October 2010.

Su-Raj Diamonds & Jewellery gained 1.96% after the company’s board allotted 50 lakh equity shares at Rs 70 per share to two foreign institutional investors, thus raising Rs 35 crore from the issue. The company made this announcement after market hours on Thursday, 14 October 2010.

EID Parry (India) rose 2.13%, after the company said its board will consider stock-split proposal on 25 October 2010 along with Q2 September 2010 result

NSE’s volatility index, India VIX, a gauge of traders’ perception of near-term risks in the market based on options prices, lost 2.39% to 20.02. The index had declined 3.25% to 20.51 on Tuesday, 12 October 2010. The index had lost 0.93% to 21.20 on Monday, 11 October 2010. The index had lost 4.68% at 21.40 on Friday, 8 October 2010, a day after rising 3.31% to 22.45 on Thursday, 7 October 2010. India VIX is calculated based on the S&P CNX Nifty options prices. India VIX is a measure of the market’s expectation of volatility over the next 30 calendar days.

European stocks surged on Wednesday, 13 October 2010, with investors encouraged by signs the US Federal Reserve may take further action to bolster the US economy. The key benchmark indices in UK, France and Germany were up by 1.22% to 1.51%.

The minutes from the Fed’s meeting on 21 September 2010 suggested that the US central bank is almost certain to take steps to shore up a recovery in the world’s No. 1 economy at its next policy meeting in early November 2010. The minutes showed the Fed was concerned that the economy was growing slower than it had expected. Fed officials said in the minutes that they were prepared to provide additional relief “before long.”

Industrial production in the 16-nation euro zone rose 1% in August and was up 7.9% compared to the same month last year, the European Union statistics agency Eurostat reported Wednesday. Economists had forecast a 0.7% monthly rise and a 7.5% year-on-year increase. Output rose 0.1% in July for a 7.2% year-on-year increase.

Asian stocks rose Wednesday, 13 October 2010, as the minutes from the Federal Reserve’s latest meeting signaled that the US central bank will soon act to boost growth. The key benchmark indices in Japan, Indonesia, South Korea, Hong Kong, Taiwan and Singapore rose by between 0.16% to 1.82%.

Chinese stocks recovered in volatile trade after data showed the nation’s trade surplus narrowed to $16.88 billion in September 2010 from a $20.03 billion surplus in August 2010. The Shanghai Composite index rose 0.7%. The trade surplus for September 2010 was below economists’ expectations for a $18.5 billion surplus. Although export growth slowed from a year earlier, they were still up 4.1% on-month, while imports rose 7.4% to reach a historic high, suggesting the economy continued to grow at a reasonable pace.

US stocks hit fresh 5-month highs on Tuesday, 12 October 2010, as details from the Fed’s latest meeting showed the US central bank may once again flood markets with cheap cash “before long” to further boost growth.

Intel Corp on Tuesday reported stronger-than-expected third-quarter results and forecast better sales in the fourth quarter.

Trading in US index futures indicated that the Dow could jump 66 points at the opening bell on Wednesday, 13 October 2010.

Back home, industrial production rose at a much slower-than-expected 5.6% in August 2010 from a year earlier, sharply lower than the previous month’s revised 15.2% growth, data showed on Tuesday, 12 October 2010. Manufacturing output rose an annual 5.9% in August 2010, lower than a 10.6% rise in August 2009. Industrial production growth for July 2010 was revised upwards to 15.2% from 13.8% earlier.

Output in the mining sector rose 7% verses 11% rise in August 2009 and electricity generation rose just 1% from a 10.6% growth in August 2009. Intermediate goods production rose 10% verses a 10.4% rise in August 2009 and basis goods production rose 3.7% verses a 7.7% rise in August 2009. Capital goods production contracted 2.6% in August 2010 verses a 9.2% growth in August 2009.

Production of consumer goods rose 6.9%, lower than a 10.9% growth in August 2009. Within the consumer goods segment, the consumer durables sector put up a strong showing. Production of consumer durables jumped 26.5% verses a 24.7% growth in August 2009. But, production of consumer non-durables contracted 1.2% verses a 6.1% growth in August 2009.

