Higher advance tax payment, good monsoon lift spirits

Bulls had an upper hand over bears for a second day in a row todaywith market sentiment boosted by reports of higher advance taxpayment by top Indian firms in the first installment of 15 June2008, reports of good monsoon in the initial phase and easing ofoil prices from record high. Banking and realty shares led therally. The rally gathered strength in the second half of the tradingsession tracking firm European markets which opened after Indianmarket. All the sectoral indices on BSE were in green indicatingthat the rally was broad-based. Maruti Suzuki India, India'sbiggest car maker in terms of market share, spurted in the latetrade. As per provisional data, foreign funds bought shares worth a net Rs142.36 crore today, 17 June 2008. Domestic funds bought sharesworth a net Rs 420.08 crore. European markets edged higher as reports suggested that theexpectations of a US rate hike have been overplayed. Key indices inUK, France and Germany were up by 0.87% to 1.57%. Asian markets were trading on a mixed note. Key indices in China,Japan, South Korea, and Singapore were down by 0.04% to 2.76%.However, Taiwan's Taiwan Weighted index was up 0.39% and HongKong's Hang Seng was up 0.12%. The 30-share BSE Sensex gained 301.08 points or 1.96% at 15,696.90.At the day's high of 15,732.75 Sensex gained 336.93 points at thefag end of the trading session. The index shed 37.84 points at theday's low of 15,357.98, hit in early trade. The broader based S&P CNX Nifty rose 80.5 points or 1.76% at 4653.Nifty June 2008 futures were at 4639.35, a discount of 13.65 pointscompared with the spot closing. The BSE Mid-Cap index rose 1.59% to 6,400.18. The BSE Small-Capindex was up 1.46% to 7,781.30. Both these indices underperformedthe Sensex. The market breadth was strong on BSE with 1802 shares advancing ascompared to 882 that declined. 80 remained unchanged. BSE clocked a turnover of Rs 5312 crore as against Rs 4,537.92 onMonday, 16 June 2008. NSE's futures & options (F&O) segmentturnover was Rs 42624.38 crore, which was higher than Rs 40166.83crore on Monday, 16 June 2008. As per reports, India's monsoon rains in the first half of June2008 were more than 40% above the long-term average, raising hopesof strong crop output at a time when rising food prices have helpedpush inflation to 7-year highs. Many companies have recorded a higher advance tax outgo in thefirst installment of 15 June 2008 compared to the correspondingperiod last year, raising expectations of good June 2008 results.The finance minister expects direct tax collection for the currentyear to cross Rs 4 lakh crore. Advance taxes are paid in fourinstalments, in June, September, December and March. Usually, thefirst instalment is 15% of the total tax estimated to be paid forthe whole fiscal. Oil steadied today, 17 June 2008, after touching a record near $140the previous day, with traders caught between a weaker dollar andexpectations that top exporter Saudi Arabia will ramp up output toits highest rate in decades. US crude slipped 15 cents to $134.46 abarrel after ending 25 cents lower on Monday, 16 June 2008, astraders quickly took profit from a rally to a record $139.89triggered by a falling dollar and the closure of a North Sea oilplatform. India's largest dedicated housing finance firm by operating incomeHousing Development Finance Corporation (HDFC) jumped 5.99% at Rs2298.05. HDFC paid advance tax of Rs 140 crore in the firstinstallment of 15 June 2008, marking an over 40% increase over thecorresponding figure in the previous year. India's largest passenger car maker in terms of market share MarutiSuzuki soared 5.22% at Rs 755.60 on reports the company plans tocounter Ratan Tata's Nano with a stripped-down version of itsflagship model Maruti 800. Battered bank stocks rose on reports of higher advance tax paid byprominent banking/finance firms. The BSE Bankex outperformed theSensex, rising 4.29% to 7,567.17. Indian Overseas Bank (up 8.49% atRs 114.35), Axis Bank (up 7.89% at Rs 794.20), Kotak Mahindra Bank(up 7.45% at Rs 679), and HDFC Bank (up 4.87% at Rs 1207.55),spurted. India's largest commercial bank State Bank of India rose 4.57% atRs 1387.05. The bank recorded a 32% increase in advance tax paymentto Rs 663 crore Q1 June 