Money on the markets

BSE Sensex surges past 17,000

The Sensex rose 1.5 percent on Wednesday to close above the 17,000 mark for the first time since May 2008.

The rise in the benchmark was led by SBI, Maruti Suzuki, BHEL and ICICI Bank.

On the sectoral front, the banking sector led the indices gaining 3.6 percent followed by the Auto index, which rose 2.1 percent. The Capital Goods ended 1.7 percent higher.

India’s benchmark index hit a 16-month high last week. It has gained over 70 percent in the current year and almost 18 percent in September quarter.

Among sectors, the banking index rose over 70 percent in 2009 while the auto index surged over 170 percent.

Do you think the start of earning season in the second week of October will lead the Sensex ato new highs?

TCS gains 3.9 percent

Shares in India’s top IT services firm by sales gained nearly 4 percent in a broader market that ended 0.96 percent up at 16,853.

The stock which carries over 2 percent weightage in the main index, closed at 610 rupees with volumes of 0.58 million.

The BSE IT Index ended 2.2 percent higher, led by gains in TCS, Infosys and Oracle Finance.

TCS chief executive S. Ramadorai said in an interview on Tuesday the company was seeing signs of recovery in demand for outsourcing, especially from the banking, financial services and insurance sectors, which together account for 43 percent of its business.

TCS has gained over 150 percent in the current year.

The company is also looking at hiring 18,000 workers in the financial year ending March 2010.

According to NASSCOM, signs of recovery in the U.S. are yet to translate into real business for India’s outsourcing firms, but business is likely to pickup from the second half of the year.

Healthcare stocks surprise in a weak mkt

The BSE Healthcare index bucked the trend on Friday and rose over 5 percent in a weak market that saw the main index closing 0.5 percent lower.

Dr. Reddy’s shares jumped over 10 percent, Orchid Chemicals gained over 9 percent, and Aurobindo Pharma rose over 8 percent.

On a long-term perspective, stocks like Orchid Chemical have risen by over 80 percent since July.

Of the 24 scrips in the healthcare index, only two ended in the red, while 11 stocks rose 5 percent or more.

Though the healthcare index has gained 21 percent since July, it has performed better than the Sensex’s rise of 15 percent in the same period.

Would you invest in this sector at current market levels?

Infosys drops in flat mkt

Shares of Infosys Technologies fell over 3 percent to 2,285 rupees on Thursday in a market that saw volatile trade with the expiry of monthly derivatives.

Infosys, which has an over 8 percent weightage in the main index, dropped as much as 80 rupees with a volume of 0.3 million, making it the top loser in the index which ended flat.

A news report today said the second-largest software exporter was considering pay hikes and promotions next month.

The report, however, failed to cheer investors.

The BSE IT index ended nearly 1.6 pct down with Infosys, Financial Technologies, Oracle and Patni leading the decline.

The global economy has started showing signs of recovery and it is the IT sector which is likely to benefit the most from the strengthening.

The counter has already gained over 100 percent so far this year. Do you see a correction setting in and the stock falling further in the near term?

Mixed day for banking stocks

The BSE banking index ended marginally lower on Wednesday as the Sensex slipped over 150 points, but some banking stocks still managed to post decent gains.

Leading the pack was Indian Overseas Bank which jumped over 7 percent, and Federal Bank which gained 3.1 percent. Bigger peers like SBI and ICICI ended the day in the red.

Nine of the 18 components in the banking index managed to close positive.

The banking index has gained over 100 percent since April, with stocks such as ICICI surging over 150 percent and SBI rising 100 percent in the period.

Banking stocks have risen recently on higher advance tax payments by banks and a correction in valuation of small banks.

Which banking stock would you invest in right now?

P&G shares on a roll

Shares in Procter & Gamble Hygiene & Health Care, the Indian unit of Procter & Gamble Co., are on a rise ever since the company declared its quarterly numbers in August-end.

On Tuesday, its shares jumped by over 12 percent to 1,577 rupees and closed at their lifetime high.

The company, on August 27, announced that its net profit more than doubled to 477.7 million rupees for the April-June quarter. Its shares have jumped 47 percent since that day.

The shares of the consumer products company have also rewarded investors well over a long-term perspective. They have gained over 100 percent in 2009.

Would you buy P&G shares seeing the recent rally or do you think there are better options?

Dr Reddy’s surges on Glaxo report

Dr Reddy’s shares hit an intra-day high of 900 rupees on Friday before closing 3.6 pct up at 865.45 rupees.

Shares in the drugmaker jumped to a 3-1/2-year high on a report that GlaxoSmithline is in talks to buy a 5 percent stake in the company for $150 million.

At a time when firms are competing to increase their share in the global healthcare industry, the proposed move will bring a lot of mileage for both firms.

Drug sales in emerging markets are expected to grow at a mid-teens percentage rate through 2013, according to IMS Health.

The stock ended with volumes of 0.12 million.

Do you think the Glaxo move will bring synergy between the companies and help the counter consolidate its position in the market?

Reliance drops on share sale

Shares in Reliance Industries ended over 4 percent down at 2,086 rupees on Thursday while the BSE Sensex ended flat.

Reliance, which has over 13 percent weightage in the main index, dropped as much as 97 rupees making it the top loser in the index.

The company raised nearly $660 million by selling 15 million of treasury stock at an average price of 2125 rupees, a discount of 2.7 percent pulling the stocks down more than 5 percent and BSE Oil & Gas Index by 2.8 percent.

The stock ended with volumes of 12.94 million, its highest since April 2006. Reliance Industries has a market value of about $71 billion or 3436.54 billion rupees according to Thomson Reuters data.

Some analysts believe the share sale was aimed at increasing the cash position of the firm while others see it as a move to improve the company’s balance sheet for acquisitions overseas.

“In our opinion, overseas exploration and production assets could be likely targets,” said Harshad Katkar, an analyst at brokerage UBS.

Would you cash in on this opportunity and buy the stock?

Tata Steel leads metals

Tata Steel shares jumped 8.2 percent on Wednesday, registering their biggest one-day rise in more than three months and their best close in a year. The surge helped the BSE Metal Index gain 4.2 percent.

The counter led the gainers on the BSE after Federal Reserve Chairman Ben Bernanke said the U.S. recession was probably over, boosting metals stocks across regions. Shanghai copper futures also rose but lagged the international market.

According to Thomson Reuters data, Tata Steel shares have gained 25 percent this month and over 140 percent since January.

Data shows the company, with a relatively high Beta of 1.76, balances it with good operating margin of 37.6 percent and has a price-to-book value ratio of 1.45.

Do you think the counter can reach new highs as the global economy shapes up again?

Reliance Ind leads Sensex rise

Shares in Reliance Industries ended 1.5 percent higher at 2180 rupees, pushing the broader market up 1.4 percent to 16,454.

Reliance Industries, which has the maximum weightage on the Sensex, ended as the top gainer in terms of net gain on the BSE Oil & Gas Index and also among the 30 Sensex components.

The Oil & Gas Index rose over 1 pct helped by gains in RIL, IOC and GAIL.

According to Thomson Reuters data, RIL shares have gained nearly 9 percent this month and over 70 percent since January.

The volume of Relaince shares traded stood at over 0.5 million on Tuesday.

Reliance Industries yesterday informed the BSE that the high court in Bombay has sanctioned the scheme of Amalgamation of Reliance Petroleum with Reliance Industries.

Shares in Reliance Petroleum ended 1.7 percent higher at 134 rupees.