The government will unveil data on wholesale price index for September 2010 on Friday, 15 October 2010, which will provide clues on the central bank’s policy stance at its next policy review scheduled on 2 November 2010. The wholesale price index, the most widely watched gauge of prices in India, rose 8.5% in August 2010.

Foreign funds continue to aggressively mop up Indian stocks. Net equity inflow in 2010 now stands at a record $22.01 billion, above last year’s $17.45 billion, as per data from the Securities & Exchange Board of India (Sebi). The Sebi data includes FII inflow through primary and secondary market route.

A sizable chuck of FII inflow this year is from India-focused exchange traded funds as well as long-only funds.

But, a section of the market is concerned that a strong equity issuance pipeline over the next six months will soak liquidity from the secondary equity markets. Indian companies are estimated to raise about Rs 36,000 crore from share sales over the next three to six months. This includes a large initial public offer (IPO) from Coal India this month. The government plans to raise about Rs 15,000 crore from divestment of 10% stake in Coal India. The Coal India IPO is billed as the country’s largest issue ever. The IPO of Coal India opens for bidding on 18 October 2010 and closes on 21 October 2010.

The government on Tuesday, 12 October 2010, set Rs 225-245 per share price band for the Coal India IPO. Retail investors will get shares at 5% discount on the final issue price to be discovered through the book-building route. The Indian government is selling roughly 63.16 crore Coal India shares, or 10% of the company.

The Reserve Bank of India governor D Subbarao said over the weekend in Washington that the central bank would intervene in the foreign exchange market if inflows are “lumpy” and “volatile”. The rupee had dropped to a one-week low on Tuesday, 12 October 2010, after hitting a 25-month high of 44.125 on Thursday, 7 October 2010.

The next major trigger for the stock market is Q2 September 2010 results. Brokerage earnings estimates will now roll over to FY 2012 (year ending March 2012).

Tier-1 IT firms viz. Infosys, TCS, Wipro, and HCL Tech are seen reporting strong earnings growth in Q2 September 2010 as high volumes will boost operating margins. However, the IT sector faces headwind of a firm rupee in Q3 December 2010. The rupee hit a 2-year high against the dollar on Thursday, 7 October 2010. Higher volumes and price hike will aid earnings growth of most auto firms in Q2 September 2010 though analysts will closely eye operating profit margins and outlook on margins in the face of rising metal prices

Banks are seen reporting decent-to-strong earnings growth on the back of pick-up in credit offtake. Manufacturers of base metals are also seen reporting strong Q2 results on the back of higher metal prices. Increase in product prices will offset higher input costs for consumer staples firms in Q2 September 2010. But, cement firms will report dismal results due to a sharp fall in cement prices during the monsoon season.

The BSE 30-share Sensex jumped 484.54 points or 2.4% to 20,687.88, its highest closing since 14 January 2008. The index rose 500.63 points at the day’s high of 20,703.97 in late trade. The Sensex rose 8.32 points at the day’s low of 20,211.66 in early trade.

The S&P CNX Nifty was up 143 points or 2.35% to 6,233.90, its highest closing since 9 January 2008. Nifty hit high of 6,240.25 in late trade.

All the sectoral indices on BSE rose. The BSE IT index (up 3.15%), Capital Goods index (up 2.68%), and Realty index (up 2.51%), outperformed the Sensex. The BSE FMCG index (up 2.29%), banking sector index Bankex (up 2.21%), Oil & Gas index (up 1.56%), Metal index (up 1.41%), Auto index (up 1.39%), PSU index (up 1.19%), Consumer Durables index (up 1.09), Healthcare index (up 1.03%), and Power index (up 0.91%), underperformed the Sensex.

The BSE Mid-Cap index rose 0.99%. The BSE Small-Cap index rose 1.06%. Both these indices underperformed the Sensex.

The market breadth was strong. On BSE, 1,953 shares advanced while 1082 shares declined. A total of 72 shares remained unchanged.

From 30 share Sensex pack, 29 rose and one fell.

BSE clocked turnover of Rs 5632 crore, higher than Rs 5329.30 crore on Tuesday, 12 October 2010.