2008 over Q1 June 2007. India's largest private sector bank by assets ICICI Bank rose 2.70%at Rs 820.25. The stock had hit a low of Rs 785.55 earlier in theday. ICICI Bank's tax outgo jumped 38% to Rs 340 crore in Q1 June2008 over Q1 June 2007. ICICI Bank paid advance tax of Rs 1,108.6crore in the whole of last fiscal. ICICI Bank has a third highestweightage of 8.18% in BSE Sensex. The BSE Realty index outperformed the Sensex, rising 3.89% to6,099.19. Indiabulls Real Estate (up 6.34% at Rs 423.60), Unitech(up 4.70% at Rs 207.10), and DLF (up 2.99% at Rs 505.90), soared. India's second largest software exporter by sales InfosysTechnologies rose 0.32% at Rs 1913.30. Infosys has a second highestweightage of 8.80% in BSE Sensex. India's second largest listed cellular service provider by salesReliance Communication (RCOM) declined 0.92% to Rs 530.20. Thestock is southward bound since Monday, 16 June 2008, after RelianceIndustries, India's largest private sector firm by marketcapitalisation and oil refiner, claimed first right of refusal tobuy a controlling stake in it. Reliance Communications, controlledby Anil Ambani, is in exclusive talks with South Africa's MTN abouta tie-up that could create a top-10 global telecoms firm. As partof a tie-up, Anil Ambani would likely swap his controlling stake inReliance Communications to become the largest shareholder in MTN.On Monday, the RCOM stock had ended 1.52% lower at Rs 535.10. Reliance Industries (RIL) rose 1.94% at Rs 2329.20. RIL has ahighest weightage of 15.76% in BSE Sensex. Anil Dhirubhai Ambani group Reliance Power rose 3.41% at Rs 191 onreports the firm will get a $500 million loan from the AsianDevelopment Bank for its 4,000 megawatt ultra mega power projectcoming up in Andhra Pradesh. Chemicals maker GHCL spurted 6.82% at Rs 77.55 on reports the AlRostmani Group of the United Arab Emirates is planning to pick up amajority stake in the firm for an estimated Rs 700 crore. Real estate developer Housing Development and Infrastructure (HDIL)rose 2.75% at Rs 606.15 on reports the firm is eyeing the powersector as part of its diversification strategy. South Indian Bank surged 3.12% to Rs 127.15 after the privatesector bank said its board will meet on 28 June 2008 to considerissue of bonus shares. Commercial vehicles maker Ashok Leyland gained 0.92% to Rs 33.05after the company said it has made a strategic investment inAlbonair GmbH, Germany for development of vehicle emissiontreatment products. Among side counters, Ravalgaon Sugar Farm (up 20% at Rs 5729.10),Torrent Pharmaceuticals (up 20% at Rs 185), Vaibhav Gems (up 20% atRs 73.95), Essar Shipping (up 9.48% at Rs 129.90), UCO Bank (9.47%at Rs 42.20), Indiabulls Financial Services (up 9.01% at Rs368.50), spurted. Anu's Laboratories clocked a highest turnover of Rs 449.52 crore onBSE. Reliance Capital (Rs 194.12 crore), Reliance Industries (Rs180.93 crore), Reliance Petroleum (Rs 162.72 crore) and Larsen &Toubro (Rs 127.31 crore), were the other turnover toppers on BSE inthat order. Chambal Fertilizers & Chemicals reported a highest volume of 1.22crore shares on BSE. Anu's Laboratories (1.10 crore shares),Reliance Natural Resources (98.96 lakh shares), NagarjunaFertilizers & Chemicals (95.46 crore shares) and Reliance Petroleum(88.52 lakh shares), were the other volume toppers on BSE in thatorder. US markets ended mixed in see-saw trade yesterday, 16 June 2008. Arally was sparked in banking stocks with Lehman Brothers declaringresults in line with market expectations. The Dow Jones industrialaverage lost 38.27 points, or 0.31%, to 12,269.08. The S&P 500index gained 0.11 points, or 0.01%, to 1,360.14. The NasdaqComposite index added 20.28 points, or 0.83%, to 2,474.78. Foreign institutional investors (FIIs) stepped up selling of Indianequities on Monday, 16 June 2008. As per data released by theSecurities & Exchange Board of India (Sebi) today, 17 June 2008,foreign funds sold shares worth a net Rs 532.80 crore on 16 June2008, much higher than their outflow of Rs 51.80 crore on theprevious trading session on Friday, 13 June 2008. FIIs had pressedheavy sales worth Rs 1141.70 crore on Thursday, 12 June 2008. The BSE Sensex had risen 206.20 points or 1.36% at 15,395.82 onMonday, 16 June 2008, on the back of firm global markets.