Market Analysis - 29th March 2011

SENSEX  -  19,120.80        +177.66 (0.94%)

NIFTY -      5,736.35           +49.10 (0.86%)

The Indian markets witnessed a straight sixth day of gains as bullish trends continue to rule the market. The positive sentiment in the market stems from declining crude prices, easing inflation worries and most importantly the return of foreign investors on the street. FII's, who had been taking a lot of money out of the Indian markets since the start of the year, have started to invest again, as exchange data indicated.

Bombay Stock Exchange's Sensex ended at 19121.01, up 177.87 points or 0.94 per cent. The 30-share index touched a high of 19226.21 and low of 18944.82 in today's trade.

National Stock Exchange's Nifty closed at 5736.40, up 49.15 points or 0.86 per cent. The broader index touched a high of 5770.35 and low of 5680.70 intraday. 

The markets touched fresh 2 months high but then volatility returned in late afternoon session and the markets pared the gains. The profit booking could be attributed to the weak cues from European markets as they reversed initial gains.

Market breadth was negative on the BSE with 1110 advances against 1843 declines.

As per provisional figures, foreign institutional investors (FIIs) bought shares worth Rs 890.02 crore on Monday, 28 March 2011. FII inflow totaled Rs 3192.41 crore in five trading sessions from 22 March 2011 to 28 March 2011 as per data from the stock exchanges.

Crude continued its slide as the rebel forces continued to make advances against the Libyan forces of Gaddafi. Crude prices are easing as there is a belief that the Libyan conflict will be resolved soon and supplies restored. US crude futures were down 60 cents a barrel or 0.58% to $103.38 a barrel. Rising crude prices had created tension in Indian markets as India imports almost 70% of its crude requirement. With crude prices going down the inflation worries have also calmed a bit.

On the BSE all 13 sectoral indices were in the green. Auto (+1.52%), Teck (+1.35%) and Metal (+1.08%) led the gains on BSE.

IT pivotals rose on upbeat economic data in the US, the key market for Indian software exporters. India's largest software services exporter Tata Consultancy Services gained 2.17% after the company signed a contract with Credit Union Australia to implement core banking solution

Banking stocks extended recent gains after the government last week tabled banking sector amendment bill in parliament. India's largest bank by net profit and branch network State Bank of India rose 1.35%. Reportedly, the bank will launch its Rs 20000 crore rights issue after the first quarter of the fiscal year beginning in April 2011. The issue will raise half the amount needed to sustain the bank's growth over the next five years.

Oil & gas stocks rose after the ninth round of oil and gas block auctions closed on Monday. India's largest oil exploration firm ONGC advanced 1.90% on reports a consortia led by ONGC won 10 blocks in the latest round of bidding for oil & gas blocks in India. 

Telecom stocks were in demand on reports Communications and IT Minister Kapil Sibal on Monday met Prime Minister Manmohan Singh and Finance Minister Pranab Mukherjee to seek their intervention for the loans to telecom companies as the controversial 2G spectrum allocation virtually blocked flow of funds to the telecom companies. India's second largest listed cellular services provider by sales Reliance Communications jumped 4.18% to Rs 109.60 and was the top gainer from the Sensex pack.  

Shares of aviation firms rose after crude oil futures fell on hopes that Libyan oil may be back to the pipelines sooner than anticipated. Falling crude oil prices have eased worries about higher operational cost for airlines as jet fuel constitutes more than 50% of operating cost for airliners. The prices of jet fuel are linked to the crude oil prices. Jet Airways India (up 3.50%), SpiceJet (up 1.60%) and Kingfisher Airlines (up 1.45%), edged higher. 

European shares reversed initial small gains. The key benchmark indices in Germany, France and UK were down by between 0.20% to 0.53%. 

Asian stocks pared declines as better-than-estimated earnings in China and Hong Kong offset concerns economic growth in Japan will falter as the nation struggled to contain a partial meltdown at a nuclear plant. The key benchmark indices in China, Hong Kong, Singapore, Japan and Indonesia were down by between 0.03% to 0.86%. The key benchmark indices in Taiwan and South Korea rose 0.51% and 0.77%, respectively.