Index heavyweight Reliance Industries (RIL) rose 1.73%. RIL may reportedly be sitting on yet another gold mine — its D4 block. RIL is the operator of the block with 85% stake. RIL’s partner Niko Resources, which owns 15% in the block located on the east coast of India, has raised initial estimates of gas reserves in the D4 block.

Edward S Sampson, chairman and chief executive officer of Canada-based Niko Resources, told investors in a conference recently that he feels that reserves at the D4 block are twice the size of the D6 block and have prospectivity of up to an exceeding potential for 100TCF gas. RIL said that the appraisal process is presently being undertaken and, therefore, will not comment at this juncture.

HDFC jumped 4.6% and was the top gainer from the Sensex pack.

India’s largest engineering and construction firm by sale Larsen & Toubro (L&T) rose 4.04%, with the stock snapping last two days’ losses. The company said during market on Friday, 8 October 2010, it has bagged new orders worth Rs 1585 crore in buildings & factories segments.

Among other capital goods stocks, BEML, Siemens, Thermax, ABB, BHEL and Praj Industries rose by between 0.07% to 2.67%.

Interest rate sensitive realty stocks rose as a slower than expected rise in industrial output in August 2010 could ease pressure on the central bank to again raise rates at a policy review early next month. Omaxe, Unitech, DLF, Indiabulls Real Estate, Phoenix Mills and Lok Housing rose by between 1.52% to 4.24%.

IT stocks rose after Intel Corp on Tuesday reported stronger-than-expected third-quarter results and forecast better sales in the fourth quarter. India’s largest IT exporter by sales TCS rose 4.56%, with the stock gaining for the second straight day. India’s second largest IT exporter by sales Infosys rose 2.48%, with the stock gaining for the second straight day. Infosys announces its Q2 result on Friday, 15 October 2010. India’s third largest IT exporter by sales Wipro rose 4.48%. The stock hit 52 week high of Rs 488 today.

FMCG stocks rose as good monsoon rains this year could boost rural sales. ITC, Nestle India, Hindustan Unilever, Marico, United Breweries and United Spirits rose by between 0.05% to 3.86%. FMCG firms derive substantial revenue from rural sales.

Consumer durables stocks rose on renewed buying. Blue Star, Lloyd Electric, Gitanjali Gems, Videocon Industries and Titan Industries rose by between 0.53% to 4.49%.

Cement stocks rose on expectations of pick up in demand following the end of the monsoon season. ACC, UltraTech Cements and Ambuja Cements rose by between 2.37% to 3.31%.

Banking stocks rose on a pick-up in credit offtake in a fast rebounding Indian economy. India’s largest commercial bank by net profit and branch network State Bank of India (SBI) rose 2.26%. The stock hit a record high of Rs 3315.60 today. Bank of India and Punjab National Bank rose by between 1.34% to 3.19%. But, Bank of Baroda fell 0.05%.

India’s second largest private sector bank by net profit HDFC Bank rose 2.45%, with the stock snapping last four days’ losses. HDFC Bank raised its key lending rate or the base rate by 25 basis points to 7.50% effective 5 October 2010. HDFC Bank had raised its rates on some deposits by up to 50 basis points effective 24 September 2010.

India’s largest private sector bank by net profit ICICI Bank rose 1.92%, with the stock gaining for the second straight day. ICICI Bank, recently, hiked base rate by 25 basis points to 7.75%. ICICI Bank has also increased interest rates on its special home loan scheme by 25 basis points. The scheme now offers loans at the rate of 8.5% for the first year and 9.5% for the second year. From the third year onwards, home loans will be priced at 175 basis over the base rate.

All banks had to review their base rate in the first week of October 2010 as RBI has mandated that the base rate has to be reviewed every quarter. The new benchmark rate came into effect from 1 July 2010, replacing the prime lending rate and banks have to price all new loans in reference with base rate.

Auto stocks rose on expectations of pick-up in sales in the upcoming festive season that begins with Dasara on 17 October 2010. Commercial vehicles maker Tata Motors rose 1.69%, with the stock gaining for the second straight day. The stock hit record high of Rs 1180.50 today. Tata Motors on Tuesday, 12 October 2010, announced successful completion of its issue of shares aggregating $750 million, comprising ‘A’ ordinary shares aggregating $550 million and ordinary shares aggregating $200 million. The company said it received strong response to the issue from investors across India and internationally with a book size aggregating $1.85 billion.

Tata Motors on Monday, 11 October 2010, launched the first Indian crossover four-wheeler called the Tata Aria. The crossover combines the features of a sports utility vehicle, a sedan and a multi utility vehicle in one package. Tata Aria is likely to compete with the Toyota Innova and Mahindra Xylo and is priced in the range of Rs 13-16 lakh. Analysts reckon that the Aria will help Tata Motors sustain its sales momentum going forward.

India’s largest tractor and utility vehicles maker Mahindra & Mahindra (M&M) rose 2.77%, with the stock gaining for the third straight day. The stock had hit all-time high of Rs 758.70 on Wednesday, 6 October 2010. The company said on Friday, 8 October 2010 that it has decided to issue a notice of early redemption on the outstanding foreign currency convertible bonds (FCCBs) aggregating $141.2 million. The bondholders will have the right to convert the FCCBs on or before 29 October 2010 and the balance outstanding FCCBs after the conversions, if any during this period, will be redeemed on 8 November 2010, M&M said in a statement.

The bondholders have in the last three months opted for conversion of FCCBs aggregating $48.30 million into equity shares/GDRs, M&M said. Each GDR represents one underlying equity share of the company.

M&M on Friday, 1 October 2010, said it sold 35,177 vehicles in September 2010, nearly 24% more from a year earlier.

India’s top car maker, Maruti Suzuki rose 2.28%. Total vehicle sales rose 29.6% to 1,08,006 units in September 2010 over September 2009. This is a record monthly sale from the car major.

Bajaj Auto rose 1.32%. The stock had hit all-time high of Rs 1,611.45 on Wednesday, 6 October 2010. The company’s total sales rose 26% to 3,52,769 units in September 2010 over September 2009.

India’s leading bike maker by sales Hero Honda Motors rose 0.22%. Sales rose 8.1% to 4.33 lakh units in September 2010 over September 2009.

Total car sales in India rose an annual 30.4% to 169,082 cars in September 2010, an industry body said on Friday, 8 October 2010. The Society of Indian Automobile Manufacturers (SIAM) said sales of trucks and buses, a barometer of economic activity, rose 29.6% to 59,455 units in September 2010.

Metal stocks rose as LMEX, a gauge of six metals traded on the London Metal Exchange rose 0.85% on Tuesday, 12 October 2010. Sterlite Industries, Hindustan Zinc, Tata Steel, Steel Authority of India, Sesa Goa and Hindalco Industries rose by between 0.23% to 2.68%.

Shares of VA Tech Wabag settled at Rs 1709.40 on BSE, a 30.49% premium over the initial public offering price of Rs 1310. The stock debuted at Rs 1655, a 26.34% premium over the initial public offering (IPO) price.

Karuturi Global clocked the highest volume of 5.39 crore shares on BSE. FCS Software (3.07 crore shares), Cals Refineries (1.97 crore shares), Arvind (1.37 crore shares) and Birla Power Solutions (1.28 crore shares) were the other volume toppers in that order.

Va Tech Wabag clocked highest turnover of Rs 892.20 crore on BSE. Strides Arcolab (Rs 443.26 crore), Karuturi Global (Rs 172.94 crore), State Bank of India (Rs 147.08 crore) and Uflex (Rs 116.86 crore) were the other turnover toppers in that order.

The market breadth was negative, in contrast with positive breadth earlier in the day. Capital goods, realty and metal stocks fell. But, IT stocks rose on expectations of strong Q2 September 2010 results. The BSE 30-share Sensex was down 136.55 points or 0.67%, up close to 100 points from the day’s low and off close to 165 points from the day’s high.

Intraday volatility was high. The market edged lower in early trade tracking weak Asian stocks and lower US index futures. Stocks extended losses in morning trade. The market slumped to a fresh intraday low in early afternoon trade after the latest data showed industrial output growth slowed in August 2010. The market trimmed losses in early afternoon trade.