US stocks edged lower on Monday, 28 March 2011, after a late tumble undercut advances from earlier in the day, and as investors cautiously retreated ahead of key data reports later this week. The Dow Jones Industrial Average closed down 22.71 points, or 0.2%, at 12197.88. The Nasdaq Composite fell 12.38, or 0.5%, to 2730.68 and the Standard & Poor's 500-stock index shed 3.61, or 0.3%, to 1310.19.

Market Analysis - 28th March 2011

SENSEX  - 18,943.14       +127.50 (0.68%)

NIFTY     -  5,687.25        +33.00 (0.58%)

 

Indian stock markets rallied to touch 2 month highs in intraday. The Sensex crossed the psychologically important mark of 19,000. At the closing bell the Sensex was at 18,943.14 up 127.50 points while the broader index, the Nifty, closed at 5687.35 up by 33 points.

The positive index seen in the market was due to the fall in the crude oil prices. US crude futures were down 72 cents a barrel or 0.68% to $104.68. This helped ease the worries of rising inflation because of rise in crude. The significant advance made by the Libyan rebels came as good news as it seems that the Libyan crises might end soon and oil supplies will resume. Libya produces 1.7 million barrels of oil  daily and thus holds a significant place in world oil suppy.

Another news which boosted investor sentiment was that foreign institutional investors bought more of Indian equity than they sold, late last week. As per provisional figures, foreign institutional investors (FIIs) bought shares worth Rs 1446.18 crore on Friday, 25 March 2011. FII inflow totaled Rs 2302.39 crore in four trading sessions from 22 March 2011 to 25 March 2011 as per data from the stock exchanges.

The fresh FII interest in Indian equities can be attributed to the fact that the government has put forward some key reform bills in the parliament.The government had placed the Banking sector reform bill in the parliament on 22nd March.

Sensex

The market breadth, indicating the health of the market, was negative. On BSE, 1603 shares declined while 1306 shares advanced. A total of 101 shares remained unchanged. The breadth was strong earlier in the day.

 

On the BSE the sectors that advanced were, Auto (+1.52 %), Capital Goods (+1.27 %) and Bankex (+1.21 %). The sectors that led the fall were Health Care (-1.17 %), Realty (-0.56 %) and Metals (-0.29 %).

In the Sensex pack the top gainers were LIC Housing Finance (+7.93 %), M&M Financial services (+5.52 %), Tata communication (+4.69 %). LIC Housing Finance surged 5.37% following reports that LIC Housing Finance Asset Management Company, a unit of the company, is planning to start a Rs 500-750 crore real estate fund.

NIFTY

Billionaire investor and international investment icon Warren Buffett who was in his maiden visit to India last week said that he hopes to spend some money in India. His firm Berkshire Hathaway is looking to park funds in large investment destinations and India fits the bill perfectly, he said. India, according to him, is not an emerging market but a very big country with a large number of significant businesses. He said that Berkshire Hathaway would look at possible acquisitions in India as and when there were opportunities. 

The near term major trigger for the market is Q4 March 2011 results. The Q4 results will start trickling in from about mid-April 2011. 

European market edged higher on Monday, 28 March 2011, even as the gains were small. The key benchmark indices in UK, France and Germany were up by between 0.29% to 0.35%. 

Asian stocks dropped on Monday, 28 March 2011, as radiation hampered efforts to cool crippled nuclear reactors in Japan, and as company earnings missed analyst estimates. The key benchmark indices in Singapore, Japan, Indonesia, Taiwan and Hong Kong fell by between 0.27% to 0.67%. The key benchmark indices in South Korea and China were up 0.11% and 0.21%, respectively. 

US stocks rose on Friday, 25 March 2011, after upbeat results from technology giant Oracle Corp. and on data showing the economy grew more than previously estimated at the end of 2010. The Dow Jones Industrial Average finished up 50.03 points, or 0.41%, at 12220.59. The Standard & Poor's 500-stock index closed 4.14 points higher, or 0.32%, at 1313.80, and the Nasdaq Composite added 6.64 points, or 0.24%, to 2743.06. 

US real gross domestic product grew at a 3.1% annualized rate in the fourth quarter, revised up from the 2.8% pace reported one month ago, according to the Commerce Department.