Bargain hunting continued in afternoon trade. The market weakened once again in mid-afternoon trade as European stocks and US index futures fell. The market once again trimmed losses in late trade as European stocks and US index futures recovered from a steep intraday slide.

NSE’s volatility index, India VIX, a gauge of traders’ perception of near-term risks in the market based on options prices, lost 3.25% to 20.51. The index had lost 0.93% to 21.20 on Monday, 11 October 2010. The index had lost 4.68% at 21.40 on Friday, 8 October 2010, a day after rising 3.31% to 22.45 on Thursday, 7 October 2010. India VIX is calculated based on the S&P CNX Nifty options prices. India VIX is a measure of the market’s expectation of volatility over the next 30 calendar days.

Industrial production rose at a much slower-than-expected 5.6% in August 2010 from a year earlier, sharply lower than the previous month’s revised 15.2% growth, the latest government data showed. Manufacturing output rose an annual 5.9% in August 2010, lower than a 10.6% rise in August 2009. Industrial production growth for July 2010 was revised upwards to 15.2% from 13.8% earlier.

Output in the mining sector rose 7% verses 11% rise in August 2009 and electricity generation rose just 1% from a 10.6% growth in August 2009. Intermediate goods production rose 10% verses a 10.4% rise in August 2009 and basis goods production rose 3.7% verses a 7.7% rise in August 2009. Capital goods production contracted 2.6% in August 2010 verses a 9.2% growth in August 2009.

Production of consumer goods rose 6.9%, lower than a 10.9% growth in August 2009. Within the consumer goods segment, the consumer durables sector put up a strong showing. Production of consumer durables jumped 26.5% verses a 24.7% growth in August 2009. But, production of consumer non-durables contracted 1.2% verses a 6.1% growth in August 2009.

Finance Minister Pranab Mukherjee said slower growth in industrial output in August 2010 was disappointing. But, finance secretary Ashok Chawla said the government is not worried about the slowdown in August’s factory output growth. It is purely a cyclical movement, he said.

The yield on the most traded 8.13% 2,022 bond was hovering at 8.04%, lower than Monday’s (11 October 2010)’s close of 8.07%. The yield on the benchmark 10-year bond was hovering at 8.01%, slightly higher than Monday’s (11 October 2010)’s close of 8%.

The government will unveil data on wholesale price index for September 2010 on Friday, 15 October 2010. The wholesale price index, the most widely watched gauge of prices in India, rose 8.5% in August 2010.

European stocks fell on Tuesday, 12 October 2010, following overnight losses for Asian markets, with miners leading the decline as commodity prices weakened. The key benchmark indices in UK, France and Germany were down by 0.51% to 1.15%.

The latest data showed inflation in the UK remaining at a high level. Annual consumer-price inflation stood at 3.1% in September 2010, unchanged from a month earlier.

Asian stocks fell on Tuesday, 12 October 2010, with exporters weighing on Tokyo, and financials sending Hong Kong lower. The key benchmark indices in South Korea, Indonesia, Hong Kong, Singapore, Taiwan and Japan fell by between 0.04% to 2.09%.

Shares of exporters led the decline in Japanese stocks as the yen firms up against the dollar.

Chinese stocks defied the broad trend as rising commodity prices pulled metals shares higher, while power-sector shares extended gains on a proposed increase in tariffs. The Shanghai Composite rose 1.23%. Large Chinese banks dropped in Shanghai as well as Hong Kong, however, on reports China has temporarily raised reserve requirements on six banks to drain cash from the economy. Beijing hasn’t confirmed the report, but such a move would mark the first hike in banks’ deposit-reserve ratio since May 2010.

Trading in US index futures indicated that the Dow could fall 52 points at the opening bell on Tuesday, 12 October 2010. US index futures recovered from an earlier steep slide.

Earnings season in the US kicks off this week, with chip maker Intel Corp reporting later in the global day today, 12 October 2010. J.P. Morgan Chase & Co reports earnings on Wednesday, 13 October 2010, to be followed by Google Inc. on Thursday, 14 October 2010 and General Electric Co on Friday, 15 October 2010.

A slowdown in economic growth in the world’s developed countries looks increasingly likely, the Organisation for Economic Co-operation and Development (OECD) said on Monday, highlighting signs the recovery may now have peaked in the United States. The OECD said its August composite leading indicator (CLI) for the 32-nation OECD area fell for the fourth month in a row, shedding 0.1 point to 102.9. The outlook given by the CLIs for Canada, France, Italy, the United Kingdom, Brazil, China and India points strongly to a downturn, the Paris-based OECD said.

Back home, foreign funds continue to aggressively mop up Indian stocks. Net equity inflow in 2010 now stands at a record $21.85 billion, above last year’s $17.45 billion, as per data from the Securities & Exchange Board of India (Sebi). The Sebi data includes FII inflow through primary and secondary market route.

A sizable chuck of FII inflow this year is from India-focused exchange traded funds as well as long-only funds.

But, a section of the market is concerned that a strong equity issuance pipeline over the next six months will soak liquidity from the secondary equity markets. Indian companies are estimated to raise about Rs 36000 crore from share sales over the next three to six months. This includes a large initial public offer (IPO) from Coal India this month. The government plans to raise about Rs 15000 crore from divestment of 10% stake in Coal India. The Coal India IPO is billed as the country’s largest issue ever. The IPO of Coal India opens for bidding on 18 October 2010 and closes on 21 October 2010.

The government today, 12 October 2010, set Rs 225-245 per share price band for the Coal India IPO. Retail investors will get shares at 5% discount on the final issue price to be discovered through the book-building route. The IPO opens for bidding on 18 October 2010 and closes on 21 October 2010. The Indian government is selling roughly 63.16 crore Coal India shares, or 10% of the company.

The next major trigger for the stock market is Q2 September 2010 results. Brokerage earnings estimates will now roll over to FY 2012 (year ending March 2012).

Tier-I IT firms viz. Infosys, TCS, Wipro, and HCL Tech are seen reporting strong earnings growth in Q2 September 2010 as high volumes will boost operating margins. However, the IT sector faces headwind of a firm rupee in Q3 December 2010. The rupee hit a 2-year high against the dollar on Thursday, 7 October 2010. Higher volumes and price hike will aid earnings growth of most auto firms in Q2 September 2010 though analysts will closely eye operating profit margins and outlook on margins in the face of rising metal prices

Banks are seen reporting decent-to-strong earnings growth on the back of pick-up in credit offtake. Manufacturers of base metals are also seen reporting strong Q2 results on the back of higher metal prices. Increase in product prices will offset higher input costs for consumer staples firms in Q2 September 2010. But, cement firms will report dismal results due to a sharp fall in cement prices during the monsoon season.

The BSE 30-share Sensex fell 136.55 points or 0.67% to 20,203.34. The index rose 28.51 points at the day’s high of 20,368.40 in early trade. The Sensex fell 232.64 points at the day’s low of 20,107.25 in mid-morning trade soon after the industrial production data.

The S&P CNX Nifty was down 44.95 points or 0.73% to 6,090.90.

The BSE Mid-Cap index fell 0.51%. The BSE Small-Cap index was flat. Both these indices outperformed the Sensex.

Most sectoral indices on BSE declined. The BSE Realty index (down 1.8%), Capital Goods index (down 1.58%), Metal index (down 1.43%), Consumer Durables index (down 1.42%), FMCG index (down 1.01%), Power index (down 0.98%), Oil & Gas index (down 0.9%), and PSU index (down 0.81%), underperformed the Sensex. The BSE IT index (up 0.22%), Healthcare index (up 0.18%), Auto index (down 0.1%), and banking sector index Bankex (down 0.38%), outperformed the Sensex.

The market breadth was negative, in contrast to a positive breadth earlier in the day. On BSE, 1820 shares declined while 1171 shares advanced. A total of 105 shares remained unchanged.

From 30 share Sensex pack, 22 fell and rest rose.

BSE clocked turnover of Rs 4400 crore, lower than Rs 4786.08 crore on Monday, 11 October 2010.

Index heavyweight Reliance Industries (RIL) fell 1.41% to Rs 1053.90. The stock came off the day’s low of Rs 1046.05. RIL may reportedly be sitting on yet another gold mine — its D4 block. RIL is the operator of the block with 85% stake. RIL’s partner Niko Resources, which owns 15% in the block located on the east coast of India, has raised initial estimates of gas reserves in the D4 block.

Edward S Sampson, chairman and chief executive officer of Canada-based Niko Resources, told investors in a conference recently that he feels that reserves at the D4 block are twice the size of the D6 block and have prospectivity of up to an exceeding potential for 100TCF gas. RIL said that the appraisal process is presently being undertaken and, therefore, will not comment at this juncture.

IT stocks rose ahead of Q2 results of IT bellwether Infosys later this week. India’s largest IT exporter by sales TCS rose 0.89%. India’s second largest IT exporter by sales Infosys rose 0.12%. Infosys announces its Q2 result on Friday, 15 October 2010. India’s third largest IT exporter by sales Wipro fell 0.18% reversing initial gains.

FMCG stocks fell on profit taking. ITC, Dabur India, Hindustan Unilever and United Spirits fell by between 0.87% to 3.11%.

Consumer durables stocks also fell on profit taking. Blue Star, Lloyd Electric, Videocon Industries and Titan Industries fell by between 1.46% to 2.24%.

High beta realty stocks, too, fell on profit taking. Omaxe, Unitech, Ackruti City, DLF, Indiabulls Real Estate, Phoenix Mills and Lok Housing fell by between 0.75% to 2.95%.

Metal stocks fell as commodity prices weakened. Sterlite Industries, Sesa Goa, Hindalco Industries and National Aluminum Company fell by between 0.25% to 2.59%.

Steel stocks fell after POSCO the world’s No.3 steelmaker cut 2010 profit forecast by 7% after reporting the first decline in earnings in four quarters. Jindal Steel & Power, Steel Authority of India, Bhushan Steel and JSW Steel fell by between 1.71% to 2.59%.

Tata Steel, the world’s seventh-largest steelmaker, fell 1.08%. The company, last week, said sales from its Indian operations rose 14% to 1.66 million tonnes in Q2 September 2010 over Q2 September 2009. The growth was driven by the highest-ever quarterly sales of long products, primarily used in construction, the company said in a statement.

The Indian operations account for about a quarter of the group’s total annual global capacity of about 30 million tonnes, which includes unit Corus, Europe’s second-largest steelmaker. Tata Steel’s crude steel production in India rose 5% to 1.73 million in Q2 September 2010 over Q2 September 2009.

India’s largest engineering and construction firm by sale Larsen & Toubro (L&T) fell 1.94%, with the stock falling for the second straight day. The company said during market on Friday, 8 October 2010, it has bagged new orders worth Rs 1585 crore in buildings & factories segments.

Among other capital goods stocks, Siemens, SKF India, ABB, BEML, BHEL and Praj Industries fell by between 0.63% to 3.5%.

Banking stocks fell on profit taking. India’s largest commercial bank by net profit and branch network State Bank of India (SBI) fell 0.84%, with the stock snapping two-day gains. The stock hit a record high of Rs 3299 on Monday, 4 October 2010.

Bank of India and Punjab National Bank fell by between 0.86% to 2.04%. But, Bank of Baroda rose 0.44%.

India’s second largest private sector bank by net profit HDFC Bank fell 0.12%, with the stock falling for the fourth straight day. HDFC Bank raised its key lending rate or the base rate by 25 basis points to 7.50% effective Tuesday, 5 October 2010. HDFC Bank had raised its rates on some deposits by up to 50 basis points effective 24 September 2010.

But, India’s largest private sector bank by net profit ICICI Bank rose 0.65%. ICICI Bank, recently, hiked base rate by 25 basis points to 7.75%. ICICI Bank has also increased interest rates on its special home loan scheme by 25 basis points. The scheme now offers loans at the rate of 8.5% for the first year and 9.5% for the second year. From the third year onwards, home loans will be priced at 175 basis over the base rate.

All banks had to review their base rate in the first week of October 2010 as RBI has mandated that the base rate has to be reviewed every quarter. The new benchmark rate came into effect from 1 July 2010, replacing the prime lending rate and banks have to price all new loans in reference with base rate.

Cement stocks fell on profit taking. ACC, UltraTech Cements, Ambuja Cements and India Cements fell by between 0.94% to 1.68%.

Most auto stocks rose on expectations of pick-up in sales in the upcoming festive season that begins with Dasara on 17 October 2010. Commercial vehicles maker Tata Motors rose 0.61% after company before market hours today announced successful completion of its issue of shares aggregating $750 million, comprising ‘A’ ordinary shares aggregating $550 million and ordinary shares aggregating $200 million. The stock hit record high of Rs 1165 today.

The company said it received strong response to the issue from investors across India and internationally with a book size aggregating $1.85 billion.

Tata Motors on Monday, 11 October 2010, launched the first Indian crossover four-wheeler called the Tata Aria. The crossover combines the features of a sports utility vehicle, a sedan and a multi utility vehicle in one package. Tata Aria is likely to compete with the Toyota Innova and Mahindra Xylo and is priced in the range of Rs 13-16 lakh. Analysts reckon that the Aria will help Tata Motors sustain its sales momentum going forward.

Meanwhile, Tata Motors is reportedly planning to launch a new car that would be positioned between the Nano and Indica. The move is aimed at taking on India’s largest selling car Alto, manufactured by Maruti Suzuki India.

India’s largest tractor and utility vehicles maker Mahindra & Mahindra (M&M) rose 1.31%, with the stock gaining for the second straight day. The stock had hit all-time high of Rs 758.70 on Wednesday, 6 October 2010. The company said on Friday, 8 October 2010 that it has decided to issue a notice of early redemption on the outstanding foreign currency convertible bonds (FCCBs) aggregating $141.2 million. The bondholders will have the right to convert the FCCBs on or before 29 October 2010 and the balance outstanding FCCBs after the conversions, if any during this period, will be redeemed on 8 November 2010, M&M said in a statement.

The bondholders have in the last three months opted for conversion of FCCBs aggregating $48.30 million into equity shares/GDRs, M&M said. Each GDR represents one underlying equity share of the company.

M&M on Friday, 1 October 2010, said it sold 35,177 vehicles in September 2010, nearly 24% more from a year earlier.

India’s leading bike maker by sales Hero Honda Motors rose 0.17%, with the stock gaining for the second straight day. Sales rose 8.1% to 4.33 lakh units in September 2010 over September 2009.

India’s top car maker, Maruti Suzuki fell 0.12%, with the stock snapping last two days’ gains. Total vehicle sales rose 29.6% to 1,08,006 units in September 2010 over September 2009. This is a record monthly sale from the car major.

Bajaj Auto fell 1.87%. The stock had hit all-time high of Rs 1,611.45 on Wednesday, 6 October 2010. The company’s total sales rose 26% to 3,52,769 units in September 2010 over September 2009.

Car sales rose an annual 30.4% to 169,082 cars in September 2010, an industry body said on Friday, 8 October 2010. The Society of Indian Automobile Manufacturers (SIAM) said sales of trucks and buses, a barometer of economic activity, rose 29.6% to 59,455 units in September 2010.

Some tyre stocks rose on expectations of higher demand from the replacement market as well as from auto original equipment manufacturers. MRF, CEAT and Apollo Tyres rose by between 2.27% to 6.57%.

Tecpro Systems clocked highest volume of 1.68 crore shares on BSE. Cantabil Retail (1.46 crore shares), Cals Refineries (1.44 crore shares), REI Agro (1.32 crore shares) and IFCI (1.2 crore shares) were the other volume toppers in that order.

Tecpro Systems clocked highest turnover of Rs 686.87 crore on BSE. Jindal Poly Films (Rs 158.97 crore), Cantabil Retail (Rs 153.03 crore), IFCI (Rs 91.26 crore) and SKS Microfinance (Rs 82.89 crore) were the other turnover toppers in that order.

Apparel maker Cantabil Retail India settled at Rs 104.75 on BSE, a 22.41% discount to the initial public offering price of Rs 135. The he stock debuted at Rs 133.80, a 0.89% discount to the initial public offering (IPO) price.

Tecpro Systems settled at Rs 407.85 on BSE, a 14.89% premium over the initial public offering price of Rs 355. The stock debuted at Rs 399.40, a 12.51% premium over the initial public offering (IPO) price.